Most co-op and condo boards are aware of the dangers of discriminating against potential buyers or sub-letters based on race, sexual orientation, or any of the other protected classes. Now the federal courts have given boards something new to worry about. In a ruling with far-reaching implications, the U.S. Court of Appeals for the Second Circuit has decreed that landlords – including co-op and condo boards – face liability under the Fair Housing Act if they fail to address racial discrimination between residents.
“The accepted wisdom has been for co-op boards not to get involved in disputes between residents,” says Michael Manzi, a partner at the law firm Smith, Gambrell & Russell. “This court has said, no, under the Fair Housing Act, boards are responsible for discriminatory acts of one tenant against another. Boards can’t sit on their hands and do nothing, and that’s what makes this a big deal.”
The court decision is the culmination of Francis vs. Kings Park Manor Inc., in which a black tenant at a Long Island rental property, Donahue Francis, was subjected to “a brazen and relentless campaign” of racial abuse by a fellow tenant named Raymond Endres, including harassment, repeated use of the N-word, and at least one death threat. Francis, fearing for his personal safety, contacted the police and the landlord several times. The landlord and management did nothing other than advising Francis to continue calling the police.
Dona Kahn, of counsel at the law firm Anderson Kill, advises boards to designate someone residents can go to with complaints of racial discrimination by a fellow resident. Boards should review their bylaws and revise them, if necessary, so they’re in compliance with this ruling.
“They could also hire an outside person to investigate complaints of racial discrimination,” Kahn adds. “That way they protect themselves against punitive damages because punitive damages require a ‘reckless disregard’ of the law.”