The Meter is Running
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A board election can be rendered invalid if the meeting was not called properly.
AUTHORDale Degenshein, Armstrong Teasdale
Board elections often go smoothly, but challenges sometimes occur when the co-op or condo has problems. Such was the case at 303 West 122nd St., an HDFC co-op.
What happened. At this 42-unit co-op in Harlem, a group of shareholders challenged whether directors were properly elected at a special shareholders’ meeting held on July 16, 2020. The meeting had been called by the board president, who stated that almost two years had lapsed without a board election and that the co-op was facing extreme financial difficulties. There was some dispute as to whether the notice of meeting was proper, and even what the president’s position was at the time, but the primary dispute centered on whether there was a quorum at the meeting.
The answer lies in the co-op’s governing documents. In Matter of Singleton v. Morton, the court focused on whether certain apartments should have been counted. There were four apartments where the shareholders were deceased and no estates had been formed. There was no representative appointed for any of the estates, and the apartments had not reverted to the HDFC.
Under the facts of this case, the four apartments should have been included in the count needed for a quorum. They weren’t, so a quorum wasn’t reached. The court ordered the co-op to put the election aside and directed it to notice a new election within 30 days. This is a good example of the need to comply with a building’s governing documents when determining whether an election was properly held.