By Orlando Lee Rodriguez
The New York City Council began hearing testimony on Tuesday from industry experts regarding proposed bill ‘Intro188’, which would aims to make the purchasing process for cooperatives more transparent.
The bill, sponsored by Brooklyn City Councilperson Lewis A. Fider, would require all co-op boards to provide a standardized application along with a list of requirements. A written decision would also have to be received within 45 days of a completed application. Fines could run as high as $15,000 for repeated violations by co-op boards.
“There is no question that discrimination goes on in the purchasing and selling of a co-op,” Filder said to the New York Post.
Advocates say that over the years prospective tenants, brokers and sellers have complained that co-op boards have been allowed to keep their approval process secretive, rejecting multiple buyers for unknown reasons.
That, brokers say makes large headaches for sellers who sometimes have to wait years to unload their properties, held hostage by co-op boards who don’t have to give a reason for a rejection.
“The Real Estate Board of New York strongly supports introducing timeframes and increasing predictability into the purchase process of coops,” said Steven Spinola, president of REBNY. “Providing a transparent framework around real estate transactions is good for the buyer and the seller of a coop, and good for City coffers. We favor these measures that will provide buyers with the certainty they deserve for these significant investments.”
Pamela Liebman, Corcoran Group president, testified in front of the council in support of the bill along with Frederick Peters, the president of Warburg Realty; and Michael Bisordi, president of Tungsten Properties.
However, opponents of the bill say that it infringes on their right to approve tenants who will be good and responsible neighbors.
“What this bill fails to acknowledge is that the boards cannot afford to make a mistake in admitting new owners because it will turn the building’s quality of life upside down,” said attorney Stuart M. Saft, President of Park 86 Apartment Corp. “It is virtually impossible to evict a troublesome new owner or one that does not pay maintenance. What about the rights of the people who already live in the building?”
“What this bill does do is assume that the boards and the owners, who elect the boards, are somehow involved in a scheme to discriminate… and that is somehow going to solve the problem that doesn’t exist,” he said.
However, buyers have complained that discrimination does exist.
In October of last year, the board of 210 E. 36th Street rejected a wealthy business student from The Republic of Mauritius who intended to pay an entire year of maintenance fees in advance as well as pay for the apartment in cash, according to the New York Daily News.
The man, Goldwyn Thandrayen, 25, has filed a lawsuit for $1 million for discrimination in Brooklyn Supreme Court.
And claims of discrimination by co-op boards against financially qualified buyers goes back even further.
Back in 1990, The New York Times reported that as co-op boards began to form in the outer boroughs, complaints of discrimination began to rise. Back then, the paper reported on a $52,000 award by the Human Rights Commission, the largest of its kind at the time, and overruled a Jackson Heights Co-Op board to sell an apartment to a woman who the commission said had been rejected because her children were black.
Sellers have complained also, saying that boards have rejected multiple buyers, scaring away brokers and keeping resident’s hostage in an apartment they no longer wish to live in and costing sellers thousands of dollars.
“Our unit went unsold, partly, I suspect, because most brokers were wary of this board and this building,” owner Tom Sinclair said to Habitat.com, an online magazine for board members and property managers of co-ops and condos. “For more than a year, we had to pay mortgage fees and carrying charges on an apartment we no longer needed or wanted. It cost us a lot of money and grief.”
“We finally sold the apartment for $309,000. That’s a full $50,000 less than we would have gotten if our original buyer had been approved.”