Page 5 - NJ Cooperator Winter 2020

NJCOOPERATOR.COM THE NEW JERSEY COOPERATOR — WINTER 2020 5 QUESTIONS & ANSWERS Legal Q A& Interview Rules Q I am a new resident of a co-op building in New Jersey and un- aware of the rules, regulations, and state laws pertaining to applicants. I now fi nd myself on the co-op interview committee, and have been told that it is no longer legal to interview applicants. I actu- ally have several questions: Is it true that co-op applicants cannot be interviewed in person? Is it legal to inquire or investigate if an applicant has a criminal record? If they do, is it legal to reject them because of that? Further, does the answer to the previous question change at all if an applicant is a registered sex off ender? —Needing Answers I Cannot Find On- line A “Th e exact answer to your question depends on the provisions of your coopera- tive’s governing documents, and you should seek guidance from your attorneys,” states attorney Matthew Z. Earle, partner in the fi nancial standards. Hackensack law fi rm Kates, Nussman, Ellis, Farhi & Earle, LLP. “However, as a general prietary lease does not limit rejections to fi - proposition, nearly all cooperative propri- etary leases require the consent of the board of counsel with regard to rejecting appli- of directors for the transfer of shares and cants for non-fi nancial reasons, and make may make the committee aware of the ap- assignment of lease, usually aft er a recom- mendation by the ‘admissions committee.’ afoul of the New Jersey Law Against Dis- In addition, virtually all proprietary leases crimination or other statutory protections. state that, ‘Th e board may not withhold con- sent except for the failure of the proposed inal record and/or sex off ender registration, garding fi nancial issues or to introduce the assignee to meet the fi nancial requirements there is no reason to make such inquiries, potential new shareholder to the various established by the board of directors.’ Th is since you probably cannot act on the in- language is in most proprietary leases be- cause it was required by the Department of eratives do run a landlord-style ‘consumer Community Aff airs (DCA) as a condition report’ check that may reveal criminal re- to approve the developer’s off ering plan. “What this means is that a board should tion due in whole or in part to information establish, by written resolution adopted at a contained in a ‘consumer report,’ such as meeting open to attendance by sharehold- ers, fi nancial standards for admission. As must comply with the Fair Credit Reporting per the express terms of most proprietary Act, including provisions relative to adverse leases, an applicant cannot be rejected due action notices. to a criminal record, or because he or she is a registered sex off ender. Instead, applicants plicants. However, some cooperatives have can only be rejected for failing to meet the stopped interviewing applicants because: “In the event that your cooperative’s pro- nancial criteria, you should seek the advice theoretically increase the cooperative’s ex- sure that any such rejection does not run plicant’s status as a member of a protected “With respect to inquiring about a crim- formation obtained. However, many coop- cords. Note that if you reject an applica- a background check or credit check, you “Finally, it is not illegal to interview ap- (1) the only criteria for admissions are the fi nancial records submitted by the appli- cant; and, (2) the interview process may posure to a discrimination claim because it class (e.g., race, national origin, religion, etc.). Many cooperatives, however, still con- duct interviews to ask for clarifi cations re- facets of cooperative living.” Radburn on Term Limits Q Does the Radburn Law make it impossible to have term limits for our board? —Owners Concerned about Abuse of Power continued on page 27