Time Is Not On My Side

Courtesy of Frederick Peters, President of Warburg Realty

As everyone who lives here knows, anyone who wishes to buy in a co-op building in New York must follow an admissions process akin to that for a private club. Reference letters and detailed financial disclosure are required. What people don't know is that sometimes, when a Board is not enthusiastic about an applicant, they express this lack of enthusiasm through delay. Two months, three months go by without either a rejection or a request for an interview. Maybe additional documentation is requested at some point. But it can be a period during which both buyer and seller are held captive. In a rising market like this one, it is a terrible disadvantage to the buyer, for whom similar apartments may soar out of reach while he is waiting for a Board decision. In a declining market like the one we were in four years ago, it is the seller who loses out. If the buyer is not approved, the apartment has diminished in value during the process and the longer the time, the greater the loss.

Early last week I testified before the City Council about this issue. My colleagues Pam Liebman from Corcoran and Michael Bisordi from Tungsten Properties joined me in addressing issues pertaining to Intro 188, the recently re-introduced bill which would both create timing deadlines for co-op Board deliberations regarding prospective buyers and compel Board members to attest that they practiced no illegal discrimination in the process. Our testimony went entirely to the first issue: timing. We all three think some timing parameters are a good idea.

Creating intelligent time parameters for co-op Boards (and condo Boards, which are at least as guilty if using delay to signal displeasure) hurts no one. Instead, it creates clarity for all parties. Buyers, sellers, and Boards would all know exactly what the parameters are. The requirements would be clear, and the amount of time the Board would have to deliberate after receiving a complete package would also be clear. Intro 188 suggests 45 days, which sounds like plenty of time to me. And I was a co-op Board president for many years, so I know that time frame is not onerous. And the time period would be longer in the summer.

The illegal discrimination part of the bill seems more problematic to me. First, New York City has the broadest fair housing laws in the country, with a long list of protected categories. I am certain the majority of co-op Board members do not even know what the protected categories are, or that co-ops are subject to the same fair housing rules as every other type of residence. Second, why discriminate against co-op Boards? Surely if the Council is concerned about adherence to fair housing guidelines, landlords are the place to start, since the vast majority of New Yorkers live in rental housing, and there are no such requirements for landlords.

While I understand that ignorance of the law is no defense, I think education is more likely to be effective for co-op Board members than legislation. Mandating that every Board member must receive, at least annually, a list of fair housing protected categories and anti-discrimination information seems like a far more effective solution to me.

I do not believe the proposed anti-discrimination requirements would actually lead to greater transparency. But it would certainly make people a lot more reluctant to serve on co-op Boards!

You can read more on www.warburgrealty.com/blog.