Cooperative Housing Disclosure

The Westchester County Fair Housing Law requires Cooperative Housing Corporations in Westchester County to adhere to certain time frames and report rejections to the Westchester County Human Rights Commission. Effective August 1, 2021, Section 700.21-a of the Westchester County Fair Housing Law was amended to include additional requirements. Review the full language of the amendment.

Application requirements
Applications for the purchase of cooperative shares must include a cover sheet providing notice in 12-point font regarding:

• The protected classes of the Fair Housing Law; and
• The deadlines and requirements imposed by the Fair Housing Law for receipt, review and rejections of application.
• Note that specific required language is detailed in Section 700.21-a of the Fair Housing Law.

Applications must now also disclose:

• The Cooperative Board’s minimum financial qualifications to purchase cooperative shares; or,
• If no such minimum financial qualifications exist, the Cooperative Board’s preferred minimum financial qualifications.

Rejection notice requirements
Cooperative Boards must use the model form promulgated by the Commission to inform applications of their rejection. The rejection notice must contain, among other things, the following information:

• The full legal name and address of the Cooperative
• Names, addresses, and contact information for all persons involved with the sale
• The reason for the rejection

Review the model rejection form

• Model Rejection form
• Example of completed Model Rejection form

Deadlines

• Within 15 days of receiving an application, Cooperative Boards must either acknowledge receipt of a completed application, or notify applicants of any defects, and provide them with an opportunity to correct said defects.
• Once it has received a completed application, Cooperative Boards have 60 days to approve or reject the application.
• Within 15 days of providing a rejection notice to an applicant, Cooperative Boards must send a copy of the rejection notice to the Commission via First Class mail or electronic mail.

 Fair Housing training

• All Cooperative Board members must complete a minimum of two hours of fair housing training every two years.
• New Board members must complete the fair housing training within 60 days of becoming a board member.
• Boards must maintain training records.
• The training must be live and interactive.
• Minimum standards for Fair Housing training
• Minimum requirements for Fair Housing trainers

Non-Compliance fines
Non-compliance with any provision of the Cooperative Housing Disclosure Law may result in the following fines:

• $1,000 for the first offense
• $1,500 for the second offense
• $2,000 for all subsequent offenses

Frequently Asked Questions

The County’s Fair Housing Law (“FHL”) requires cooperative housing corporations that have minimum financial qualification to disclose those qualifications in their applications. Section 700.21-a (A)(2)(b), however, states in relevant part:

If a cooperative housing corporation does not have stated mandatory minimum financial qualifications … the [cooperative must at least disclose its] preferred minimum income, total assets, and credit score, and preferred maximum debt-to-income ratio and percentage of purchase price being financed, noting that these criteria may vary in the discretion of the governing board weighing these factors when it makes a decision on an application. 

The Fair Housing Law is clear that cooperative governing boards have the discretion to weigh the factors which they set.

The hypotheticals below offer general guidance.

• Cooperative “A” lists the following minimum qualifications:
  
  Minimum Income: $75,000
  Total Assets: At least $25,000 in the bank
  Credit Score: Minimum 725
  DTI: Maximum 30.5%
  
  A prospective purchaser submits an application to purchase shares in a cooperative housing corporation. While the applicant’s credit score (i.e., 750) and DTI (i.e., 25%) meet the stated minimum qualifications, the applicant’s annual income falls below $75,000 because the applicant is retired. The applicant’s income of $50,000 consists of monies from a pension and social security benefits. The applicant provides proof that they have $5M in assets ($500,000 in savings and $4.5M in investments.) The Cooperative Board decides that, in this instance, because the applicant’s assets far exceed its asset requirement, it is going to give greater weight to the assets and lower weight to the income requirement. The Cooperative Board approves the application. Absent other information, this would not be a violation of the Fair Housing Law.
  
  

• Again, Cooperative “A”, as above. They have already accepted the applicant as described in the first example. The minimum qualifications remain the same:
  
  
  Minimum Income: $75,000
  Total Assets: At least $25,000 in the bank
  Credit Score: Minimum 725
  DTI: Maximum 30.5%
  
  The applicants this time are a family of four – two husbands and two children. Similar to the applicant in Example 1, their credit scores and combined DTI meet the stated financial criteria but they don’t meet the minimum income requirement. One husband is a stay-at-home parent and the other was an actor. Their income for the prior year was derived purely from royalties in the amount of $60,000. The couple has assets, including $750,000 in savings and $4M in investments. The cooperative board rejects the application based on “insufficient income” even though they have exercised their discretion to waive this requirement for similarly-situated applicants in the past (see the first example). It is possible that this rejection could be viewed as pretextual under the Fair Housing Law, and that the actual basis for rejection was related to a protected characteristic (such as gender, sexual orientation, or familial status). The merits of any claims, however, would depend on the specific information gathered in the investigation.
  
  

• Cooperative “B” lists the following minimum qualifications: Minimum Income: $100,000
  
  Total Assets: At least $100,000 in the bank
  Credit Score: Minimum 750
  DTI: no more than 28.5%

A prospective purchaser submits an application to purchase shares in Cooperative B. He is 24 years old and recently graduated with a Master’s degree. He appears to meet all of the minimum income qualifications. His income is $105,000/year, he has assets totaling $125,000, his credit score is 757, and his DTI is 28%. However, the Board notes that the applicant was evicted on two separate occasions by former landlords within the past five years. While the applicant meets the stated minimum financial criteria, the Board rejects his application because of his history of evictions. Absent other information, this would not constitute a violation of the Fair Housing Law.

The above general guidance (i) is not binding, (ii) is not to be used in any litigation or proceeding, and (iii) does not constitute legal advice. Each case is fact specific.”