Page 8 - CooperatorNews New York September 2021

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SEPTEMBER 2021
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Displaced Co-op
Shareholders Sue the City
Class-Action Suit Aims to Compensate
Affected Families
BY DARCEY GERSTEIN
NBC News recently reported on a 2019 class-action lawsuit filed by shareholder-tenants
of several New York City co-ops that the city took over under the aegis of a controversial
program called Third Party Transfer (TPT). The program was started in the 1990s during
the Giuliani administration, and allows the City to seize distressed or abandoned private
property and give it to developers—ostensibly to create low-income housing and eradicate
“widespread blight.”
The plaintiffs in the class action allege that seized properties were not distressed as de-
fined in the TPT program’s guidelines, and that the City failed to timely notify the nearly
700 affected homeowners—most of them Black and Latinx—that they were in danger of
losing their homes. As such, say the plaintiffs, the program has unfairly aided gentrifi-
cation, displaced families of color and deprived them of millions of dollars in potential
equity. According to the plaintiffs’ attorneys Gregg Weiner and Matthew Bermanhey, they
are seeking $1 billion in collective lost equity and wealth from the city and its developer
partners.
After it was stalled by a lower court, reports NBC News, the suit was allowed to move
forward in June of 2021 when the 2nd U.S. Circuit Court of Appeals advanced the case.
One of the three named plaintiffs, Sherlivia Thomas-Murchison, wrote of the TPT
program in a statement to the court, “The same laws were craftily manipulated and re-
interpreted to usurp property rights, and steal resident-owned and controlled cooperative
New Rules for Westchester Co-ops
Boards Must Disclose Reasons for Rejecting Buyers
BY A J SIDRANSKY
Westchester County lawmakers recently passed additional rules for its Co-
op Disclosure Law, which itself dates back to 2018. The law originally gave
co-op corporations and their representatives 60 days to determine whether a
purchase application package was complete after receiving it. If the applica-
tion was ultimately rejected, the board was required to notify the Westchester
County Office of Human Rights.
In addition to the existing requirements, the new regulations also mandate
that co-op boards and their representatives disclose the financial requirements
for purchase, and that they give rejected purchasers an explanation—in writ-
ing—of the reason or reasons for their rejection, along with still filing with
the Office of Human Rights. Along with the amendments, county lawmakers
also drafted a list of possible legal reasons why a prospective purchaser might
be rejected—nearly all of which are based on economic considerations. They
include everything from minimum income or cash requirements instituted by
an individual co-op corporation to minimum required credit scores, as well
as other financial considerations, such as the purchaser’s debt ratio. This new
regulation is designed to be specific, and to weed out potentially discrimina-
tory reasons for buyer rejections.
How Pervasive is Discrimination?
Is discrimination in co-op sales a major issue in Westchester County? Are
co-op boards rejecting financially sound purchasers for other, possibly illegal
reasons? According to Stuart Halper, an attorney and vice president of Im-
pact Management, which has offices in Westchester, New York City and Long
Island, the short answer is, “No. There haven’t been any claims of discrimina-
tion going on in the buildings I manage. The real issue,” he says, “is that when
a potential purchaser is declined, there’s a cloak of secrecy, and that’s what
Westchester County officials are trying to eliminate. Boards are now required
to give a reason [for rejecting a buyer].”
“In New York City it’s the same issue,” continues Halper, whose company
manages over 100 co-op and condo properties in the New York area. “This
is more of an activist issue than a real issue. Elected officials don’t necessarily
understand how co-ops work—and they’re unaware of the burden they are put-
ting on co-op boards, which are composed of volunteers.”
Halper explains further when there truly is discrimination, it’s apparent—
and actionable. “You don’t need this kind of regulation,” he says. “It’s obvious
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Co-ops and Condos Must
Comply with HERO Act
Three Deadlines to Be Aware Of
BY DARCEY GERSTEIN
Law firm Seyfarth Shaw issued a release last month reminding New York coop-
eratives and condominiums that they are subject to the New York Health and Es-
sential Rights (HERO) Act that was signed into law on May 5, 2021. The new De-
partment of Labor (DOL) workplace health and safety law is intended to protect
employees from airborne infectious diseases such as COVID-19 in the workplace.
All New York State employers, including cooperatives and condominiums, must
comply with this law. There are three dates that employers and employees should
be aware of in regard to the law, says the release:
August 5, 2021: Employers must adopt a safety protocol. They can use the DOL’s
model safety protocol, which generally tracks the state’s recently discontinued CO-
VID-19 guidelines.
September 4, 2021, or within 30 days of officially adopting a safety protocol:
Employers must provide the adopted safety protocol to their employees, including
building staff, and post the protocol in a “visible and prominent location.” (Due to
the Labor Day holiday, notes Seyfarth attorneys, the likely effective date for this
obligation is Tuesday, September 7).
November 1, 2021: A separate part of the law goes into effect that requires em-
ployers to permit employees to form a joint labor-management workplace safety
committee with employee and employer designees. The DOL has not yet issued
guidance regarding this portion of the law.
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