Board Members Beware Protect Yourself from Discrimination Claims

As we enter the 21st Century, issues of equality continue to be a problem in the United States. As such, government has created a complex set of laws to protect people from discrimination, but the problem has still not gone away. The responsibility to treat prospective unit owners equally goes above the societal implications for board members and managing agents. If they are not careful to avoid acting in a way that might be viewed as discriminatory in a court of law, they risk lawsuits and severe legal penalties. It has been held that board members can be found personally liable under city, state and federal laws for discriminatory practices.

The New York City Human Rights Law prohibits discrimination on the basis of "actual or perceived race, color, national origin, sexual orientation, religion, disability, gender, marital status, alienage, citizenship status, age, lawful occupation, or because children may be, are, or will be in residence." Under this law, punitive damages of up to $100,000 may be awarded.

In addition to the city’s Human Rights Law, people claiming discrimination can sue under state and federal laws which utilize much the same language. The Federal Fair Housing Act protects from discrimination "on the basis of: race, color, national origin, sex, religion, familial status and handicap or disability." Violation of this law can result in a fine of $10,000 for a first-time offense, while compensatory damages may be as high as $300,000. New York State’s Human Rights Law names age and marital status as protected classes, in addition to those named by the Federal Fair Housing Act.

All of these laws state that people may not discriminate for any of the stated reasons by either refusing to rent or sell to a prospective buyer, by denying that housing is available, or by setting different terms or conditions for the sale or rental.

While compensatory damages may be covered by Directors’ and Officers’ insurance policies, punitive damages are not. It is therefore crucial that all apartment buildings take every effort possible to neither engage in discriminatory practices nor conduct their admissions processes in a way that could be construed as such.

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