Caveat, Co-ops! Avoid Disparate Treatment of Unmarried Applicants

Question: When reviewing applications from prospective purchasers, can a co-op board treat a married couple differently from an unmarried one without running afoul of New York’s discrimination laws? Answer: Possibly.

While courts have been tackling the issue of discrimination based on marital-status in the context of rental apartments, university housing, and the workplace for years, there seems to be a dearth of case law involving co-op apartment buildings. Recently, however, a New York County Supreme Court case, Latoni v. Sherman Square Realty Corp., decided by the Honorable Emily Jane Goodman, may set the standard for such disputes.

In Latoni, the plaintiffs, Lisa Latoni and Andrew Jorgensen, were a heterosexual, cohabiting, unmarried couple who jointly signed a contract to purchase a cooperative apartment, and who had successfully procured a bank loan to purchase the unit. When it came time to secure board approval for the transaction, however, the couple was informed that only Latoni could purchase shares because individually, Jorgensen was financially unqualified.

In this case, the board treated applications from married couples as coming from a single economic unit, and often approved such applications—even when one spouse had no income at all and would not otherwise be financially qualified to purchase an apartment. But, when an unmarried couple submitted an application, the co-op treated the application as if it came from two disparate economic units. If the board determined that one of those individuals were financially qualified and the other was not, only the financially qualified individual was approved.

Thus, the question here is whether the co-op’s policy, which denied Jorgensen the opportunity to purchase the apartment jointly with Latoni, comprised a form of prohibited discrimination.

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