Rockland Legislature Passes Co-Op Purchase Reform Bill
John Jordan | February 2018
NEW CITY—Realtors who have pressed state and local lawmakers for years for cooperative purchase transaction reform scored a major victory on Tuesday night when the Rockland County Legislature passed unanimously a bill that requires co-op boards to make a timely decision on applications by prospective buyers.
The bill, sponsored by Legislator Alden H. Wolfe, requires a co-op board to provide written notice to the applicant of its decision within 45 days of the receipt of a fully completed purchase application. If the co-op board fails to act on that application within the mandated 45-day period, the application will be deemed approved.
The reform bill affects an estimated 2,644 units of housing on 20 parcels in Suffern, Spring Valley, Hillcrest and Garnerville. Wolfe, an attorney, tells Real Estate In-Depth that he proposed the co-op reform bill based on his experience with sellers who experienced significant delays in closing sales transactions due to co-op boards’ inaction. He also relates that he received input from local Realtors and staff from the Hudson Gateway Association of Realtors, specifically HGAR Government Affairs Director Philip Weiden.
“This can really affect anyone—from young professionals and single-mothers to empty-nesters and retirees,” Wolfe says. “People approach the application process in good faith but face the very real prospect that they may be left in limbo when it comes to their housing situation simply because a co-op association isn’t responding in a timely way.”
Other key provisions of the legislation include that if the application is deemed incomplete, the co-op has 10 days to notify the applicant in writing and explain what is required to render the application complete.
Within the 45-day period for a co-op board to act on a completed application, the co-op board may reasonably request additional information. Also, delays due solely to an applicant’s unavailability to appear for an interview will not be counted in the mandated 45-day period.
Wolfe notes that prospective buyers can be rejected if they don’t meet the association’s financial criteria or if they are unwilling to comply with the association’s rules. “But, time and again, prospective buyers are left to wonder when—and if—their application is going to be approved,” he adds. “If an association wants to reject it, then reject it. But, don’t leave would-be-buyers and their sellers in limbo.”
Prior to the vote, Legislator Charles Falciglia said the co-op reform bill was probably the best piece of legislation he had seen as a county legislator. “It’s a long time coming, probably two to three decades,” he said. Legislator Falciglia added that he would have liked to have seen a provision in the bill that would require a co-op board to give a reason for the denial of an application. He said that issue could perhaps be taken up by the legislature at a later date.
Legislator Wolfe in response said that he felt in drafting the bill that such a provision would not achieve the goal of eliminating discrimination in the cooperative purchase process since he believes the associations that do engage in discrimination would never detail in writing their true reasons for the denial.
He said the final bill was a “common sense law we can all get behind,” but also struck a balance with the existing legal powers of a cooperative association. The law will take effect 90 days after it is filed with the New York Secretary of State.
The Hudson Gateway Association of Realtors and the New York State Association of Realtors have long advocated for cooperative housing disclosure legislation both locally and statewide. In Westchester County, a bill was recently introduced by County Legislators Catherine Borgia and Christopher Johnson that would impose the same 45-day time frame for a co-op board to make a decision on a completed application as well as the 10-day window to acknowledge the receipt of an application from a prospective co-op purchaser.
Where the legislation differs from Rockland County’s bill is that the Westchester bill would also require within that 45-day time period to state the reason for a rejection of an application.
The Westchester “Fairness in Cooperative Housing” bill is scheduled to be taken up in committee on Feb. 26th.
HGAR officials praised the Rockland County Legislature’s vote on the cooperative purchase reform legislation and are hopeful that County Executive Ed Day will sign the bill into law.
“HGAR applauds the Rockland County Legislature for unanimously passing co-op transparency legislation. Our hope is that other counties and the entire state will pass similar legislation to help streamline the co-op purchase process,” said HGAR Chief Executive Officer Richard Haggerty.
HGAR President Barry Kramer, a longtime advocate for cooperative transaction reform, said the Rockland bill improves the transparency of the process and fosters fairness for the consumer. He adds that while Realtors would have preferred that the bill include the requirement for co-op boards to state the reason for a rejection of an application, the Rockland bill “is a good start” that definitely improves the co-op purchase transaction process in Rockland County.
The New York State Association of Realtors has once again included cooperative disclosure and reform legislation as one of its priorities for the current legislative session in Albany.