Understanding Discrimination Laws in Co-Ops and Condos: Safeguarding Boards and Residents

​​It’s something that can give you the night sweats — the prospect of getting dragged before the city’s Commission on Human Rights for discriminating against a member of a protected class. At co-ops and condos, discrimination claims often arise after a board rejects a prospective purchaser. Steering clear of trouble requires knowing the law inside and out.

PROTECTED CLASSES  Board members, especially newer and less experienced ones, often don’t grasp just how protective discrimination laws are. Boards may understand that you can’t approve applications based on race, religion, age or sexual orientation, but they may not realize that interviewing potential purchasers in person and then rejecting them after a face-to-face meeting leaves them open to discrimination claims.

Even when doing phone interviews, it’s so easy to say the wrong thing if you don’t know the rules. You’re only allowed to ask questions about someone’s assets, but not their job or how much they make, because the source and amount of someone’s income is protected by law. 

ON THE RECORD  If you ask something you shouldn’t, the applicant can file a discrimination complaint with the NYC Commission on Human Rights, New York’s Division of Human Rights, the State Supreme Court or federal court. I should add that New York is a one-party consent state, which means that only one party must consent to the recording of an in-person or telephone conversation. If an applicant does that, they have evidence to corroborate their claim. And if it's determined there was indeed discrimination, they can claim they suffered emotional distress and that they lost money by having to buy a more expensive place and receive a money judgment from the board.  

INSURANCE COVERAGE  Even worse, when someone sues a board for discrimination, you name all the board members and each one is personally liable, which means they can go after your personal assets. Directors and officers insurance won’t protect you unless your building pays extra for an added discrimination endorsement in your policy that will cover you if you’re sued. At a larger building, say, with 300 units, you’d be crazy not to have it. But if you have only six apartments, it probably doesn’t make much financial sense. The takeaway here? You have to understand how nuanced people’s rights are when it comes to discrimination, and watch everything you say and do.