Westchester County Passes Co-op Transparency Bill by Large Margin

In a move vigorously opposed by co-op advocates, the Board of Legislators in Westchester County voted overwhelmingly on Monday – 15-2 – to approve a measure that requires co-op boards to provide a written reason for rejecting a prospective buyer’s application. Under the measure, the reason must be included when the co-op files notice of a rejection with the county's Human Rights Commission.

The hotly contested new legislation also requires co-op boards to inform prospective buyers of their co-op's minimum financial requirements or financial preferences before home seekers file an application. It also requires that all co-op board members undergo at least two hours of fair housing training every two years. 

"This measure increases transparency and fairness in the co-op buying process,” says Catherine Borgia, the legislation’s chief sponsor. “Buyers will know in advance what the financial requirements are – before they spend money on application fees. And they'll know after the fact, if they're rejected, exactly why. Furthermore, the Human Rights Commission will have the information it needs to protect Westchester residents if discrimination is taking place. That's been a missing tool in the fair-housing toolkit to date.”

Tim Foley, head of the Co-op and Condo Advisory Council of Westchester, disagrees. “Obviously we’re disappointed, but I’m not very surprised,” Foley says. “Now we’re spending our time making sure the implementation of the law is smooth for co-op boards and their managing agents.” The council, he adds, will begin offering monthly fair housing training sessions under guidelines set by the Human Rights Commission.

The new law does not change any of the reasons that co-op boards may legally reject buyers. Co-op boards have wide-ranging discretion in choosing who to reject and why, ranging from financial qualifications to the belief that the applicant would be a bad neighbor. However, under fair housing laws, applicants cannot be rejected on the basis of race, familial status, national origin, religion, disability, sex or other criteria. That hasn’t changed.

Also unchanged are time frames passed by the county in 2018, which co-op advocates unsuccessfully opposed. Under those rules, co-op boards have 15 days to notify a prospective purchaser that the application is complete, or specify deficiencies. Boards then have 60 days to accept or reject a completed application. 

Damon Maher, chair of the Labor & Housing Committee, sought to allay some of the fears of co-op advocates. “Providing a reason (for rejecting an applicant) won't have any negative impact for co-ops that aren't discriminating illegally,” Maher says. “Suffolk County has had a provision like this in place for more than a decade, and that law has not led to increased litigation or insurance costs, as some co-op boards feared that it would. There's really no evidence that this will have a negative impact on any co-ops that are behaving properly. In fact, having a reason for rejection in writing – and having co-op board members get fair housing training – will probably protect co-op boards from possible litigation."

County Executive George Latimer has announced his intention to sign the bill. The new law will go into effect on Aug. 1.