How Boards Can Get a Snapshot of a Potential Neighbor

But, as Vernon notes, you can ask if anyone planning to live in the apartment plays an instrument.

It's a tricky game. Attorney Michael T. Manzi, a partner at Balber Pickard Maldonado & Van Der Tuin, explains: "Due to the various protected classes in New York, and then those of the state and the fed, it's just one landmine after another."

"You don't want to ask any questions directly or indirectly related to a protected class," agrees attorney Seth Sahr, a partner at Novitt, Sahr & Snow. "Don't ask whether they're married. Don't ask what country they're a citizen of. Don't ask if they have any kind of disability. You wouldn't even ask if they're male or female."

Co-op boards, of course, have not only a fiduciary duty to vet prospective shareholders' financial viability, but a leadership duty to try to ensure that new neighbors are neighborly. "The purpose of the application package," says Sahr, "is to give the board a snapshot of an applicant, in order to help [a board] to discern whether that applicant is someone acceptable to the community, but primarily whether that applicant is able to afford to live in the community."

Without getting sued for discrimination, of course.

According to attorneys Manzi and Sahr, the managing agent usually sends to potential buyers an admissions package (in self-managed properties, it would be sent through the broker by someone on the admissions committee). A number of management firms now make the forms available for download from the management company and/or building website.

This packet of papers has five essential components (another component that boards have included for years, reference letters, may or may not be absolutely necessary). They are:

•  The personal questionnaire

•  The financial questionnaire

•  A credit check and a criminal-background check

•  The transfer documents

•  A litigation search

And finally, most boards want to see reference letters.

"What we're seeing now is some of our boards are trying to streamline the packages a little bit," says Mary Frances Shaughnessy, a principal of Tudor Realty Services. "They haven't yet completely decided how but in general they really feel that the packages are too extensive and there's too much and they can't get through it all."

You don't want to go overboard with your application package, and you don't want to discriminate, either intentionally or unintentionally — the law doesn't recognize lack of intent where that's concerned. If you're sincere about wanting to have a good neighbor, you need to be a good neighbor. That means knowing what you don't need to know.

Adapted from "The Package" by Frank Lovece (Habitat, March 2015).  

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