This time of year we attend a great deal of annual shareholder/member meetings for the co-op and condominium associations we represent. These annual meetings serve a dual function, first they allow the current board and the vendors who service the association such as the property management company, attorney and accountant to present their end of the year reports. Second these meetings are used as the venue to hold elections for the association’s board of directors. The board is typically comprised of unit owners. A board member typically serves on the board for a year until the next annual meeting. While it is a thankless but critically important role board members are not compensated for their service on the board. The intent of this article is to explain what the board does and how it carries out its responsibilities.
What is the Purpose of the Association's Board?
The board serves as the decision making body for the co-op or condominium association. While the day to day operations of the association are typically left to the property management company, it is the board who must weigh the options and vote on an array of issue that impact the short and long term operation of the association. Board members will decide when and how to implement capital improvements such as switching the building’s heating system from oil to gas, replacing the roof or installing security cameras. These decisions are typically made after the board reviews proposals from contractors competing on the proposed work. The board also regularly reviews the association’s financial status and decides if it is necessary to increase the common charges/maintenance or obtain financing.
In addition the board decides when to commence litigation against a party such as a delinquent owner who has fallen behind in the payment of their common charges/maintenance or against a person who is creating a nuisance for other residents.
Where Does the Board Get its Authority?
The powers granted to the board are found in the association’s by-laws. These by-laws are found in the offering plan of the association and are available to all shareholders/owners. The by-laws will list the requirements needed for the board to function such as the maximum number of people who can sit on the board, the titles and responsibilities of the officers on the board e.g. President, Vice President, Secretary and Treasurer and the requirements needed for a board to pass a resolution. Standard by-laws will state that if a quorum is present at any duly called for board meeting the vote of a majority of the member’s present is necessary for a resolution to be passed.
For example if a board has nine members they will need at least five present to obtain a quorum. If five board members are present and three of the five vote to repaint the building’s hallways then the resolution to repaint the hallways will pass. This is why attendance at every board meeting is critical.
Cooperative Housing Associations and Condominium Associations operate under two distinct areas of the law. Cooperative apartment ownership is not considered real property ownership but rather as ownership of shares in a corporation. Therefore Co-ops are treated like a for profit business in New York State and operate under the New York State Business Corporation Law commonly referred to as the BCL. Condominium units are considered real property and operate under the New York State Real Property Law Section 9-b Condominium Act. As your general counsel we ensure that your association is operating within the confines of all applicable laws, rules and regulations.
What Services Do You Offer As Our Association's Attorney?
When serving as general counsel to a cooperative or condominium association it is our responsibility to attend to all of the association’s legal needs and concerns. This may include; Reviewing contracts which the association is considering such as a contract to hire a new property management company or landscaper; Advising the board on the need to commence a lawsuit for the collection of unpaid association fees; Appearing in court on the association’s behalf; Representing the association when ECB/HPD or other municipal violations have been issued; Reviewing all documentation related to the association’s refinance of the property and attending the closing; acting as the transfer agent for the association when units are sold; Advising the board on the need to amend the by-laws, proprietary lease or house rules to address the association’s needs; Updating the board on changes in the law which will affect the operation of the association; Attending the association’s annual meeting to present our annual review and replying in a timely fashion to all inquiries from the board or management company.
As counsel to cooperative and condominium associations located in Manhattan, Queens, Brooklyn, Long Island and Westchester with a combined 800 dwelling units we are well aware of the legal needs of housing associations located in New York. Should you have any questions or if your association is looking to obtain legal counsel please feel free to contact Kevin O’Sullivan at (718) 713-3499. He is also available by email at: firstname.lastname@example.org
We look forward to speaking to you!