(c) Cox & Forkum 2003
If New York Assembly Bill A00259 is passed, co-op boards would be required to give written reasons to a rejected buyer within 5 days of the decision. Currently, Boards universally reject without any reason, causing untold consternation to buyers and sellers alike. Losing 30-60 days on a buyer is costly to both sides. Not getting a reason why just adds to the injury.
Co-op boards, fearing litigation, have hidden behind the existing law, created by the Courts as the Business Judgment Rule, which says, as long as it’s not discriminatory, the Court will not substitute its judgment for that of the co-op board. It sounds logical but how is a buyer to prove discrimination if there is no written evidence to take to Court. There are no transcripts or written records of the interview or decision process. Rarely will a lawyer take a case based on he-said she-said evidence.
Many boards do not know what constitutes discrimination under the law. Yes, they all know the obvious prohibitions against race, color, creed. But do co-op boards throughout the city know it is illegal discrimination to primarily base a rejection on a marital status (single parent) or age (a senior citizen)? I doubt it. I was involved in such a case. The Board rejected the buyer, who was financially sound, with no disclosed reason. Suspecting familial (marital) status dicrimination, we filed a case with the Human Rights Commission. HRC found discrimination.
To learn how to force a co-op Board to give you a reason for a rejection see How to Overthrow a Tyrant: Fighting a Co-op Board Rejection.
Sic semper tyrannis!
Other co-op/condo bills pending:
A09490: Requires the licensing of Building Managers of multiple dwellings. The law would require management courses to obtain the license.
A03813: Automatic approval of buyer if co-op Board does not act within 60 days. I have seen co-op bylaws that have this provision to deter unreasonable Board delay on submitted packages.
