Spotlight on: Dissident Shareholders / Unit-Owners and Watchdog Groups
Sept. 22, 2014 — A number of co-op and condo board members have reported that their neighbors are suddenly turning into watchdogs. Some of them hope to create a shadow board to monitor the elected board's every move. Others want their boards to put major expenditures to a vote of all residents. They often believe co-ops and condos be a participatory democracy rather than a representative democracy.
And they're wrong, as far as many real estate experts are concerned. At one Manhattan co-op, shareholders recently tried to institute a policy that would have required approval from a majority of shareholders for any capital outlay greater than $100,000. Their attorney spoke out forcefully against the proposal.
It sounded like a good idea — shareholders would have had more say. Yet it interferes with the board's ability to do its job. If there's an emergency, the board has to be able to react quickly.
Some Safeguards, Sometimes
Some condo bylaws already specify that additions, alterations or improvements above a certain dollar amount must be put to a vote of all unit-owners. Some co-ops, particularly very small ones, have similar provisions in place.
Attorneys say that rather than establishing a watchdog group, disgruntled co-op shareholders and condominium unit-owners should be encouraged to work within existing bylaws and proprietary leases to remove board members whom they deem unsatisfactory. Better yet, dissidents should run for the board themselves.
For more, see our Site Map or join our Archive >>
Adapted from "Dealing With Dissidents" by Bill Morris (Habitat, June 2009)