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Steps you can take to help protect your housing co-op from a lawsuit

Housing cooperatives have become increasingly popular in recent years, as more and more Americans decide that they’d rather live in a close-knit community alongside people with similar goals and priorities. While living in a housing co-op can be quite pleasant, operating one can be a significant challenge. Here are a few steps you can take while managing your co-op in order to reduce the chances of having to deal with a potentially costly lawsuit.

Avoid discrimination in membership

By their very nature, housing cooperatives are able to exercise a certain level of control over who qualifies to become a member of the cooperative and live within the cooperative’s housing units. However, there are certain characteristics that the federal government has prohibited landlords and housing cooperatives from using as justification for denying membership or housing.

The Fair Housing Act prohibits discrimination based on age, color, disability, familial status, marital status, national origin, race, religion or sex. Your cooperative is generally free to deny membership to applicants for any other reason, but doing so based on one of these protected characteristics can open you up to legal liability – unless your cooperative falls under one of the Act’s extremely specific exemptions.

Avoid discrimination in board member elections

Most housing cooperatives select their managing board members through an election by all cooperative members. Thus, every member of the cooperative generally has the opportunity to attempt to win election to the board if they desire it.

To avoid a discrimination lawsuit, do not limit who can run for election based on the above protected characteristics. This does not mean that you have to ensure that members of protected classes are guaranteed a place on the board. It merely means that it is a good idea to allow for the election to proceed freely without placing unnecessary restrictions on who can run.

No one wants to expose their cooperative to unnecessary risk. By being careful about your policies, you can help to insulate your cooperative against discrimination lawsuits.