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Predators vs. Privacy: When Residents Have Criminal Histories

By Adam Leitman Bailey


By Greg Olear
2015 December

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 [an attorney], a partner at [a law firm].

Venal vs. Cardinal Sins

If something pops up on one of these checks, then what? Ultimately, it depends on what the crime is—and not all crimes are created equal, at least in the eyes of a board. A charge of felony drug possession from 20 years ago may not be enough reason to turn down an otherwise fantastic buyer. A convicted murderer or sex offender is another story.
There are some convicted felons who would likely have zero problem with any co-op board in the city. The late baseball owner George Steinbrenner was  convicted of obstruction of justice related to illegal campaign contributions to Richard Nixon,  and was denied the right to vote for ten years until Ronald Reagan pardoned him; he had no trouble buying Manhattan real estate. Conversely, the board of the Dakota is not going to approve a sale of a unit to Mark David Chapman, even if he were paroled, won $500 million in Powerball and offered to pay six times the asking price. Chapman shot and killed Beatle’s musician John Lennon outside the apartment building in 1980.
But isn’t that discrimination? Yes, but according to Bailey, “It is absolutely legal to reject on the ground that the applicant is a convicted felon.”
[An attorney] agrees. “While discrimination in employment based on a person’s criminal record is illegal, refusing an applicant for housing based on a criminal record is not prohibited by federal, state or city law. Put another way, there are 13 grounds of unlawful housing discrimination; decisions based on a person’s criminal record is not one of those prohibited grounds.”
That said, the intersection of board discretion and a buyer’s history with the criminal justice system does raise concerns of social justice. Because the prison population is disproportionately people of color, discriminating against all felons, it could be argued, is inherently racist—and therefore illegal.
“Housing is vital to successful re-entry after incarceration,” says Paul N. Samuels, director and president of the Legal Action Center, a New York-based organization that advocates for the rights of those with criminal records. “Yet publicly funded and private housing is often unavailable to people with criminal records and their families. For example, landlords and public housing authorities have a great deal of leeway to keep people with drug convictions out” of co-ops and condos. “They can do this without considering other factors about the individuals who apply, such as character references and evidence of successful treatment.”
Now, if a board turns down a potential buyer because of a felony, said potential buyer could sue. But just because he or she sues does not mean he or she will prevail. In this sort of case, [an attorney] says, “The board would appear to have a good defense.”
The bottom line is this: would you, as a board member or non-board resident, feel safe with this prospective buyer as your neighbor? (Or, as Bailey puts it, “Would you want your nine month old baby living on the same floor as a convicted sex offender or murderer?”) If the answer—based purely on his or her criminal record, and not any other consideration covered by federal anti-discrimination law—is no, then the only prudent thing to do is turn him or her down.

Adam Leitman Bailey, P.C.

NEW YORK REAL ESTATE ATTORNEYS