NEW YORK CITY

Updated Nov. 18 — New York City co-op and condo boards doing minor construction and renovation projects can now have their architecture and contracting professionals submit plans to the Department of Buildings for review and approval electronically, eliminating the time-consuming step of submitting them by hand to a borough office.

Called Hub Full-Service, under the aegis of the New York City Development Hub, this digital review and approval process impacts what the DOB says are 50,000 annual minor-construction applications known as Alteration Type-2 and Alteration Type-3 that are submitted each year by all categories of homeowners.

When a co-op shareholder or condo unit-owner living alone has either died or become incompetent or significantly incapacitated, and is no longer residing in the apartment, what should a board do? Whether you're in a cooperative or a condominium, you occasionally will be faces with requests for access to the apartment by a person claiming to be a close relative, boyfriend, girlfriend or legal representative of the owner. And even though the person making the request may be known to building staff or management, making them inclined to provide such access, you still should seek legal advice in this situation.

All boards have a natural tendency to protect the majority of their owners from the risky or disturbing activities of a few whose behavior may not fit the expectations of the community. However, evolving interpretations of state and federal laws grant additional protections to many of these persons, especially older and disabled residents, as well as families with children. Government and advocacy groups have also increased members’ awareness of their rights, forcing boards to adjust.

Arthur Gussaroff, the late managing partner of our firm, had a good story. He said there were two types of clients — those that call you before they do things and those that call you after they have to do things — and that the latter tended to pay dearly for that mistake.

A good example of this would be two of our residential-cooperative clients that had similar difficulties with their managing agents, but who dealt with them in very different ways. In both co-ops, the boards continued to have ever-increasing difficulties with the site managers and their managing companies.

Some condo and co-op boards have traditions — often informal and unwritten, so it's a stretch to call them "policies" — that only contracts above a certain dollar amount should be given to the board's attorney for review. But whether that threshold is $500 or $5,000, it's a mistake to use some arbitrary figure, since no matter how much money is involved, a vendor will naturally, and perfectly legally, write a contract that favors them should a dispute arise. Boards, equally naturally, have a duty to try to ensure the opposite. And since your building is the party that's laying out cash, one could reasonably argue that any disputes should tip in your favor.

On several occasions boards have found themselves saddled with directors whose conduct, attitude and lack of professional understanding have made it difficult for the board to take care of business. I have found that there is no single way to deal with these problems. The New York State Business Corporation Law merely provides requirements for disclosure of conflicts of interest and methods to void contracts, but the issues of the obnoxious, ineffective, counterproductive director rarely rises to the level contemplated by the law.

Whether it's among condo or co-op board members struggling to reach a decision, or between a board and the unit-owners or shareholders over the direction of the condominium or cooperative, it's often not easy to reach a middle ground and find a practical solution. In this latest installment of our "Teachable Moments" series, a trio of veteran management executives relate three short, real-life stories of how boards confronted with conundrums were able to resolve their differences and keep their buildings moving forward. 

Budgets, believe it or not, are living, breathing things. They're not etched in stone, and sometimes you can move components and budget lines like chess pieces in which the right piece at the right time moving the right way can make a pawn a queen. Think we're being overly metaphorical? Well, just ask these two experienced and utterly practical and pragmatic property managers, as they describe how they stepped in and moved those pieces and gave condominium and co-op boards some much-needed breathing room. Because not only are budgets living, breathing things, but but so are our buildings.

Lately, a number of longstanding Manhattan co-ops have been approached by brokers on behalf of wealthy persons who would like to buy the building and turn it into a single-family residence. Think of a four-unit building for which a buyer would be willing to pay $12 million. Three million dollars for each shareholder sounds pretty good. Or actually, maybe not.

First of all, there would be sizable transaction costs. The transfer taxes alone would be more than $360,000. For the sake of simplicity, let's assume a total of $500,000, thus leaving $11.5 million for shareholders to walk away from the table with. And then what else?

Cooperative and condominium boards of directors should ensure that appropriate corporate governance policies are in place and periodically reviewed by your attorneys. In particular, this means looking into policies for conflicts of interest, code of ethical conduct, document retention/destruction policies and risk management in your accounting procedures. Co-ops should have written policies regarding admissions, and both co-op and condo boards should do so with those regarding renovations, parking, pets and subletting. Finally, you should periodically review bylaws and house rules.

By doing so, many legal problems can be avoided. Here are some additional tips: