NYC may require co-op boards to disclose reasons for rejecting a buyer

The New York City housing market is unique in many ways. One of its most notable differences is the large share of co-op apartments. Although co-ops make up the majority of NYC's housing stock, the process of purchasing a share in a co-op building could be very tricky. 

One of the most challenging parts of buying a share in a co-op is board approval. Co-op boards in New York City could reject a potential buyer for any reason not protected by the Fair Housing Act. Currently, NYC’s co-op boards are not required to disclose reasons for denying an applicant. However, the new bill, introduced by Public Advocate Jumaane D. Williams and Council Member Pierina Sanchez, seeks to make this process more transparent. 

If passed, the new legislation, Int. 915, would require co-op boards to provide rejected homebuyers with a written statement within five days after making a decision. This statement will need to include reasons why the application was denied. In addition, Public Advocate Williams and Council Member Sanchez also put forward two other bills that would regulate the application process and require co-op boards to disclose their finances to potential buyers. 

“For too long, a complicated, nebulous, and opaque co-op process has left open the possibility for discrimination and denial of housing to qualified applicants,” said Public Advocate Jumaane D. Williams. “These bills will go a long way toward reining in that process and providing transparency, and I’m proud to partner with Chair Sanchez to get them passed.”

The discussions surrounding the co-op application process are not new. In 2021, New York State Senator Brian Kavanagh sponsored a bill that required co-op boards to provide a written explanation to rejected homebuyers. According to Brick Underground, similar bills have been put forward in every legislative session since 2009. 

The suggested changes received negative feedback from co-op boards. Under the new proposals, co-op boards will face fines from $1,000 to $25,000 for not complying with the requirements. As of now, homebuyers looking to purchase a share in a co-op building are protected by anti-discrimination laws. Those who believe they were a victim of housing discrimination could file a complaint with the New York City Commission on Human Rights. 

Resources:

“WILLIAMS, SANCHEZ TO INTRODUCE CO-OP TRANSPARENCY AND REFORM LEGISLATIVE PACKAGE,” (New York City Public Advocate Jumaane D. Williams, 2023)

“New bill would require NYC co-op boards to give reasons for rejecting a buyer,” by Emily Myers (Brick Underground, 2023)

“Co-ops will have to tell applicants why they were rejected under new bill,” by Olivia Bensimon (Crain’s New York, 2023)

“Co-op boards may have to explain why they rejected a buyer,” by Emily Myers (Brick Underground, 2021)