New York's Cooperative and Condominium Community

Habitat Magazine July/August 2020 free digital issue

HABITAT

ARCHIVE ARTICLE

Things You Don’t Know

Mayor Bill de Blasio is concerned about harassment. On September 3 of last year, he signed three measures that are designed to protect rental tenants from harassment by their landlords, outlawing aggressive “buy-out” practices used to force tenants to vacate their apartments.

Good for de Blasio. Someone should stand up for the tenants. But I’m a little worried. What if some hotshot legislator, hoping to make a name for himself, pushes forward a bill aimed at protecting shareholders from “harassing” co-op boards?

It has happened. Every few years, the media latches onto a story that supposedly illustrates the “abusive” power of board directors, and, although I feel that this is largely a myth, their image is not helped by these stories. One appeared in Curbed not long ago about an Upper West Side co-op board that started requiring dogs in the building to take a DNA test to discover if they are made up of “more than 50 percent of something undesirable” (whatever that means). The story, meant as a quirky, amusing anecdote, instead became more fuel for the anti-board types, who think that boards have nothing better to do than to sit around and create useless rules and regulations to make the residents’ lives more difficult.

What many shareholders, unit-owners, and observers often don’t understand is the heavy responsibility – called its “fiduciary duty” – that every co-op board carries. In my building, for instance, we’ve been embroiled in a lawsuit with the commercial tenant for nearly two and a half years. On our attorney’s advice, we haven’t been able to say much to our shareholders about it, but in the meantime, many are grumbling, thinking the board is abusing its power, engaging in a “macho” battle with the commercial tenant.

“Why don’t you just settle it?” asked a former board member who knows the commercial tenant personally. “[The tenant] is just playing mind games with you,” he continued. “I could meet with him and get him to settle.” And how would he do that? I asked. “I’d just meet him one-on-one and say, ‘Stop this foolishness.’” Really? Why didn’t we think of that? How reassuring to know we have our own Donald Trump living in the building.

What the board had to deal with was a commercial tenant who owned rentals around the city and who was used to getting his own way. In fact, he’d been cited in one news report as having “a history of abuse and intimidation and is now stepping up his campaign to evict low-income tenants [so he can] increase rents by creating new vacancies to be re-offered at market rates.”

The board had various run-ins with him over the years, but his lease granted the board little real power over the commercial space. Matters came to a head about three years ago when the tenant renovated the smaller of the two commercial units without getting work permits from the Department of Buildings. He claimed he didn’t need them, yet he had moved a wall or two and was doing potentially dangerous electrical work.

Far from a “macho” battle, this was a fight that had to be started for the safety of the building. The board is charged with the care of the property, and to settle matters prematurely, without dealing with the potential hazards of illegal construction, would not only be wrong, it would be dangerous. And that’s something that no board can ignore.

So let’s not talk about “harassing” boards. “Harassed” boards is more like it.

 

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