Geoffrey Mazel in Board Operations on November 6, 2012
The first step involved some due diligence on behalf of the board, which included:
These warning letters were a great help in vetting the units. As for those shareholders who did not respond, the board even went to the length of hiring a private investigator.
Upon completion of this process, the board was able to get a grasp of which units were being sublet and even gave the shareholders’ amnesty in submitting an application for approval.
As for the shareholders not in compliance at this point, our firm served a notice to cure and started the litigation process.
If a board acts in a coherent and reasonable way, a longstanding problem can be resolved.
In this situation, the board did not act too quickly or rashly. Starting the process with sending a simple letter was a tremendous boost to the process. The letters included the occupants of the units who had no idea they were even occupying the units without necessary board consent.
Another prudent move by the board was to have an amnesty program and allowing the shareholders to cure the illegal sublet. The advance notices and the amnesty program brought many shareholders into compliance without resorting to any litigation and incurring any legal fees.
At the end of the day, only one or two shareholders were the subject of litigation. The word got out in the cooperative that the board was serious about enforcing its rights regarding sublets, and the co-op has been operating without incident for the last few years.
Geoffrey Mazel is a partner in Hankin & Mazel.
Photo by Carol Ott
Engage, enrage, ask questions and give answers with your community of board members. Submit your questions and comments here!
Co-op and condo board business broken down into bite-sized bits - 2 stories each week. Read now on all digital devices.
A free digital resource for co-op/condo board directors. Published twice a month. Read now on all digital devices.