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How do you get shareholders to agree to a smoking ban?
AUTHORMatthew J. Leeds, Partner, Ganfer & Shore
PAGE #pp. 22-23
A town hall meeting can help residents air grievances and discuss new building policies, and may facilitate compromise.
In a recent decision, a lower court actually said that a co-op could no longer collect maintenance charges from the complaining tenant-shareholder until smoking was completely banned. That seems to be an extreme situation, but it’s still in the mix of what people have to consider.
The board has to first think about the constituencies, and second, about how a smoking ban can be implemented. In a co-op, you would amend the proprietary lease, while in a condo, you would amend the bylaws. In both instances, it involves a super majority vote.
As anybody who’s been involved in a co-op or condo knows, it’s very difficult to get that kind of super-majority. One way for the board to explore an issue like this is to have a town hall meeting. That’s not a formal vote, but it’s very helpful, because people can find out what the board is thinking about and what might be presented to them down the line. There’s another terrific aspect of a town hall meeting: the people get to see and talk to each other, and might end up understanding each other better.
In a building I represent, there was a lively exchange at the town hall meeting; it was afterwards decided that what they would like to do is have a smoke-free building. They established the restrictions and voted on provisions that would establish, prospectively, that the building would be smoke-free, so that any new owner would have to agree that he wouldn’t permit smoking in the apartment. The constituent documents were changed to require that. Because of the way that everyone behaved, they were able to come to a resolution that more or less satisfied everybody.
Because of the nature of the landlord-tenant relationship, co-ops generally have tighter control over the behavior of residents. The co-op is the landlord and the shareholder is the tenant. If there’s a provision in the proprietary lease that just point-blank says you can’t smoke in your apartment, the board can potentially have the tenant-shareholder evicted if he or she smokes. In a condo, if there is a bylaw saying that smoking isn’t allowed, there first has to be enforcement of the bylaw. There can be fines. There can be injunctions – violating an injunction is a bad thing. It’s actually contrary to law and can bring into play judicial enforcement. There’s also a provision in the Condominium Act that many people aren’t aware of that says if somebody is habitually violating the bylaws, the board can require security from the person for the actual damages.
It’s important to discuss the board’s concerns and the severity of the problem. Have a town hall meeting to hear the viewpoints. Having the people in the building hear each other is important. That way, you can often craft a compromise that satisfies all the residents.