Co-op's Refusal of Guarantor May Violate Law

A disabled person who reached the top of a waiting list for subsidized Mitchell-Lama cooperative housing was rejected by the co-op because he didn't have sufficient funds to buy the apartment. The buyer sued the co-op and asked the court for an injunction forcing the co-op to accept his guarantor. The buyer's doctor and long-time friend had agreed to be the guarantor for payment and had put aside funds for the buyer's purchase of the apartment. But the co-op refused to accept the guarantor because he lived outside the "community." The co-op argued that it was entitled to act under the business judgment rule. The DHCR also had already ruled in the co-op's favor. The court ruled for tenant in part. The court couldn't simply grant an injunction for the buyer. But the co-op defined "community" to mean someone who already lived in the building, although it showed nothing in writing to support this policy. And the DHCR ruled only that there was no discrimination against the buyer on the basis of his disability. The court ruled, on its own, that it would consider whether the co-op violated a new amendment to the New York City Human Rights Law that barred discrimination based on "any lawful source of income."

Hirsch v. Park Reservoir Housing Corp.: NYLJ, 5/7/08, p. 30, col. 1 (Sup. Ct. NY; Goodman, J)