Pending Anti-Co-Op Legislation In The City Council And The State Legislature

There are presently two bills pending before the New City Council Intro 1558-2017, the “Fair Residential Cooperative Disclosure Law,” and Intro 1467-2017, the “Cooperative Corporation: Timing of Decisions Law,” which will have an adverse impact on all the cooperative housing corporations in the City of New York. There is also a bill in the State Senate S 5644, which is called the “Fairness in Cooperative Home Ownership Act.” These three bills are intended to solve a problem that does not exist.

The bills presume that co-op boards are guilty of discrimination although five years ago, the New York City Human Rights Commission testified before the City Council that in the preceding five years there were virtually no complaints of discrimination by co-op boards.


If a purchaser is rejected the board must provide the purchaser with a written statement of all of its reasons for withholding its consents within five days. This requires identifying each element in which the purchaser’s application was deficient and must provide specific information to enable the purchaser to take steps to remedy any deficiency. That means that already overwhelmed boards will be required to review the same application multiple times and there will be litigation against boards in which rejected purchasers will sue to get the court to overrule the board. The foregoing statements must be certified by an officer of the co-op, sworn under the penalties of perjury that the statements are true, complete and specific, and each board member has to state that he or she had no reason for withholding consent other than those in the statement.

Any co-op corporation that fails to comply with the foregoing would be liable for statutory damages in an amount of between $1,000 and $25,000 in addition to the potential damages of costs, attorney’s fees, equitable remedies and punitive damages. Moreover, rejected purchasers or brokers can bring an action in front of the Human Rights Commission, who can also award damages. Even if the commission finds that there was no discrimination the purchaser and the broker can still sue the board and the corporation and the commission’s determination is not binding on the court.


Within 10 days of receiving every submission by the purchaser, the co-op must provide the purchaser with acknowledgement of its receipt. Within 45 days of the receipt of any of the information, the co-op must inform a purchaser whether its consent is granted unconditionally, conditionally, or denied. This is 45 days from the receipt of any document and not the entire purchase application and it makes no difference how many apartments the co-op may have. The board must meet in July and August to review applications unless the By-Laws specifically allow the board to take the summer off in which event the board can obtain a 14 day extension of the 45 day period.

If the prospective purchaser claims “to be aggrieved” by the board, the purchaser can file a complaint with the Human Rights Commission without showing any indication of discrimination or that the purchaser is a “protected person” under the law. Boards and co-ops can be fined $1,000 to $10,000 for violations and the Human Rights Commission has the authority to award compensatory damages, attorney’s fees and equitable relief.

State Senate Bill

S. 5644 requires that within 10 days of receiving an application for purchase, the board must notify the applicant that the application has been received and whether the application is incomplete. The board’s failure to notify the applicant is deemed to mean that the application is complete. Within 45 days of the receipt of the application, the board must either reject or approve the application and advise the applicant of the decision. Failure of the board to act within 45 days is deemed to be approval.

This bill, if enacted, would require boards to review the application within 10 days in order for the board to determine whether it was complete. This legislation assumes that board members are not employed and have no other activities other than waiting for applications; it also assumes that board members can clear their schedules and meet to determine that the application is complete. The 45 day period commences when the application is submitted and not when the application is completed and all the of the board’s questions are answered.


There is no reason for either the City Council or the State Legislature to place this burden on cooperative boards. This is an attack against every single co-op and must be stopped or it will have dire consequences on the entire industry. Every shareholder should immediately contact their City Council and State Legislative representatives and tell them to not support these bills.

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