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

It's Not Easy to Prove That a Co-op Board Discriminated

New York City

Co-op boards, purchase applications, reasons for rejections, discrimination.
Sept. 7, 2021

A couple recently submitted an application to buy into a co-op in Dumbo, Brooklyn. Despite solid financials and a sterling board package, the co-op board rejected the application. The couple's broker speculated that the reason was the couple's dogs, even though the building is said to be pet friendly. The applicants have a different theory. The day before the rejection, they were asked to submit a family photo to the board – which revealed that one member of the couple is a person of color and, for good measure, has multiple tattoos. What recourse does an applicant have when faced with possible discrimination?

A co-op board in New York City can reject a purchase applicant for any reason or no reason – so long as the reason is not discriminatory or an act of self-dealing on the part of a board member, replies the Ask Real Estate column in The New York Times. Since the board is not required to disclose why it rejected an application, the applicant will be hard pressed to show that the decision violated fair housing rules.

“Discrimination is hard to prove — not impossible, but difficult to prove — unless you have witnesses willing to testify or some sort of documentary evidence,” says Steven Sladkus, a partner at the law firm Schwartz Sladkus Reich Greenberg Atlas.

Here are steps for people who feel they've been victims of discrimination: Start by filing a complaint with the New York City Commission on Human Rights, as housing discrimination is covered by the city’s human rights law. You could also file a complaint with the state Division of Human Rights. Both agencies would investigate your claim, and you could be awarded damages. Your next step would be to call a lawyer and file a lawsuit on your own. The board would be required to disclose its reasoning in the suit, and if you won, you could be awarded damages. However, litigation is long and expensive, with no clear path to victory.

The good news for purchasers and the bad news for co-op boards is that change may be on the horizon. Westchester County recently passed a law – similar to one already in place in Nassau County – that requires co-ops to disclose their reasoning for rejecting buyers, and to file the information with the county Human Rights Commission. Boards also must explain minimum financial requirements to prospective buyers. The state Senate is considering similar statewide legislation, with a bill in committee that would mandate “a uniform processes for considering applications” and set limits for how long a board can take to consider an application.

For now, though, New York City co-op boards have the upper hand. Under current rules, rejected applicants will have a hard time proving discrimination, and many conclude that the high cost is not worth the risk.

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