Legal Question in Real Estate Law in California
CO-OP Discrimination
I am interested in purchasing a unit in a co-op. The broker advised me that I must appear before the Board of Directors and obtain their approval before being allowed to purchase. I was also informed that the Board of Directors could deny any prospective buyer the right to purchase a unit in a co-op without justification for any or no reason. Does the Board of Directors of a co-op have the right to bar a person from purchasing and, if so, on what grounds?
1 Answer from Attorneys
Re: CO-OP Discrimination
California law prohibits most forms of discrimination. See, for example, the Unruh Civil Rights Act, sections 51 through 51.12, especially 51.5, at your county law library.
A co-op board can interview and screen prospective purchasers, although some do not, and can probably withhold approval of a sale for a valid reason. The following are NOT valid reasons: race, creed, religion, color, national origin, sex or disability. Discrimination based on age, sexual preference, poverty or mental capacity is a somewhat grey area.
In addition to anti-discrimination law, very old theories of property owners' rights say that unreasonable restraints on an owner's right to transfer or sell his/her property are against public policy and therefore void. This concept would require the co-op board to act reasonably in approving or denying sales by willing sellers to willing buyers.
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