ARTHUR WEINSTEIN ON ADMISSION POLICIES, PART 1

 

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I'd like to go over with you, much as you did in your CNYC conference seminar, the more significant points of this application form.

The first thing ... is what you don't want to transmit to your board. Not only are there tremendous privacy issues involved in this application, but there's also risk to the co-op that there's too much information for the co-op's own safety.

What do you mean?

An applicant could argue that you knew their age, race, handicapped status or status in one of the other thirteen categories "protected" under city, state and federal discrimination laws. Evidence that the board had such facts in the application may be used as the basis of a complaint that the co-op has discriminated against the applicant. But if the application itself doesn't contain information that relates to areas of possible discrimination, you can rely on the application not being a possible source of evidence in a discrimination claim.

Also, I always recommend that there be a human body between the board of directors and the applicant. That is, there should be an initial review of the application by the building's managing agent or attorney, who should do an initial review of the application for completeness or obvious gaps. That will avoid discussions between board members and the applicant, seller, their brokers, or attorneys in which, "prohibited" information may be provided to the directors. I strongly suggest that self-managed building use their attorneys as the physical body between the board and applicant.

If the application gives the

board too much information,

any rejection can be challenged.

If the application gives the board too much information, any rejection can be challenged by the applicant going to any of the city, state or federal human rights agencies and saying, "I'm a member of a protected class, that is, I'm gay, or black, or handicapped, or a non-citizen, or a single parent (or any of the other protected classes) and I allege that I was rejected because I'm a member of that class." And once they show that board members knew that they were a member of that class, then these agencies almost automatically find what they call prima facie evidence of discrimination and then the co-op has to justify the rejection. Whereas, if the board hadn't gotten that information it would be okay.

There is another fact that must be kept from the application package sent to the directors. The applicant's Social Security number should never be distributed to board members or anyone other than those who absolutely must have it for credit and background review purposes. On the application, we place the credit-report application in the very back of the package in a separate, removable section with the warning: "Not for distribution to directors or any other parties." In an age of frequent identity thefts, it is both unwise and, in some cases, illegal to distribute a Social Security number to someone who does not have a demonstrable need for it.

You've got this checklist in the beginning. Why is that important?

Somebody has to review the application to make sure that everything you've asked for is complete and, as we've said, it should not be a member of the board. My office, for instance, has a letter of transmission that goes with this application that highlights all of the requirements of the application form. I believe each building should have a clear and concise checklist that applicants fill out. That helps them organize all the required information. The letter can also provide information about the co-op's procedures and policies and offers proof for the board that the potential buyer has been advised of them, understands them and agrees to be bound by them. The form shows that the board has given the applicant an opportunity to look at the proprietary lease and the house rules, the co-op's admission procedure, alteration polices, and any other rules that the co-op wants incoming shareholders to know.

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