While the invasive board approval process in many co-ops would likely make it very difficult for a prospective buyer with a criminal background to purchase an apartment in a given building, that doesn't mean that residents who've done bad things can't or don't live in co-ops. The less powerful boards in condos may find themselves in the position of either voting to approve a purchase by such a buyer, or having to exercise their right of first refusal and purchase the unit themselves. Or perhaps the individual's misdeeds were committed after they bought into the building. Maybe it's the spouse or child of an owner or buyer who's run afoul of the law at some point. Rarely are such matters as cut-and-dried as they seem at first blush.
Let’s take a look at how boards can achieve the delicate balance between resident safety and privacy.
Get the Facts
Board members may decline to bring up the matter of criminal history during an interview with a potential buyer out of propriety. The thinking goes that much like sex, religion, and politics, peoples' rap sheets are not suitable topics in such situations. But this is not strictly true. Not only should boards ask about a prospective buyer's criminal history, but not doing so could expose them to claims of negligence down the line if the worst happens. “The safety needs of owners in a co-op or condo come before any ethical issues with a prospective buyer or tenant who has been convicted of a serious crime,” says Attorney Adam Leitman Bailey, founding partner of the law firm of Adam Leitman Bailey, P.C. in Manhattan.
Simply put, it is the fiduciary responsibility of the board to get all the facts about a prospective resident—especially if said prospective resident did hard time for something egregious, like sexual assault. Boards must protect the investment made by the building’s existing unit owners. And there is a bottom-line component to this. “Most owners of either a co-op or a condo are concerned about the value of their property going down,” Bailey says—which it could if known as a safe harbor for convicted sex offenders. “So in addition to the safety of the people in the building, there is a financial stake involved as well.”
Fortunately, finding out about criminal records is not difficult—and is often a compulsory part of due diligence. “Most boards do a criminal background and sex offender registry check on all proposed purchasers and occupants,” says Aaron Shmulewitz, a partner at the Manhattan law firm of Belkin Burden Wenig & Goldman, LLP.