Admissions: How to be Discriminating without Discriminating
It is perfectly legal for a board to be discriminating in who it allows into the building. Boards can reject applicants for financial reasons, for instance, and base that decision on income and credit checks. The rationale is that successful applicants must be able to pay their monthly maintenance charges, special assessments, and mortgage payments. No board wants to accept a buyer who could soon be in default. The challenge is being able to walk the fine line between protecting the financial and social stability of the co-op and treating prospective buyers fairly.
There are typical groups associated with "legal discrimination":
• Entertainers and celebrities, often rejected for membership out of fear for the notoriety they can bring
• Political figures and diplomats, for similar reasons, as well as the fear of terrorist violence
• Attorneys, for their tendency to pursue litigation and find legal loopholes to avoid maintenance charges
• Applicants who have moved frequently, because in the event of another move, the purchase may turn into a sublet
A board can reject these and other applicants for any reason permissible under the law.
When rejecting someone for legally valid reasons, the only caveat is that the board needs to be consistent. If someone is singled out for treatment that is different from another person interviewed, there is a definite chance for litigation. The challenge is being able to walk the fine line between protecting the financial and social stability of the co-op and treating prospective buyers fairly.
To do that, a well-run board will generally have a formal admissions process in place. That usually begins with the application package. Applications, as well as their development and filing procedure, are generally up to the individual boards. Most applications request the
• Name
• Residential history
• Employment and bank history/references
• Personal references
• Financial information, including assets, debts and credit histories
• Hobbies and interests
• Interest in board or committee service
• Data on the person or persons who will live in the unit
One of the fundamental points to remember is that the application process should be split into several parts, the last being the interview. Do not interview someone unless you are sure you’re going to accept. Once you’ve met, you then know his or her race, physical infirmities and approximate age. If you then choose to reject and you know that they’re in a wheelchair, for example, those can be grounds for a discrimination lawsuit.
Because of that, the application package becomes a very important tool in determining whether you accept or reject.
Adapted from Habitat March 2009. For the complete article and more, join our Archive >>