Richard Klein in Building Operations on November 1, 2016
The following story appears, in slightly different form, in our November issue, “Board Business Through a Legal Lens.”
One of the shareholders in a co-op we represent in lower Manhattan started having drinking problems and was getting excessively drunk on many occasions. It got to a point where he would be found sitting in the lobby in his underwear. The co-op has a retail space that has its own entrance. Sometimes, this man would sit in front of the store, again either in his underwear or in shorts with no shirt. There’s one elevator, and he would get in, jam it up so that nobody could use it, and sit there eating Big Macs and French fries, and then leave all the wrappers in the elevator.
He became a little intimidating. Everyone knows each other in this building and they’ve known him for many years, so they weren’t terrified. But some of the women shareholders felt it was getting out of hand, and they were getting nervous coming in and out of the building when he was sitting there, drunk.
The board president asked me what to do. I said, “The first thing is, you have to call the police.” The board was hesitant to do that. I told them that if we wanted to take steps to terminate his lease based on objectionable conduct, we needed a paper trail of what was going on. Having police reports would be one of the best things to present to a judge.
The drinking episodes did not stop, despite the police coming over two or three times. I recommended that I send him a letter saying: “We now have all these incidents. They are documented with the police. Pursuant to your proprietary lease, this constitutes objectionable conduct. If it doesn’t cease and desist within 30 days, we’re going to take steps to terminate your lease.”
I got that letter out to him a few months ago. So far, he hasn’t repeated the behavior. We also suggested he seek some therapy. It’s our understanding that he has done that. Hopefully, there will be a happy ending to this story.
Co-op boards need to realize that having a good relationship with their professionals – particularly their attorney – is essential for maintaining good operations. Boards should reach out to their professionals when they have problems. I know some boards don’t like to spend the money, but if you stop a bad situation before it escalates, you will probably pay less in legal fees. Going to court to terminate a lease can be a very costly process.
Sometimes I play the bad guy. I got this board to tell the problem shareholder that the members didn’t want to call the police, but their attorney insisted they do it. I think that made them feel more comfortable. Once I gave them the cover, it was good.
The author is a principal in the Law Offices of Richard Klein.
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