For decades, buying a co-op apartment in New York City often meant waiting months — and sometimes longer — for a decision from a building’s board.
That process is now subject to new deadlines under a city law that took effect this week, requiring co-op boards and management companies to follow a standardized timeline when reviewing purchase applications.
The law, approved by the City Council in January, is intended to bring more transparency and predictability to the process.
Unlike condominiums, co-op buyers purchase shares in a corporation that owns the building rather than an individual unit. Because of that ownership structure, prospective buyers must be approved by a co-op board before completing a purchase.
Critics have long argued that the board approval process has been used to discriminate against some applicants, particularly people of color, with boards sometimes citing subjective or arbitrary financial standards when rejecting buyers.
City officials have said the lack of standardized procedures created uncertainty for applicants while raising concerns about potential discrimination.
For Terry Meehan, the process was anything but straightforward.
Five years ago, he, his family and their dog, Rufus, found a co-op on the Upper West Side they wanted to buy. After working with a real estate broker to assemble their application, Meehan said the paperwork grew to nearly five inches thick.
“I mean they know what we have for breakfast,” said Meehan. “They knew everything we did for the last seven years, they had pictures of our dog, they had references for the dog, everything.”
Meehan said finding the apartment, negotiating the price and signing the contract took only a few weeks. The board’s review of the application, however, stretched on for months.
“That took seven months,” he said.
Under the new law, a co-op’s management company must acknowledge receipt of a purchaser’s application materials within 15 days. Once an application is deemed complete, the co-op board has 45 days to approve or deny the sale.
If a board fails to meet those deadlines, the applicant is not automatically approved. Instead, the city’s Department of Housing Preservation and Development can issue fines starting at $1,000.
The law includes several exceptions.
Boards may suspend the review timeline during a summer recess between July 1 and Aug. 31. Applications may only be received during normal business hours.
While cooperative corporations may request additional information from applicants during the review period, those requests do not restart the deadline.
Rebecca Poole, executive director of the Council of New York Cooperatives and Condominiums, said co-op boards have been preparing for the changes since the legislation passed.
She said some boards remain concerned about the initial 15-day deadline to acknowledge receipt of a completed application because that portion of the process often involves the greatest amount of coordination.
“That process is usually the most intensive and goes through the most number of people,” she said.
Poole said the new deadlines will not reduce the amount of financial documentation boards request from prospective buyers.
“It can’t be lessened because the important thing to understand is that when somebody purchases into a co-op, their ability and willingness to pay their share on time impacts everybody else in the co-op. So the review of the financial package is the most one of the most important ways in which a board can protect the ongoing viability of the co-op into the future.”
While the new law establishes deadlines and procedural requirements, it does not change the longstanding authority of co-op boards to approve or reject prospective purchasers.