Dennis Greenstein Quoted in The New York Times

An article ("If a Co-op Kills a Sale, Should It Say Why?") in the Real Estate section of the March 19, 2006 New York Times notes that a "proposed amendment to the New York City Human Rights Law that would require a co-op board to disclose why it rejected a prospective buyer has elicited sharp reactions from lawyers who represent co-op corporations. The bill was originally introduced in 2004 but never voted on. It was reintroduced earlier this year, and it is now before the council's Committee on Housing and Buildings. No hearing date has been set."

"Under rulings by the New York Court of Appeals, the state's highest court, a co-op corporation can withhold consent to a transfer of shares for basically any reason it deems appropriate — as long as the board's action does not discriminate illegally — and it is not required to tell a rejected buyer the reason. Under the proposed amendment — known as the Fair and Prompt Co-op Disclosure Law — a co-op board that withholds consent to a sale would have to provide the buyer with a written statement of "each and all of its reasons" for doing so within five days. The statement must name the source of any negative information about the buyer upon which the board based its rejection and indicate the total number of applications received by the co-op in the preceding three years and the number of times the co-op withheld consent to a sale."

Dennis Greenstein, a Manhattan co-op lawyer, said the law could have other implications. "I think it will spawn a tremendous amount of litigation," he said. For example, if a co-op tells a buyer he is being rejected for financial reasons, he said, he might sue because he disputes the conclusion. In addition, Mr. Greenstein said, adoption of the amendment will make it virtually impossible for co-ops to get accurate information about prospective buyers. "People will be reluctant to provide any negative information about a buyer if they know they'll be identified as the source of that information if the buyer is rejected," he said.