By: Kelly Ringston, Esq. and David Blessington, BG Summer Associate
Assembly bill A1267 (S6408-D) – which proposes a uniform application process for the purchase of a cooperative apartment – made a surprise reappearance in State Legislature’s summer session. Though the bill did not make it to the floor before the legislative session closed, it will undoubtedly be back, as a version of the bill has been offered during every session for the past several years.
Under the proposed legislation, boards would have to establish and adhere to a uniform application process for considering applications to purchase an ownership interest in a residential cooperative and provide sellers, prospective purchasers and their respective agents with a written copy of that process. Upon receiving the application, boards would be required, at a minimum, to acknowledge its receipt within twenty-one days and inform the applicant of whether the application fully satisfies the requirements. If the application is incomplete, the board must inform the applicant why it is incomplete and state what additional information is needed. Once complete, the board must notify the applicant that the application is complete, as well as provide the date that the Board will conclude its review of the application and the date when the applicant can expect a decision from the board on whether it has granted or denied consent to the sale. Notably, if a board denies consent to a proposed sale, it must include the reason for the denial in the notice; and if it fails to notify the parties of its decision within 90 days of the submission of a completed application, consent is deemed to have been granted.
The bill’s supporters assert that it is necessary to increase uniformity and transparency around the cooperative buying process and to protect applicants from illegal discrimination. Opponents, however, argue that the imposition of strict, arbitrary deadlines on volunteer cooperative boards are impractical and requiring boards to specify the reason for an application’s denial will have no meaningful impact on the reduction of housing discrimination.
Though paused for now, the debate is sure to continue in the future. With potentially drastic changes to the co-op purchase application process on the horizon, co-op boards and shareholders alike will want to continue monitor this proposed legislation.