Historically, co-op boards in New York City haven’t been required to provide much of an explanation to applicants about why applications for co-ops are rejected.
Many applicants with good financial portfolios, good references and good credit ratings are still denied an apartment, causing a lot of bad feeling and bewilderment. (Of course, there are situations where co-op applicants are told why they are rejected—in the case of a bad credit report, for example.)
In areas where condos are the rule and co-ops the exception—meaning most areas outside New York City and even an increasing number of areas within it—many people look upon the strenuous co-op approval process with trepidation and a little suspicion.
Now, the whole acceptance/rejection process may become a whole lot more transparent in the five boroughs. City Councilman Hiram Monserrate, D-Queens, has introduced a bill, known as Intro 119—“The Fair and Prompt Co-op Disclosure Law, “ or more commonly referred to as the written rejection bill—that would give co-op boards five days to give a rejected prospective buyer their reasons for the rejection.
The proposed bill requires that co-ops provide rejected applicants a written explanation, signed by an officer of the co-op, detailing each individual reason for the rejection of the sale. In addition the statement must include the number of applications received—as well as the number of applications rejected—in the three years prior to the decision in question.