“Polly Want A Windfall?”: U.S. Department of Justice Slams NYC Co-Op for Denying Three Emotional Support Parrots, Imposing $165,000 in Damages

Co-op and condo boards have a legal obligation to provide reasonable accommodations to residents with disabilities. Residents often request permission to live with their so-called emotional support or therapy animals (“ESAs”) in buildings that prohibit or restrict pets. 

In addressing ESA requests, boards frequently face a Catch-22: on the one hand, imposing significant restrictions that discourage residents from submitting accommodation requests may invite a complaint to a civil rights agency or lawsuit; on the other hand, permissively granting these requests without establishing sufficient guardrails or consistent protocols may lead to neighbor complaints over noise, animal dander, damage to common areas, safety-related concerns, and other issues. 

A recent federal lawsuit against a Manhattan co-op commenced by the U.S. Attorney’s Office, U.S. v. Rutherford Tenants Corp., and the resulting public settlement of that lawsuit, which includes substantial monetary penalties and policy and protocol changes, serve as an important reminder of how ESA-related disputes can go terribly awry for co-ops and condos.  

The Facts

A shareholder of Rutherford Tenants Corp., a co-op in Manhattan, kept two parrots as ESAs to alleviate her anxiety and depression for her entire tenancy at the building. After fifteen years, she adopted a third parrot and, shortly thereafter, the co-op received numerous noise complaints. What followed were fifteen mostly unannounced inspections from the NYC Air and Noise Enforcement Division, as well as an unannounced inspection by the NYC Department of Health and Mental Hygiene, all within a five-month span. While none of these agency inspections resulted in violations, the co-op moved to evict the shareholder anyway. 

An eight-year legal dispute ensued that included the shareholder filing a complaint with, and a resulting investigation by, the federal Department of Housing and Urban Development (HUD). That agency ultimately found “reasonable cause” to believe the co-op discriminated against the shareholder on the basis of her disability and retaliated against her for requesting an accommodation by, among other things, charging her for more than $70,000 in legal fees incurred by the co-op and unreasonably withholding consent for her to sell her shares in the co-op. The case then moved to federal court, where it was resolved via a consent decree (i.e., a public settlement).

The Settlement

Under the settlement reached between the co-op and U.S. Department of Justice, the co-op must pay the shareholder an astounding $165,000 in damages and offer to purchase her shares in the co-op for an additional $585,000. If the shareholder elects not to sell her shares to the co-op, then the co-op must permit the shareholder to sublease the apartment without charging her a sublease fee and, if the shareholder elects to sell to a third-party, then the co-op cannot unreasonably deny approval of the sale, cannot charge a transfer fee or “flip tax,” and must pay the shareholder’s broker’s fee. In addition, pursuant to the settlement, the co-op also must do the following: 

• Adopt and implement a reasonable accommodation policy that requires the co-op to provide detailed explanations for all denials of requests and that cannot be changed without the approval of the U.S. Department of Justice;
• Provide training to new employees regarding the handling of reasonable accommodation requests;
• Inform each resident of the co-op of the new reasonable accommodation policy in writing; and 
• Provide detailed, quarterly reporting to the U.S. Department of Justice for the next 5 years as to disability accommodation requests and their handling by the board, as well as any kind of discrimination or fair housing complaints directed at the co-op. 

Takeaways 

The emergence of assistance animal “registries” (often obtainable online for a fee) and other questionable support for these ESA requests, as well as news stories over exotic and other over-the-top animals in housing and public spaces, have led to a public perception that many ESA requests are simply a fraudulent end-run around pet restrictions. While there may be legitimate policy criticisms regarding the permissiveness of the current framework and potential for abuse, boards need to separate these criticisms from their legal obligations and duties to residents in co-ops and condos.

To that end, boards must take accommodation requests seriously, engage in a good faith, cooperative dialogue with individuals requesting ESAs, make appropriate inquiries directed at the disability-related need for ESAs, and otherwise engage in a consistent process for handling these requests. And, no matter how outlandish or over-the-top the request may seem, boards should not, under any circumstances, pre-judge an accommodation request. Engaging in a cooperative dialogue over a request for an accommodation is a legal mandate in New York City. Co-op and condo boards also should be careful not to take actions that could be perceived as retaliatory against individuals making requests. The costs of litigation and potential agency penalties, as exemplified by the Rutherford Tenants Corp. case, are a stark reminder that boards should consult with qualified legal counsel and endeavor in good faith to amicably resolve ESA-related disputes with residents, since the burden, expense, and potential exposure of defending agency complaints and litigation can be quite hefty.