New York's Cooperative and Condominium Community

Habitat Magazine Business of Management 2021

HABITAT

ARCHIVE ARTICLE

Picking and Choosing Your Battles

“I did a kitchen renovation this fall with all the proper procedures,” writes one co-op shareholder in “Board Talk,” Habitat’s online site. “We did a last-minute change to [install] a range hood, which vents through the window... We didn’t put it in the plan submitted to the management since it is a last-minute change and… there are multiple units... in my co-op [with] the same thing. We got a notice… from the management company stating it is a violation of the building code/co-op policy that no ventilation should be done within 10 feet of any windows. They state they will contact the co-op attorney if I fail to remove the vent… [My neighbors] have no problem with my installation… [Does] the management company have a legitimate case against me, or they are just enforcing their policy selectively?”

The answers to those two questions actually aren’t mutually exclusive. Leaving aside that it’s ultimately the board and not the management company that makes policy, a board can have a legitimate case against you and enforce policy selectively.

“There is existing case law that says boards can pick and choose the battles they wish to fight,” says Robert L. Gordon, an attorney in private practice who handles co-ops and condos. “You have to treat all shareholders alike, but it doesn’t mean you have to sue all the shareholders [in violation] at the same time. If there are three people in the co-op doing the same [illegal action], the co-op can just pick one and go after that one and make an example out of them.”

In this situation, the shareholder should have informed the board about the alteration. “Clearly, if you’re going to make structural changes to what had been approved, you’re going to have to go back to the board for as signoff,” Gordon notes. “Almost every building requires that alterations be approved by the board,” with apartment-owners typically providing a package with blueprints, proof of insurance coverage, and other things. “If the board approves a certain plan and you change that plan, you’re violating the rules,” Gordon says, arguing that with anything major, anything significant, you’re going to want to let the board know of that change in circumstances.

Gordon notes a similarity to the landmark Business Judgment Rule case Levandusky v. One Fifth Avenue Apartment Corp., which also involved a late change to a kitchen renovation and wound up giving boards broad discretion in their decision-making. He says the shareholder is not entirely without resources. First, no board can enforce a policy that contradicts law; and second, boards have been known to change their minds when presented with new information.

Gordon says that it’s a good idea when a shareholder disagrees with a board decision to write to the board to show its policy may be incorrect, giving evidence that it is wrong, and finding out why the board decided the way it did. “They can argue that it’s a good change, that it doesn’t harm the building, and that it’s consistent with sound engineering practice, and that it doesn’t affect anything.” And, he adds, “you should also say you are very sorry for breaking the rules.”

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