Several months ago, I wrote an article for this column detailing the circumstances under which a cooperative

board could legally discriminate against those wishing permission to either occupy or purchase the stock and lease of a cooperative apartment (Boards Beware: Steer Clear of Discrimination, September 1994). That article explained that so long as a board did not engage in prohibited discrimination, its acts would be protected under the Court of Appeals' ruling in Matter of Levandusky v. One Fifth Avenue Apartment Corp., a case which insulated board members from liability for the consequences of good faith decisions made in the context of carrying out their elected responsibilities.

In recent years, however, there have been significant developments in one area of discrimination which has become increasingly troublesome for boards, namely, discrimination based upon real or perceived sexual orientation and/or marital status. In this rapidly evolving area of the law, co-ops frequently struggle with how to decide the occupancy or inheritance rights of individuals, often characterized as live-in lovers, who want to be treated as the equivalent of married spouses or blood-related family members.

In 1989 the Court of Appeals, in what has come to be known as the Braschi case, awarded rent controlled succession rights to a gay roommate who claimed and demonstrated domestic partner status. Later, amendments to the Rent Stabilization Law and Code echoed this change. Typical proprietary leases and House Rules, however, have been woefully inadequate to deal with these issues and often have not kept pace with the flurry of court and legislative activity in this area.

Traditionally, most co-op proprietary leases written prior to the court decisions and legislative and administrative changes mentioned above, restricted occupancy of a co-op unit to the shareholder and his or her immediate family members, usually including a spouse, children and other blood relatives. A typical use provision in such a proprietary lease would have read:

The Lessee shall not, without the written consent of the Lessor on such conditions as Lessor may prescribe, occupy or use the apartment or permit the same or any part thereof to be occupied or used for any purpose other than as a private dwelling for the Lessee and Lessee's spouse, their children, grandchildren, parents, grandM-parents. brothers and sisters...

Such lease provisions considered individuals who didn't qualify as family members to be guests who, under the same types of use clauses, could not occupy the apartment at all unless the shareholder lived there with them and, even then, for a period of no more than 30 days, without the occupancy being deemed an illegal subletting of the apartment.

When a shareholder wished to co-occupy his or her apartment with an unmarried lover on a long-term basis, the traditional restrictions imposed in proprietary leases, mostly placed years ago, were no match for the situation. This same dichotomy between blood or formal spousal relationships on the one hand, and long-term but informal relationships on the other, permeated the inheritance provisions of proprietary leases as well.

Thus, typical assignment provisions of older proprietary leases required board approval, which could be withheld in the board's unilateral discretion except that:

...i ffb f the Lessee shall die, consent shall not be unreasonably withheld to an assignment of the lease and shares to a financially responsible member of the Lessee's family other than the Lessee's spouse as to whom no consent is required.

Recent Settlement Gives Rights to Live-In Partner

As a result of these problems, a number of cases have been brought both in court and before relevant administrative agencies, in which unmarried couples, often gays or lesbians, denied the right to co-occupy or inherit an apartment on the same terms as married couples, demanded to be treated as a spouse or as the domestic partner of the shareholder for purposes of co-op proprietary leases, rules and regulations. Recently, a settlement of such a complaint, brought before the City's Human Rights Commission, was made which has important implications for what willor will notbe considered acceptable co-op treatment of this issue.

In that complaint, a Sutton Place co-op agreed to convey an apartment to the surviving companion of an individual who died of AIDS while suing to force the co-op to allow him to inherit the apartment he shared with the unit's original owner, who had died previously. Under the terms of the settlement, the co-op agreed to allow the surviving companion of the complaining party, himself the surviving companion of the apartment's owner, to inherit the apartment on the same terms as if he were the apartment owner's spouse. The co-op further agreed to see to it that its proprietary lease provision governing inheritance of apartment shares and leases be modified to explicitly treat domestic partners as spouses.

Although this was a settlement, and not a binding case precedent, how should boards act if the situation presents itself to them? First and foremost, it is apparent that, with changing times and mores, the language of traditional proprietary lease clauses restricting occupancy rights to shareholders and their immediate family offers little more than an incomplete solution and must be modified to the degree that they are no longer in conformity with existing law. This, of course, must be accomplished by following the co-op's procedures for modification of the proprietary lease agreement.