Peter Massa, Partner, Armstrong Teasdale, is interviewed by Habitat Magazine's Bill Morris. A legal landmark. The business judgment rule has been around in corporate law for a long time. The theory is that board decisions will not be second-guessed by the courts — provided they’re made in furtherance of the corporation's legitimate interest and in accordance with the recommendation of the corporation’s professionals and the governing documents.It’s not failsafe. The caveat here is you...

Leni Morrison Cummins, Partner, Cozen O’Connor, is interviewed by Habitat Magazine's Carol Ott. It all starts when sponsors decide how they’re going to allocate expenses between the residential and commercial portions of the building. Real Property Law 339M gives sponsors the ability to allocate expenses based on something other than a percentage of common interest. When a sponsor is looking to market their building, they want to keep the allocation of expenses for the commercial units down....

Benjamin Flavin, Partner, Braverman Greenspun, is interviewed by Habitat Magazine's Carol Ott. Lessons for Co-op & Condo Board Directors The benefits. HDFC co-ops were created to provide affordable housing for people who may not otherwise be able to enter the New York City real estate market. There are also certain tax benefits that lower the cost of owning an HDFC apartment.The regulatory agreement. Most modern HDFCs have a regulatory agreement with New York City that outlines the...

Lessons for co-op and condo board directors Evan Richman, Partner, Fleischner Potash is interviewed by Habitat Magazine's Carol Ott. What happened. In 2021 there was a disputed board election between two slates of candidates at a Port Chester condominium.  Right before the election, the board issued a notice to all residents in the building letting them know that this meeting was going to be held virtually. It stipulated a new requirement that in order to vote in the election, each resident...

Christopher M. Tumulty, Partner, Fox Rothschild, is interviewed by Habitat Magazine's Bill Morris. Lessons for Co-op & Condo Board Directors First line of defense. Boards need a first line of defense when shareholders or unit-owners want to renovate or combine apartments. The best way to do that is to have an alteration agreement in place before the work starts. This is important because the board has fiduciary obligations to make sure the building is operated in a safe and effective...

Dean Roberts, Member, Norris McLaughlin, is interviewed by Habitat magazine’s Carol Ott. Lessons for Co-op & Condo Board Directors Duty to maintain confidentiality. If a board member is disclosing confidential information about a shareholder and that causes some harm or damage, in theory, the board has exposure because it failed to do its duty to maintain confidentiality. Or say two directors go home after a board meeting where shareholder litigation was discussed. The directors are...

Stewart Wurtzel, partner, Tane Waterman & Wurtzel, is interviewed by Habitat magazine’s Bill Morris. Lessons for co-op/condo board directors: Fat fees. If you’re thinking about going to court, don’t base the decision on whether you're going to recover legal fees, because even if you’re entitled, there are a lot of questions. The fight over legal fees often can overtake the underlying dispute, because sometimes it’s a much bigger number. When winners lose. There was a case where a condo...

Justin Buchel, partner, Schneider Buchel, is interviewed by Habitat magazine’s Paula Chin. Lesson for co-op/condo board directors: Burning issue:  A unit-owner at a condo had a fire pit on the balcony, and people were up in arms — and scared — because there had been a recent fire at the condo. The board started legal action, but the unit-owner pushed back, saying fire pits weren’t banned in the governing documents. A cease-and-desist notice was sent explaining that the fire pit was a ...

Andrew Brucker, partner, Armstrong Teasdale, is interviewed by Habitat Magazine’s Carol Ott. Board lessons to learn: For minor changes. If it’s just an amendment, send out a short one- or two-page replication of what was changed, and say, “Please staple this to your proprietary lease.” You have to do this because if you ever end up taking a shareholder to court for violating this change, a judge is going to say, “But they never got a copy.” When the change is big. We create a brand new lease...

Steven Sladkus, partner, Schwartz Sladkus Reich Greenberg Atlas, is interviewed by Habitat Magazine's Carol Ott. Board lessons to learn: Get involved.  If there are complaints being made by neighbors, the board has a fiduciary duty to all shareholders to make sure they can peaceably enjoy their apartments. So when a dog is barking and it's bothering the use and occupancy of the apartments of the people next door, the board should get involved.The first step. Take a conciliatory approach....