Co-op boards in New York City have always been known for being especially particular when it comes to approving new residents. The approval process has been known to include long interviews by a co-op board and detailed background checks to ensure that the community inside a building is welcoming the “right” people.
Today, of course, there are far more federal, state and local anti-discrimination and fair housing laws than there used to be. So how can co-op boards still get away with rejecting so many potential residents?
Co-op boards can reject an applicant for any reason or no particular reason, as long as it doesn’t violate any fair housing laws. That’s much the same as employers in “at-will” states being able to terminate an employee for any or no reason as long as their actions are not discriminatory – for example, because of their race, gender, religion, disability or other protected class.
Laws are changing to require more transparency
Because co-op boards haven’t traditionally been required to document why they choose to reject an applicant, it has been difficult to successfully challenge a rejection on the grounds that it was illegal.
That has been changing slowly but surely in recent years as transparency rules have been enacted in some New York counties, including Westchester and Rockland, that require co-op boards to detail the reason(s) for their rejection of an applicant. Realtors’ associations as well as fair housing advocates have played a role in bringing transparency to the process that still remains shrouded in mystery to many.
There’s also currently a bill in the state legislature that would require all co-ops to “provide a prospective purchaser with a written statement of reasons when withholding consent to a purchase.” That information would have to be provided within 30 days after its decision is made.
At present, there are steps that people can take if they believe they’ve been denied housing in a co-op (or anywhere else) for discriminatory or other illegal reasons. They include filing a complaint with the appropriate government agency. There may also be grounds for a lawsuit. A good first step if someone believes they’ve been unlawfully denied the right to purchase a home is to get experienced legal guidance to protect their rights and make their case.