When I joined my co-op’s board in 1987, I happened to know a little more than most because of my work at Habitat. But I could hardly imagine what it was really like until I actually served: the petty controversies, the endless meetings, the misunderstanding of the board’s role by the shareholders, the untold hours trying to protect our home.
But if you’re on your board, you already know all that. What you may also know (but don’t do enough of) is the importance of educating your fellow residents about what you do and why you are doing it, because your actions can be widely misunderstood. Stuart Saft, a partner at the law firm of Holland & Knight, recalls one especially troubling situation. He once represented a large apartment complex in which a shareholder intentionally started a fire in her apartment. She was taken to Bellevue for observation. After she was released, the board – concerned that this woman was a danger to the building – tried to stop her from returning. The court refused the board’s request and the co-op was even reprimanded by the judge. The woman moved back in and blew up her oven. She was sent back to Bellevue and the board again tried stop her from returning. She ultimately killed herself with an overdose of pills.
The board’s actions – trying to prevent a clearly disturbed woman from returning to the co-op – may have seemed harsh (certainly the judge felt that way), but if you try sitting in a board member’s seat, you see things a little differently. It isn’t just the case of a disturbed woman coming back – it’s a question of protecting your property and your neighbors. Nonetheless, the board shouldn’t make major decisions like this without informing the residents of the rationale.
And doing that is not always easy. When my small Manhattan co-op had problems with the commercial tenant who performed major renovations without proper permits or licensed workers, we had no choice but to take him to court. The litigation dragged on, and by the end of the second year, we were taking flak from many residents who wanted to know why we had gotten into this costly lawsuit. Since we were in litigation, our attorney told us not to say too much. Therefore, at a special meeting, we explained that we had no choice: the commercial tenant was breaking the law and endangering the building. That didn’t stop a number of shareholders from complaining bitterly that we were mishandling the situation. In the end, we reached a settlement and were reimbursed for our legal costs.
Another example is the recently resolved case of Brenda Pomerance, a patent lawyer and unit-owner at a condominium in Manhattan’s West 50s. Five years ago, she began a lawsuit against her condo association because the board wouldn’t let her read condo documents, ignored a noise complaint she had made, and declined to give her access to email addresses and other information about the building and the unit-owners that would help her in running for a seat on the board. Even though Pomerance had previously served on the board, she treated it as the enemy. She initially refused to sign a confidentiality agreement, and accused the president of self-dealing and the board of engaging in an expensive and pointless lawsuit with the sponsor.
Could Pomerance’s lawsuit have been avoided? Hard to say without knowing the people. If something like this happened to you, you should ask: Is the board being communicative or high-handed? Is the complaining shareholder being paranoid or perceptive? In such situations, all a board can do is try to see if the complaints have any merit – and then try and make everyone else see the situation from the board’s perspective. It’s not always easy. But it’s always essential.