Emanuela Lupu-Ferrante, Smith, Buss & Jacobs
The issue of objectionable conduct is being amplified by the fact that people are working from home. What was problematic when you went to an office is now insufferable when you're home full time. How should the boards deal with the situation?
Let’s start with a definition. Objectionable conduct is a chronic and continued violation of house rules and proprietary lease provisions. It's the level of conduct that rises above a simple one-time default, an ongoing course of conduct that literally brings somebody to the point of being unbearable. I think unbearable and objectionable are very similar in the context of co-ops throughout the city.
So it's not just a guy who gets angry and swears once at some staff person or some neighbor?
No. It's the man or the woman making their way through the hallways harassing neighbors, harassing the staff. We've had instances of particular individuals banging on their walls, playing excess music all hours of the night, screaming and attacking board members or other residents in the hallways and the common areas, abusing the staff. That is a very distinct and egregious type of objectionable conduct, but it could also be more nuanced. We've had situations in the past with overzealous shareholders who very strenuously might want to remove a board for whatever reason, who are posting signs all over the building, screaming and yelling at their managing agent every opportunity they get. They’re being aggressive with the staff and different board members on an ongoing and continuous basis. And it's the ongoing and continuous nature of it that pulls it out of the regular default world and into the objectionable conduct world.
So pre-pandemic, what were the most common ways of dealing with somebody who had objectionable conduct, from a board perspective?
Emanuela Lupu-Ferrante: Pre-pandemic, we utilized the Pullman option often. Pullman was a case that came down many years ago, where the courts held that there's a particular provision in almost every proprietary lease that allows the board to take a vote to deem an individual as objectionable, if they had engaged in objectionable conduct and repeated the conduct after having been given notice; and then there was a procedure that would be followed. The shareholder would be given notice of the objectionable conduct. The board would have to wait to see if it stopped. If it didn't, then the board would give a second notice, and if the conduct continued, the board would ask the shareholder to attend a hearing where the board would hear all of the evidence concerning the conduct that the individual engaged in and the individual would be given an opportunity to defend the conduct. They could bring an attorney with them, they could bring witnesses. It's literally a mini trial before the board. At that point the board would take a vote and determine whether or not they believe the objectionable conduct had continued. And if so, they would find the individual objectionable, a notice of termination would be served on the individual, notifying them that the hearing took place, that the board had made a determination, and that they had made a finding of objectionable conduct and that the shareholder’s lease was being terminated. At that point, a holdover proceeding would be commenced in landlord-tenant court.
I see. So you would go into the courts then?
Correct. That's the very detailed process that gets you there. The difficulty now is that the courts are relatively inaccessible, especially the landlord-tenant courts. New cases are currently being filed and being accepted for filing, but there's no return dates available. We don't know when the courts will make these cases available to be heard. And when they are, most of this is going to be virtual. Landlord-tenant court was always seen and viewed as a quicker resolution of a dispute than Supreme Court would have been. But now, in the middle of a pandemic, it really isn't. And even when the pandemic is over, there will be a massive backlog of cases that will take quite a long time to get caught up on. So in today's world, you have to find other options.
And in today's world, if somebody was displaying behavior that really was objectionable, should the board go through their internal process?
It's difficult because it would require a meeting. Pre-pandemic, it would be an in-person meeting, but now you're talking about the possibility of a Zoom meeting, or a webinar, or one of the high-technology meetings that we're having all over the place. To the extent that the offending shareholder has the ability to join such a meeting and properly defend their actions, that could work. But if it doesn't happen, the individual could make a case later on that they weren't able to properly participate and defend their behavior, then the entire process would have been for naught. So, we try to find alternative methods to deal with things and to address concerns in today's world. Depending on the nature of the conduct, obviously, it's going to vary on how you're going to handle it.
In situations where the conduct signifies any type of mental issues or instability, we've been able to reach out to Adult Protective Services and other city agencies and ask them to come in and intervene. In the past, it's been a difficult task getting them to come out, but these days Adult Protective Services has been very responsive when we've called. In a couple of my buildings where we reached out to them. As long as they can get access into the apartment and the shareholder lets them in, they'll interview the person, and if there is some psychological issue involved, they've stepped in and addressed it.
When you say stepped in and addressed, what exactly does that mean? I know of a building where there is a woman with some form of dementia who wanders the halls, and it's unsafe for her and the residents. If Adult Protective Services comes and knocks on her door and she happens to let them in, and they look around and make a determination that she actually does need help and shouldn't be living alone, what do they do?
Well, they resort to the court process. When Adult Protective Services can make a case, it would ultimately be an Article 81 guardianship appointment. They will bring in a social worker. Sometimes they will bring in a medical provider to do an evaluation of the individual. If those evaluations together with the living conditions rise to the level where they believe that the courts would find the resident to be incapacitated mentally to some degree, Adult Protective Services, through counsel, will commence an action on an emergency nature in Supreme Court to have an Article 81 guardian appointed on behalf of the resident. The guardian would have different powers depending on what Adult Protective Services can establish at a hearing. Sometimes they would have the power to remove the resident. Sometimes they would offer care and would basically force care onto the resident.
Without going too much into that, given the court backlogs, does Adult Protective Services have a special entree into a court that somebody else doesn't?
They're in Supreme Court, not in landlord-tenant court. Basically every Supreme Court in every county has a special courtroom for guardianship proceedings. And the only proceedings that I have seen moving expeditiously during the course of this pandemic have been guardianship proceedings. I won't say that they did so at the very inception, but certainly through the summer they began moving forward. And the judges have been participating, as have the guardians. So I think that is definitely much more expeditious than anything else. But it’s only going to work where you have an actual mental incapacity.
What are your other strategies for boards with a problematic resident?
We've taken extra steps much more than we normally would with respect to problematic residents outside of the legal realm. So, as lawyers for co-ops and condos, I've coined the phrase that we're not just the attorneys, we're also the counselors. And a lot of what we do is counseling of our boards, of our managing agents, of our residents and our shareholders. In some instances we've invited the offending shareholder to discussions, sometimes with myself, sometimes with management, but rarely the board. We'd like to keep the board out of that hands-on interaction and maintain a hierarchy level so that the board can act without worrying about upsetting their next-door neighbors. And that has been successful.
Sometimes people don't even realize how offensive some of their behavior might be. It sounds crazy, but sometimes when you call somebody out on behavior and you have an honest discussion, things get resolved. You can say, “Look, X, Y, and Z has happened, we have it on tape. We don't want to get to the point of having to command some objectionable-conduct action. We'd like to find a way to work it out. What do you think would help?” Engaging in the process has been helpful in a lot of ways.
I have also found that despite everything that New Yorkers are going through, a lot of people have become more rational and reasonable. While people tend to be a lot more annoying when you're home and hearing them all the time, it becomes much less important when you're in the middle of a pandemic and dealing with real economic issues. And you're able to get a little more perspective and maybe be a little more balanced. That's been my experience.
Still, there is always the court option.
Yes. But instead of landlord-tenant court, you have the option of commencing an ejectment proceeding in Supreme Court. We are currently commencing a couple of ejectment proceedings in certain cases that need resolution and just can't sit any longer. How quickly that will happen remains to be seen. We know that we will get more traction in Supreme Court than we will in landlord-tenant court at the moment. And hopefully, it'll resolve itself a lot faster that way. If not, we can always revisit when the landlord-tenant courts actually become available again.