On Board: City Council should dump co-op reject law

By Bob Friedrich

Well, we are on the cusp of seeing just such a law from the New York City Council. This bill will have such a detrimental effect on co-op owners in Queens that it surprised me to find many of its sponsors are the elected representatives of those same owners. I can only conclude that they have not read their own bill or they haven't spoken to any of the co-op leaders in their district. The bill in question is Intro No. 119, called “The Fair and Prompt Disclosure Law,” and it would require co-ops to provide a “specific reason” for rejection of any potential purchaser. But to co-op presidents such as myself who are responsible for co-op finances and the monthly maintenance fees, it spells disaster. This bill is likely to increase monthly co-op charges and make the already difficult task of recruiting volunteer board members impossible. Here in Glen Oaks Village, a volunteer admissions committee created by the board screens all new applicants. This screening process is what sets co-ops apart from other types of home ownership, to insure that all co-op residents truly understand the nature of co-op living. Living in a co-op is more akin to living in a fish bowl than residing in a private home. You have neighbors not only on both sides of you but also above or below you. This close proximity to one another creates all sorts of problems that homeowners rarely face, so the objective is to make sure that prospective buyers understand this. It is equally as important to ensure that new owners have the financial wherewithal to afford the cost of co-op living, which includes a monthly maintenance charge that finances the operation of the co-op. Any failure to pay by one becomes the burden of all. The screening process seeks to weed out those whose finances may put the other owners at risk. When a co-op rejects an application, it generally does so without providing a specific reason which in our litigious society is quite understandable. In fact, the courts have consistently granted co-op boards' great latitude in making such decisions, provided that they do not discriminate.All co-ops know the 14 protected classes under which a purchaser can easily bring an action if applicants believe their rejection was due to discrimination: age, alien status, children, country of origin, creed, disability, gender, lawful occupation, marital status, military status, partnership status, race, religion and sexual orientation. The co-op, like all citizens, is presumed innocent until proven guilty. To do otherwise would open the floodgates to protracted litigation and that is exactly what this bill does. It puts the co-op on the defensive and forces it to prove its innocence even without a scintilla of proof that it has engaged in such activity in the past.The bill would require the co-op to provide a detailed explanation for the rejection. It would give the volunteer board members five days to produce this legal document and certify it. If a court found the reasons for rejection were improper, these volunteer board members could be subject to substantial civil and monetary damages. The overwhelming majority of screened applicants are approved. Certainly there are a few that are denied but this is done not as the legislative sponsors flippantly allege “to conceal arbitrary or discriminatory refusals” but to make the co-op community a better place to live. While most denials are for financial reasons, I have seen prospective buyers denied because they did not care to understand our house rules. I have seen individuals appear at screening in an inebriated or belligerent state. It's doubtful the courts would find these denials permissible because the burden of proof would be too high and could never be met in court. How does the co-op prove belligerence, that the purchaser doesn't understand the concept of co-op living or its house rules? The screening process is designed to protect families who are simply seeking a safe, secure and family-oriented environment. The end result will be a reversal of the boards rejection and an erosion of the co-op's high standards. The threat of costly litigation will force boards to accept individuals that they have every reason to believe should be rejected.Why would the City Council push such a bill when there has been no proof of systemic patterns of discrimination in co-ops? Because some councilmen who probably never lived in a co-op decided to introduce some feel-good legislation. The Queens councilmen whose names appear on this bill need to re-think this ill conceived piece of legislation.

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