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Admittance Denied Understanding Co-op Admittance Rules

For many prospective co-op shareholders, finding the living space of their dreams is only half the goal. The other half involves making the cut before the co-op’s admittance committee, meeting all of the seemingly mysterious criteria that can mean the difference between a new home and a rejection letter.

The admittance process can be a tricky one, for both applicant and co-op. For example, in October 2006, John Walsh sued the board of a nine-story co-op building at 68 Beacon Street in Boston for denying him entry, alleging he was rejected because he was not a blue-blood patrician like the other members of the co-op.

The rags-to-riches Walsh, who became the CEO of the Elizabeth Grady cosmetics chain and is reportedly worth $100 million, went through a rigorous interview process with the 68 Beacon Street board and was subsequently sent a rejection letter stating in part that the board worried he wouldnot “reasonably coalesce as a member of the cooperative community.” After pricey and lengthy legal scuffling, 68 Beacon Street last year paid a $2.2 million settlement to Walsh.

Co-ops are Like Private Clubs

In many ways, this case embodies some of the conflicts and difficulties inherent in the co-op application process. In short, co-ops operate in many ways like a private club and are allowed by law to deny applicants entry into the co-op community for any reason that does not fall into a discriminatory category such as race, religion, sex or age, among others.

Richard Nixon, for example, was rejected from a co-op after resigning the presidency. He was not the only big name to get handed a rejection notice – Madonna, Gloria Vanderbilt and Calvin Klein all have suffered the same indignity. Problems arise when the board doing the rejecting and the person being rejected disagree on the real reasons at hand, as was the case with John Walsh and 68 Beacon Street.

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Comments

  • I would like to know if the following is constitutional. The condominium has been approved by the planning board, under the elderly housing zoning ordinance, on the basis that it shall be used as the primary residence for and by persons over the age of (55) and their spouses, and shall be used as such by the owners. A unit is being sold to a couple over 55 that have a 34 yr. old son who is handicapped. We were told that it would unconstitutional to reject the sale. Because of a previous court action?