City Council Eyes Co-Op Secrecy
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

Co-op boards would have to tell rejected prospective apartment buyers the reason they were deemed unworthy, under a bill to be considered in the City Council before the end of the year.
Current law prohibits co-op boards from discriminating against applicants based on race, religion, gender, and other criteria, but the often secretive and finicky boards are not required to say why they have rejected an applicant.
The proposed fair and prompt co-op disclosure law would amend New York City’s human rights law to require co-op boards to provide prompt, written notice of their reasons for rejecting applicants. The bill’s main sponsor, Council Member Hiram Monserrate of Queens, said he expects the legislation to pass by year’s end.
“The issue is really one about fundamental fairness,” Mr. Monserrate told The New York Sun. “A citizen of the U.S. goes and wants to purchase a co-op in an apartment building in a certain part of New York City, they should be given the reason they are denied. They should be told why.”
Mr. Monserrate said he expects the bill to face considerable opposition.
The president of the Council of New York Cooperatives & Condominiums, Marc Luxemburg, said the law would infringe on the rights of property owners.
“Basically, when you accept someone into your co-op, you are essentially inviting them into your house. You don’t have to give a reason to invite people into your home. Nobody does,” Mr. Luxemburg said. “You are entitled to your own thoughts to what your reasons are. You are entitled not to like people.
“What’s a reasonable reason?” Mr. Luxemburg continued. “You shouldn’t have to give reasons for matters of privacy, and for subjective opinions. We are entitled to have our privacy in this society.”
A supporter of the bill, Council Member John Liu of Queens, said he has received an “unexpectedly high number of complaints from constituents concerning the way in which the building boards have operated and made decisions.”
Mr. Liu, a former employee of the accounting firm PriceWaterhouseCoopers, said there is a public benefit of bringing an increased level of transparency to co-op boards.
“It doesn’t hurt, and it certainly would be helpful for people to better understand the decision-making process within their buildings,” Mr. Liu said. “There is no harm and probably some benefit in more transparency and accessibility. A co-op board is not comparable to a private family.”
Aaron Shmulewitz, an attorney who specializes in condo and co-op law for Belkin, Burden, Wenig & Goldman, said the bill was unlikely to pass.
“This kind of bill has been proposed several times in the City Council and the state Legislature, and it’s always been defeated,” he said. “The co-op and condo industry has a very strong interest in preserving the right of co-ops not giving a reason for turn-down.”
Over time, Mr. Shmulewitz said, co-op boards have felt their power whittled down. As it stands now, he said, boards can legally turn down applicants for any reason, as long as it is not a discriminatory reason, like a decision based on race, religion, or gender.
The city already has a law banning discrimination in housing accommodations based on “race, creed, color, national origin, gender, age, disability, sexual orientation, marital status, or alienage or citizenship status.” The state adds “military status” and “familial status” to the list of criteria, while the federal government bans discrimination on the basis of religion, in addition to some of the other categories.
Mr. Shmulewitz said that co-op boards are often challenged with complaints from rejected applicants who feel they have been discriminated against.
Mr. Shmulewitz said the proposed disclosure law would likely be ineffective because co-op boards could provide an acceptable reason for turndown, even if they were actually discriminating.
“They could say…’we just got a bad vibe, or whatever,'” he told the Sun.
The bill, which is co-sponsored by 22 council members, was introduced in November of 2004. It was discussed in a hearing in the council’s committee on general welfare in late September and will be debated again before it is voted on.
The 22 co-sponsors do not include representatives of the Upper East Side and Upper West Side neighborhoods that contain the most selective and exclusive co-op buildings.
The proposed legislation says that current co-op disclosure practices impair the city’s ability to identify unlawful discriminatory practices, have facilitated the ability of co-ops to craft a “variety of pretexts for having withheld consent,” and have deterred many New Yorkers from buying co-ops.
The bill also says non-disclosure has “interfered with economic transactions, limited mobility, exacerbated the City’s housing shortage by impeding the optimal efficiency of the housing market, and has reinforced economic, racial, and other forms of segregation in the City.”
The proposed law would impose fines on any co-op board that failed to meet the new requirements. To compel truthful statements, the bill says that the “penalties of perjury” could be evoked.
A spokesman for Mayor Bloomberg, Paul Elliot, said the administration would not comment on pending council legislation at this stage in the process.
Mr. Liu said the proposed law could face legal issues about the City Council’s jurisdiction over co-ops and a challenge from the Bloomberg administration. But he said the bill might have support in the 51-member council. “I think 22 sponsors is nothing to sneeze at,” he said.