Co-op Transparency Law Coming to Westchester County

In a major setback for co-op advocates – and a major victory for transparency proponents – the Westchester County Board of Legislators is poised to require co-op boards to give their reason(s) for rejecting potential apartment buyers. The legislators are expected to approve the bitterly divisive measure on Monday, June 28. County Executive George Latimer has expressed his intent to sign it into law.

“We’re obviously very disappointed,” says Tim Foley, who heads the Co-op and Condo Advisory Council of Westchester, which vigorously opposes the law. “Mostly we’re disappointed that co-op boards will now have to give reasons for rejecting buyers. Ultimately, the majority of the legislators don’t believe co-ops will face added liability because of this law.” Foley adds that he expects the law to result in more challenges to purchase rejections, which in turn will lead to higher legal costs and insurance premiums for co-ops. 

The bill received equally vigorous support from the Hudson Gateway Association of Realtors. “We’re optimistic,” says Richard Haggerty, the association’s chief executive. “But until it’s passed and signed into law, I’ve learned not to count my chickens.”

Haggerty, who lives in a co-op on the Upper East Side of Manhattan and has served as president of a co-op board, believes the new law will be beneficial to co-ops. “We feel the process of buying and selling co-op apartments should be more transparent,” he says. “I’ve lived in co-ops for 25 years, and the process has stigmatized the desirability of co-ops because you can go through the entire application process, which can be expensive, and all of a sudden the rug gets ripped out from under you – and you don’t know the reason why.” 

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The new Westchester law will add other requirements to a transparency bill that passed in 2018. Application packages must now include a notice of the protected classes under the county’s Fair Housing Law. The county’s Human Rights Commission (HRC) will create a new standardized form that co-op boards must submit within 15 days of rejecting a purchaser. That form will include the reason for the rejection. The law adds the requirement that boards must specify their “minimum financial qualifications” for buyers. If no such qualifications exist, boards must state their “preferred” minimum income and debt-to-income ratio, as well as total assets, credit score and debt-to-income ratio.

There are sections of law on which the opposing sides are in agreement. One is the requirement that all board members must also undergo at least two hours of fair housing training every two years under a program yet to be developed.

“It’s not just about admissions,” Foley says. “It will also cover reasonable accommodations boards have to make for people with disabilities, which is a good thing.” He says he’s less sanguine about the requirement that co-ops without established minimum financial qualifications for buyers must spell out their “preferred” income level. “Some co-op boards are leery about it because they don’t have a  policy in place, and now they’ll have to disclose a minimum requirement,” Foley says. “They’re going to have to come up with one, and they’re worried they might get it wrong.”