Westchester County Moves to Speed Co-op Sales

Westchester County has become the latest jurisdiction to put time limits on co-op boards’ deliberations over application packages from potential apartment buyers. The county’s Board of Legislators has overwhelmingly approved a compromise transparency bill that gives co-op boards 15 days to notify buyers if their applications are complete. Once an application is deemed complete, a board has 60 days to accept or reject it. The original proposal would also have required boards to give a reason for rejecting any application. That controversial provision is not part of the new law. 

“The bottom line is, the legislation is not perfect, but all sides agreed it was an acceptable compromise,” says Barry Kramer, an advocate of the bill who wears several hats. He’s president of the Hudson Gateway Association of Realtors, president of his co-op board in Scarsdale, and chair of the powerful New York State Association of Realtors’ (NYSAR) co-op working group committee. “Requiring a time frame is good,” Kramer says, “because it will add accountability in the buying and selling process.” 

For 20 years, NYSAR has been pushing co-op transparency legislation on a statewide level, without success. Those legislative proposals have generated perennial pushback from co-op advocates, including the Council of New York Cooperatives and Condominiums. One advocate has described these legislative incursions on co-op boards’ powers as a “slippery slope.” 

Kramer explains his reason for hoping the Westchester bill would require boards to give a reason for rejecting an applicant: “We felt that (co-op) boards could be discriminating against certain buyers. Right now, if someone is rejected, no reason is given and there’s no accountability.” 

Years of frustration for co-op transparency advocates may finally be ending. As a result of recent Election Day victories, Democrats will gain control of the state Senate in 2020 for the first time in almost a decade. Democrats control the state Assembly by a wide margin. “I believe that the current composition of the state Assembly and Senate might be more favorable to co-op transparency legislation,” Kramer says. “I like the chances of it happening next year.” 

Some Westchester County property managers are wary of the new law. 

“It will be more work on our end to make sure (co-op) boards are making those time frames,” says Robert Ferrara, president of the Ferrara Management Group, which manages about 35 co-ops in Westchester. “Ultimately, I think it will be more time-consuming and be more paperwork.” 

If a board rejects an application, it has 15 days to notify the Westchester Human Rights Commission, which has the authority to investigate discrimination charges. Co-ops that fail to notify the commission in the allotted time face a $1,000 fine for the first offense, $1,500 for a second offense, and $2,000 for each subsequent offense. 

Ferrara’s biggest concern is that co-ops’ legal costs could go up if the new law triggers lawsuits against boards for rejecting an applicant. “Most of the properties we represent are very diversified by age, religion, and race,” he says, “and we’ve never encountered a board that was discriminatory. Ultimately, [the financial impact] will be minimal if the boards are reviewing the application packages in the proper manner.” 

In Kramer’s view, concerns about rising legal costs are groundless. “The only time a co-op would have additional legal fees is if they have a pattern of multiple rejections and the commission would ask for an explanation,” he says. 

Other jurisdictions in New York State, including Rockland County, Suffolk County, and the village of Hempstead, have enacted co-op transparency legislation similar to the new Westchester County law. Could the rest of the state – including New York City – be next? 

Kramer, for one, believes greater openness could prove a blessing rather than the curse so many co-op advocates fear. “Maybe the value of co-ops will go up,” he says, “because the process will be more transparent.” 

The bill will be signed by the County Executive George Latimer on December 14th.