In what may prove to be a significant victory for cooperative and condominium boards sued for housing discrimination, an appellate court recently applied the protection of the business judgment rule to a discrimination claim for disability accommodation.
In Pelton v. 77 Park Avenue Condominium, et al., the plaintiff—a unit owner suffering from muscular dystrophy—claimed that the condominium and the nine members of its board discriminated against him in violation of the New York City Human Rights Law. The plaintiff sought $23.5 million in damages, acknowledging that the condominium board agreed to some accommodations by purchasing a special wheelchair lift, providing special building access, granting exception to a house rule prohibiting in-unit laundry machines, and assessing $130,000 from unit owners for renovations to make the building handicap accessible. However, the board also denied requests for other structural modifications to building facilities and for reprioritization building-wide renovations.
The court determined that the board’s decisions concerning structural modifications throughout the condominium to accommodate Mr. Pelton was protected by the “deferential standard” of the business judgment rule (BCL), and therefore, the board’s decisions would not be subject to judicial scrutiny.
Discrimination Law Before Pelton
City, state, and federal anti-discrimination laws seek to shield individuals from housing related decisions that are motivated by animus towards a particular class of people, whether based on, race, creed, color, national origin, sex, sexual orientation, age, disability, and/or marital status. In addition, these laws also require cooperatives and condominiums to make “reasonable accommodations” for disabled residents upon request, so that they may use and enjoy the premises as their neighbors do.
“Reasonable accommodations” may include exceptions to rules, policies, services, or procedures—such as allowing a disabled resident to own a dog, despite a house rule prohibiting pets—as well as structural modifications to building facilities, such as wheelchair ramps or mechanical lifts. Accommodations must sometimes be made at the expense of the housing association when the claim is brought under the New York City Human Rights Law.