Albany considers a few bills that could hurt co-ops


For the past several years, legislation has been unsuccessfully introduced in Albany or in the city council that would seek to impede or control the legal responsibilities that co-operatives must exercise in order to operate their homes and fulfill their obligations to their shareholders.

Currently, similar bills have been introduced in the state senate and Assembly that would, if passed, severely hamper co-op boards in the completion of their duties. None of the following bills would, in any way, improve the functioning of co-ops, but rather would hamstring duly elected co-operator-directors from fulfilling their legal obligations.

As the advocate for co-operators throughout our area, the Association of Riverdale Cooperatives & Condominiums opposes S.1449/A.6510, which would seek to demand a formal explanation for any rejection of sale of a co-op apartment. This would do little more than expose co-op boards and their individual members to expensive lawsuits and an endless stream of time-consuming litigation, whose costs would be borne by shareholders and reflected in resultant increased maintenance and assessments.

The bill would do nothing to improve the process of financial review, which is well-governed by existing laws. Any claim by the sponsoring legislators that there may be “unlawful rejection by a board of directors of a buyer,” or that there is a bias or discrimination in the thousands of judgments made annually by co-op boards throughout the city, is specious and unsubstantiated, as demonstrably proven by the current and historic dearth of civil rights claims to contest such board decisions.

ARC opposes S.2846/A.5856 which, by alleging to “improve the transparency of the co-operative purchase process to the benefit of all parties involved in the transaction,” would impose strict — indeed, often unattainable — timelines on the actions of co-op boards during their views of applications to purchases shares.

Co-op boards are comprised entirely of unpaid volunteers who are gratefully elected by building shareholders, and who dedicate as much of their time as possible to their board duties. They generally and necessarily work as rapidly as they possibly can to respond to purchase requests (every co-op would always prefer to have vacant apartments promptly occupied by resident shareholders), along with myriad other issues that come before them.

Quite naturally, with the never-ending avalanche of responsibilities imposed on them, directors must always move the agenda items before them with both due diligence and swiftness.

This bill would needlessly threaten them with repercussions if certain strict and arbitrary timelines are not kept — in utter disregard for other strict regulatory and emergency situations that unceasingly arise.

ARC opposes S.2874/A.1623 — bills that echo the impositions and restrictions described above, and like those bills, would in no way serve to improve the governance or operation of co-ops, but would rather do no more than discourage people from fulfilling their desires to live in co-operative housing or volunteering as candidates for election to co-op boards.

Co-operatives are governed in their operation by existing laws at the federal, state and city levels. They have, for the most part, functioned well and lawfully for decades. More and new ideas about how to restrict or manage them are not required.

On the other hand, we are pleased to welcome the introduction of one newly proposed piece of legislation that seeks to correct certain ambiguities in an existing law.

ARC supports S.5105/A.350. The Housing Stability and Tenant Protection Act of 2019 contained several provisions that were unclear regarding their application to co-ops. This bill would clarify its application to co-ops, and specifically relieve them from many restrictive measures that were imposed in the law as it now stands.

This bill would again allow co-ops to require certain deposits or advances, often used to ensure that “financially borderline” applicants can enjoy the benefit of homeownership. Co-ops would again be able to require fees to management for the processing and review of prospective tenants’ applications, and also fees for background checks, credit checks and, importantly, the ability to recover attorney fees in an action against a tenant-shareholder.

Fees thus allowed relieves individual shareholders from bearing the burden of these extra costs (albeit indirectly via increased maintenance charges) now unfairly imposed upon them per the current law.

As always, individual voices in support or opposition to pending legislation are often the most effective means of influencing prospective votes in the legislatures. ARC urges you to let your opinions be known about these bills now on the floor in Albany.

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The author is president of the Association of Riverdale Cooperatives & Condominiums.

Stephen Budihas,