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A New York federal court has approved a consent decree between the federal government ("Government"), Barbara King ("King"), and the Westwater Commons Corporation ("Co-op") for the Co-op's alleged violations of the federal Fair Housing Act for denying King's purchase application because she had children living with her who were under 18 years old.
In 1998, King entered into an agreement to buy a unit in the Co-op. A co-op building is usually structured as a corporation where each shareholder receives shares which entitle them to an exclusive lease for a particular unit, and so a conveyance of an interest in a co-op typically involves a transfer of stock. As part of the Co-op's Board of Directors ("Board") approval process for a new member, King was required to submit an application to the Board listing all individuals who would reside in the unit. If the list included children, then the applicant was also required to list the number and ages of the children.
Following the receipt of her application in 1999, the Board requested an interview with King and her 14 year-old son (she also had a 4 year-old daughter). King's proposed unit was directly above Margaret Sharper's unit, who was a member of the Board. Approximately a week after the interview, King's application was rejected by the Board, even though she was financially qualified to purchase and maintain the unit. Statements taken by the Government allegedly revealed that Sharper had opposed King's application during the Board's deliberation because King had two children. The president of the Board also allegedly informed the Government that King was not treated fairly because of her children. Approximately a year after King's application was rejected, the Board approved an application of an individual for the same unit who had no children.
In June 1999, King filed a complaint with the United States Department of Housing and Urban Development ("HUD") that alleged that the Co-op had engaged in housing discrimination because of the Kings' familial status. HUD investigated King's allegations, and unsuccessfully attempted to resolve the dispute. Based on its investigation, HUD's Secretary determined that there was reasonable cause to believe the Co-op had engaged in a discriminatory housing practice. The Secretary issued a "Charge of Discrimination" notice which stated that the Co-op had discriminated against the Kings based on their familial status, in violation of the federal Fair Housing Act ("Act").
The Act is intended to eliminate from the housing marketplace discrimination against protected classes, including discrimination in the "sale or rental" of property based on familial status. "Familial status" is defined as "one or more individuals (who have not attained the age of 18 years) being domiciled with...a parent." The Act allows the Government to bring a lawsuit to enforce the Act, so long as the Government demonstrates that the person or group "engaged in a pattern or practice of resistance to the full enjoyment of any of the rights" granted in the Act.
Pursuant to the Secretary's charges, King elected to pursue civil remedies against the Co-op, instead of a HUD administrative procedure. The Secretary authorized the Attorney General to pursue the charges, and so a lawsuit was filed by the Government and King against the Co-op. Thereafter, the Co-op entered into a settlement with King and the Government.
The United State District Court, Southern District of New York, approved the consent decree between the parties, settling the lawsuit. Pursuant to the consent decree, the Co-op agreed to pay King $102,000.00 in damages. The Co-op also agreed to the entry of an injunction prohibiting it from engaging in further familial discrimination. The consent decree also imposed additional requirements upon the Co-op, including the requirement that the Co-op to deliver an affidavit to the Government every year for the next three years stating that it is in compliance with the consent decree.
United States of America v. Westwater Commons Corp., 02 Civ. 5241 (WCC), Consent Decree (S.D.N.Y. filed Nov. 25, 2002). [Note: This opinion was not published in an official reporter and therefore should not be cited as authority. Please consult counsel before relying on this opinion.]
Editor's Note: NAR Legal Affairs would like to thank Preston Leigh, REALTOR®, of RE/MAX Prime Properties in Scarsdale, New York, for alerting us to this decision.