By Bob Friedrich
It was just about a year ago in these pages that I wrote about New York City Council bill Intro 119, aka The Fair and Prompt Disclosure Law, which I had dubbed The 2007 Lawyers Full Employment Act. That bill would have required a co-op to give specific reasons for denying approval to someone looking to purchase a co-op apartment. The bill would have also imposed civil and monetary penalties on both the co-op and the volunteer board members who were not in full compliance with its complicated and time-sensitive reporting procedures. It was a chilling reminder to volunteers that they need not apply. Needless to say, that bill was met with fierce opposition of co-op boards throughout the city who have been successfully establishing admittance criteria for their buildings and protecting the quality of life of their residents for years. However, without any evidence of systemic discrimination in cooperative housing, the City Council is poised once again to impose even more onerous and costly regulatory burdens on co-ops that will be a field day for attorneys. All of this, even though city and state agencies are already poised to bring discriminatory action against any co-op if there is even a mere hint of alleged discrimination in any one of 14 protected classes: age, alien status, children, country of origin, creed, disability, gender, lawful occupation, marital status, military status, partnership status, race, religion and sexual orientation.Turn the clock ahead one year, and the original bill, which died on City Council Speaker Christine Quinn's desk, has been reincarnated as Intro 119-A and given the new moniker “Fair Cooperative Procedure Law.” It is anything but fair. Yes, the civil penalties imposed on volunteers in the original version have been removed, but the newly re-engineered bill takes micro-management to new heights. It will require every co-op in New York City to use a government-designed and mandated application form. This form may not be altered in any manner without first obtaining the consent of a yet-to-be-established city commission that will review it and oversee the admissions procedures of all co-ops. This new commission will have 90 days to review all application changes – regardless of how minor or inconsequential they may be. Innovation and quality control protocols designed to maintain high standards in buildings by volunteer board members who actually live in them will come to a screeching halt. Its one-size-fits-all approach to admission policies is out of touch with the complexities and differences that exist in housing cooperatives. Glen Oaks Village – a cooperative community of 10,000 residents – is the largest garden apartment co-op in New York City. Its application protocol requires that all prospective residents read and understand its house rules, and all are asked questions about them as part of this process. Will the city's new “universal” application form incorporate this unique Glen Oaks feature?This bill requires all co-ops to fundamentally alter the way they conduct screenings and admissions. The newly established “Co-op Procedures Police” will likely be unwilling to approve any changes in admissions policies, as their one-size-fits-all co-op application format will be designed to compile statistics on housing that will inevitably be overanalyzed and misinterpreted by the same agenda-driven bureaucrats who conceived of this unnecessary piece of legislation in the first place. Each co-op has developed its own mechanisms for screening potential shareholders – and they are doing this for no other reason than to protect the quality of life of their residents and ensure the financial integrity of the co-op. Co-ops are unlike single family homes, where the actions of a single homeowner will have little impact on the one living next door. If your neighbor defaults on his home mortgage, for example, you do not become responsible for his payments. Co-ops are materially different. The default of one shareholder becomes the responsibility of all shareholders. The Fair Cooperative Procedure Law is the bull in the china shop that will send co-ops reeling financially and will open the floodgates to costly co-op litigation by real estate brokers whose only interest is to close the deal, get the commission and move on, without any concern for the quality-of-life impact of their prospective purchasers. Every co-op rejection will likely find its way into court, costing it precious resources in these days of tight budgets. Regardless of the legal claim, the threat of costly litigation will force boards to accept individuals against their better judgment. To do otherwise would open the floodgates to protracted litigation and erode the co-op's ability to maintain high standards for its residents.
