New York's Cooperative and Condominium Community

Habitat Magazine Business of Management 2021

HABITAT

CO-OP/CONDO BUYERS

WHAT CO-OP/CONDO BUYERS NEED TO KNOW

Bill Seeks to End Criminal Background Checks on Co-op Buyers

Bill Morris in Co-op/Condo Buyers on September 16, 2021

New York City

Co-op buyers, criminal background checks, co-op boards, Fair Chance Act.
Sept. 16, 2021

A bill now before the New York City Council – backed by the robust sponsorship of 26 council members – would prevent co-op boards from running criminal background checks on people trying to buy apartments in housing cooperatives. The ban on criminal background checks would also apply to landlords vetting potential rental tenants.

The bill states: “It shall be an unlawful discriminatory practice for any real estate broker, landlord, or employee or agent thereof to make a criminal-history inquiry regarding an applicant or to take adverse action against an applicant for having been arrested or convicted of one or more criminal offenses.” A conviction is defined as any legal action that led to a prison sentence, suspended sentence or probation.

If the bill becomes law, it will be seen as a companion to the Fair Chance Act of 2015, which was designed to protect job seekers against discrimination based on their criminal history. When signing the law, Mayor Bill de Blasio said, “This bill opens the door to jobs for New Yorkers who have already paid their debt to society, rather than condemning them to a grim economic future.”

Under that law, employers with four or more employees, including co-op and condo boards, are forbidden from inquiring about a job applicant’s criminal history until after they have made a provisional job offer. If an employer decides to withdraw a conditional job offer after examining the applicant’s criminal history, the employer is then required to give the applicant a written copy of the reasons the job offer was revoked. Acceptable grounds for revoking a job offer are if there’s a “direct relationship” between the criminal offense and the job’s requirements, or if the hiring would create a “reasonable risk” to property or personal safety.


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The law was not warmly welcomed by the co-op and condo community. “It has created a new protected class of people with prior criminal convictions, that’s what it’s done,” Neil Davidowitz, president of the management company Orsid New York told Habitat shortly after the law’s passage. “Tell me another city where ex-criminals become a protected class.”

The new bill seeking to protect apartment buyers and renters has drawn similar fire. “Many co-op boards do criminal background checks on potential purchasers,” says Geoffrey Mazel, a partner at the law firm Hankin & Mazel and legal counsel for the Presidents Co-op & Condo Council, a vocal advocacy group. “In the vast majority of cases, nothing is found. When something is found, it becomes a question of ‘Should we let this person into our co-op?’ Taking that tool away will change the application process for a lot of co-op boards. I think this bill goes way too far.”

Mazel notes that co-op boards now have broad power to reject purchase applicants for any reason or no reason – provided they’re not discriminating against a member of a protected class, which covers race, gender, sexual orientation, occupation and many other factors. Echoing Davidowitz, Mazel says, “People with a criminal conviction are not members of a protected class.”

The bill also raises questions of liability. Who will be responsible if a person who served time in prison for assault and battery is approved as a shareholder and then gets involved in a violent confrontation on the property? Will the co-op board, which was forbidden from investigating the shareholder’s criminal past, be held liable?

“If this bill becomes law, there needs to be some sort of indemnification,” Mazel says. “The board needs to be held harmless for any acts that person commits after becoming a shareholder.”

But Mazel and other co-op and condo advocates stress that they’re working to make sure the bill does not get signed into law. “It’s something we’re watching very closely,” Mazel says.

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