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BOARD OPERATIONS

HOW CO-OP/CONDO BOARDS OPERATE

Effective Steps Co-op / Condo Boards Can Take with Disruptive Members

Tom Soter in Board Operations on April 2, 2013

New York City

April 2, 2013

Serving on a co-op or condo board of directors should be a congenial affair. After all, you're working with your neighbors for the common good of the building — your home. But people being people, you usually have to deal with egos and agendas, protocol and procedure — and the fact some people just want to have their own way.

Shine the Light

Often, board members go rogue out of ignorance of their roles. When attorney Bruce Cholst first got on his co-op board — years before he specialized in cooperative and condominium law, currently as a partner at Rosen, Livingston & Cholst — he was excited by the changes he believed he would soon bring to the building.

Cholst quickly learned that his power was constrained by the bylaws, the proprietary lease and case law. "That was surprising to me," says Cholst, who took away a lesson from his dashed great expectations: It is important to offer a training session to board newbies so that they know what is expected from them and what limits there are on their powers. Consequently, his firm (as do many others) offers 90-minute seminars for new board members to educate them about their roles.

Education should begin at the first meeting after the election. Cholst says the board president "should start off with a somber message that being on the board is a great responsibility that carries with it discretion and confidentiality. And that means whatever discussion that occurs stays within the four walls of the board room. He should stress that it's a fiduciary responsibility. He should try to discourage them [from breaking the rules] by having a candid discussion up front."

Co-opting Critics

Boards might also deal with aggressive newcomers who come in with an agenda or criticism by giving them responsibilities that make them a part of the team, rather than treating them as outsiders. 

"If they want to be involved in negotiating with contractors, put them on a committee to do just that," says attorney Steven Sladkus, a partner at Wolf Haldenstein Adler Freeman & Herz. "That should satisfy their need to be involved in that area while still letting the board have some measure of control."

Cholst's board let a forceful newcomer head up a newsletter committee, where he worked with shareholders and was also monitored by a board member as they put together the newsletter. He was praised for any positive actions he took — and constructively criticized for wrong steps. "We basically had an open discussion and gave his ideas full debate, and when we voted some of them down, we gave him positive reinforcement and a pat on the back. You want to be subtle about it," says Cholst, "but the idea is to get them on your side."

Tougher Notes

If a co-op or condominium board member is disrupting meetings by bullying his fellow directors, the board can set up "executive committees," or go into "executive session" — essentially excluding that abusive member from the meetings so the board can get things done. But be warned: if the rogue member finds out about it (as he or she undoubtedly will), there will be even more trouble.

A severe step to take, too, is sending out a letter to contractors telling them who is authorized to negotiate contracts for the board. "If the contractor relies on anything that an unauthorized person said, it could possibly bind the cooperative," says Wagner, "because as a board member that person has apparent authority to negotiate. So, it's important any time something like that happens that you notify the contractor as soon as you learn of it."

You can also vote to remove the person from office, or to expel the troublesome board member — though this is tantamount to starting a civil war in your building. "I hate that approach," Cholst says, "because it airs the board's dirty laundry in public, and it's a drastic step."

Your final method of dealing with the rogue is to defeat him at the polls. Running your own candidate against him or her is the best way to solve the problem. Just be sure your new candidate has the votes to get elected and (good luck!) is not a new source of problems. 

 

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