If boards don’t watch their words, those words can come back and bite them.
A Manhattan co-op was trying to get rid of a shareholder who was behind on his maintenance payments, engaging in unacceptable conduct, and otherwise flouting the proprietary lease. In a casual exchange of e-mails, one board member allowed that, should the offender move out of the building, “I would be interested in the apartment.”
Edward Braverman, the board’s attorney, didn’t see red. He saw purple. “That would have been a terrible e-mail to have subpoenaed,” says Braverman, senior partner at Braverman & Associates, who has been practicing co-op and condo law in the city for more than 40 years. “I don’t think the board member thought he was doing anything wrong. It was just a passing remark. The problem is that for many board people, e-mail has become so matter-of-fact.”
As the popularity of e-mail grows with co-op and condo boards, several lawyers are joining Braverman in warning that electronic communication has its legal limits and, in some cases, can become a crushing legal liability. There are many times – after discovering construction flaws, when firing a super, or when claiming a shareholder or unit-owner is guilty of objectionable conduct – that a building’s governing documents spell out that the interested parties have to be notified of such claims by certified mail. In these cases, the seductive convenience of e-mail is not an option.
“We’ve seen an increasing tendency among management companies to send communications by e-mail instead of following the proper notification process as specified in the offering plan or bylaws,” says Theresa Racht, a partner in the law firm Racht & Taffae. “Management companies and boards need to be alert to the fact that some communications cannot be done by e-mail. The problem is that e-mail has become such a major form of communication that people don’t stop to think that it doesn’t rise to the level of a formal legal notice.”
Many people also fail to realize that this sword has a second, paradoxical edge. While inadequate as a legal notice in certain matters, e-mail can become a damaging legal liability in others. “The problem with any written communication, including an e-mail, is that it’s ‘discoverable’ in a lawsuit, meaning the other side can get hold of it if they want to,” says Joseph Colbert, a partner in the law firm Kagan Lubic Lepper Lewis Gold & Colbert. “If you get in a lawsuit, somebody will find it if they look hard enough. People treat e-mail as an informal communication, but really it’s formal. It’s actually more dangerous than a letter because in most cases a copy can be found. People still don’t get this.”
Colbert, who has taught at St. John’s University’s law school and has conducted numerous seminars on the legal ramifications of electronic communication, stresses that there’s nothing innately wrong with e-mail, text messages, and instant messaging provided they’re used with caution. The problem, Colbert and others agree, is that the speed and convenience of electronic communication tend to erase any sense of caution.
Colbert says e-mail can be a safe and effective way for board members to disseminate routine information among themselves, keep their professionals up-to-date, and circulate notice of an upcoming meeting. E-mail should not be used for admission discussions, employment decisions, or as a substitute for a formal meeting or an official vote on an issue. (Board meetings can be conducted via conference telephone calls, unless restricted by the certification of incorporation or the bylaws.)
Microsoft, Merrill Lynch, and Enron are just a few of the corporate giants that have had damaging e-mails come back to bite them. While it’s unlikely your co-op or condo will get itself into that level of legal hot water, Colbert nonetheless advises board members against sending e-mails about board business on their employer’s internet service. “A lawyer can go after that corporate e-mail,” Colbert says, “and it’s easy for someone to take it and send it to the world.”
Colbert has distilled his years of experience as a litigator into a simple, iron-clad mantra: “Anything you don’t want someone else to read, don’t discuss it by e-mail. If you wouldn’t be comfortable writing it in a letter, don’t send it in an e-mail. Think of e-mail as a recorded conversation.”
Ron Sher, a partner at Himmelfarb & Sher, has developed a mantra of his own: “Before sending an e-mail, use discretion and think twice. And do not hit the ‘Reply All’ button! Everybody has done that.”
James Samson, a partner at Samson Fink & Dubow, and a self-proclaimed graduate of the old school, goes a step farther. “I don’t think board people should send e-mails,” he says flatly. “Once you push the ‘Send’ button, it’s in the public domain. That’s why litigators hate e-mail. Besides, they sound harder. It’s a hard medium. You don’t get the inflections and nuances you pick up from the human voice.”
Steve Greenbaum, director of property management at Mark Greenberg Real Estate and the recipient of more than 200 e-mails per day, agrees with this last point. “Intonations are not there, nuance is missing in an e-mail,” Greenbaum says. “And some people get what I call ‘e-mail courage,’ meaning they say things in an e-mail that they wouldn’t say anywhere else.”
And, perhaps worse, they expect an immediate reply. “The other downside,” Greenbaum adds, “is that people think it’s all right to e-mail me at all hours of the day and night – then they expect me to respond first thing in the morning. Not everybody has a Blackberry.”
For all its speed and convenience, Greenbaum believes electronic com-munication lacks something critical. “Opening that certified letter has so much more impact than reading an e-mail,” he says. “I understand why governing documents require it. It’s much more dramatic.”
Adds Racht, the attorney: “Boards and managing agents need to stop and rethink what’s appropriate for e-mail and what’s not. We’ve all gotten so comfortable with e-mail that this could turn into a very serious problem.”