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Should Co-op Boards Prohibit Shareholders Having Guns? The Issues

Sheryl Nance-Nash in Board Operations on June 20, 2013

New York City

Prohibiting Guns: Issues
June 20, 2013

What's at stake for boards? "If there's an incident [involving a gun], everybody is probably going to get blamed. They will say the building should have screened purchasers or known that guns were owned, or taken precautions," warns attorney Bruce Cholst, a partner at Rosen Livingston & Cholst. "The board may be named as a defendant in a lawsuit."

"Should a shareholder shoot someone, it generally would not create liability for the co-op if it was the first shooting incident by [that individual]," says Aaron Shmulewitz, a partner at Belkin Burden Wenig & Goldman. "Similar to ‘vicious dog' cases, if the co-op board had no reason to know of the shooter's dangerous propensities, the co-op generally won't be liable for [the] criminal act."

For example, if the board accepts an applicant who is a police officer, and an incident occurs, it is unlikely the board would be held liable. However, if the board knew at the time of the application process that this police officer had a history of unjustified shootings, the outcome might be different.

A more obvious example, says attorney David Ostwald, a senior litigator at Schechter & Brucker, would be where the board knows a person has a history of violent behavior, mental illness or criminal conduct and fails to take reasonable care to address the potential danger. "Courts and juries do not look kindly on property owners who ignore signs of danger," Ostwald cautions.

Challenges

The most challenging issue is the difficulty in monitoring gun ownership. Firearms are generally concealed or securely stored. This could make it difficult to prove a violation if the case went to court. Existing owners of firearms would still be bound by any policy, as both co-op shareholders and condo unit-owners are obligated from the inception of their ownership to abide by all provisions of the governing documents.

"What mechanism would you use to enforce [restrictions]?" asks Stacey Patterson, of counsel to the law firm of Herrick, Feinstein. "Do you search units? I don't think so. If you see someone carrying a gun in public areas, then yes, you do a search. Having restrictions is useless if you can't enforce them."

Alvin Wasserman, director of asset management at Fairfield Properties, sees other problems. "If a cooperative were to adopt a no-gun rule, would a criminal without regard for the law [applying for a co-op apartment] hesitate to lie to a cooperative board about gun ownership? Thus, if a no-gun rule could be passed in a cooperative, law-abiding owners would not have guns and criminals would. This would be a microcosm of conditions in society as gun control laws become more restrictive on law-abiding citizens."

Economics and Insurance

Some gun advocates raise the possible economic downside of putting in place such rules. Says Patterson: "Potential buyers may be fearful. They may think there were problems in the building in the past. What impact will such policies have on potential buyers? Will they reduce the value of the units? There's a lot to consider before passing gun control regulations."

Whatever path your co-op board takes, you always should maintain appropriate insurance. Most general liability policies provide coverage for a suit in which the co-op is named because of an injury from a gun-related accident or shooting in the building, but some companies do have a firearms exclusion, as well as an assault and battery exclusion. Either could conceivably exclude coverage for gun-related incidents, so insurance policies should be reviewed carefully, says insurance broker Edward Mackoul, president of Mackoul & Associates.

To learn what kinds of gun questions boards can ask at an admissions interview, read part 3 this Tuesday afternoon or pick up the June issue of Habitat.

 

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