New York's Cooperative and Condominium Community

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Directors and Officers Insurance Does Not Cover Intentional Discrimination

Written by Adam Leitman Bailey & Colin E. Kaufman on April 26, 2013

New York City

In New York, public policy is that you cannot be insured against intentional acts that bring about intended results, such punching someone, causing injury or purposely discriminating against a member of a protected class. One cannot profit from one's own wrongdoing and thus, for example, the well-known prohibition against killing one’s spouse and collecting the life-insurance proceeds. Insurance companies cannot pay a judgment against an insured for punitive damages.

The managing agent remembers it well. There had been an incident in a co-op she managed that caused some damage to the building. She advised the board that, based on her experience, it would not be to the property's advantage to file a claim with the insurance company. "It was not significant enough, and if we filed, it would raise our premiums," she says now. "I thought everyone was in agreement on that."

Everyone apparently was — except for The Board Member Who Knew Better. He took it upon himself to contact the insurance carrier himself and file a claim. When the manager and the rest of the co-op board heard about it, some heated words were exchanged — and the agent ended up calling the carrier and withdrawing the claim.


Aug. 29, 2013 — Monkey bars are an endangered species. So are seesaws, metal slides that turn into frying pans under the hot sun and hard asphalt that helped invent the phrase "skinned knees." In fact, old-fashioned playgrounds with all those things are passé. So what does a co-op or condo board do when it wants to create an outdoor play area for children or upgrade the one you've had since the '60s? It's not as simple as buying a swing set at Home Depot.

Or as cheap, since it's an investment in increasing your property's market value. And what with many new developments having them for just that reason, your co-op or condo might need to keep up.

Welcome to the next installment of "Teachable Moments," an occasional feature in which veteran property managers give you tips based on firsthand experience with issues facing condo and co-op board members. One of the most common: how to deal with the expense and sheer scope of exterior repair. Mostly, it's about how you pay for it. But it's also about developing a mindset where you take the long road and realize it's better to go the extra mile, so to speak, and do a job right the first time rather than patching it up, expensively, over and over.

For a recent hallway renovation at an Upper East Side co-op, the plan was to remove old wallpaper and replace worn carpeting. But in the process, remembers Marion Preston, former board treasurer of the 111-unit co-op, the previous board had ordered a huge supply of excess wallpaper and carpet. "They had extra of everything just in case, but no one ever used it or needed it," Preston says. "For our job, we had all-new material, so we obviously didn't need this anymore. I couldn't bear to just toss it out. It was still in its original packaging." So what to do?

Welcome to our third installment of "Teachable Moments," an occasional feature in which top management professionals offer practical perspectives on important topics for co-op and condo board members. This time around, three industry veterans tell you in a paragraph each how they handled tricky issues involving co-op shareholders' monthly maintenance — specifically, on the need for modest annual increases, and how to overcome operational deficits and sponsors who leave you in the lurch.

Today Habitat introduces "Teachable Moments," an occasional feature in which leading management professionals offer quick takes on various topics of interest to co-op and condo board members. In the first of this series, four industry veterans give mini-lessons on how to find creative solutions to problems that resist the usual approaches.

In our second installment of "Teachable Moments," an occasional feature in which leading management professionals offer real-world takes on various topics of interest to co-op and condo board members, four industry veterans use the lessons of superstorm Sandy to draw attention to emergency preparedness in general.

In the advanced computer age in which we live, the first place people go to share an event in their lives, whether good or bad, is the Internet.  Whether it's an email, a blog, a tweet or a social network update, people are typically looking for a sympathetic ear or more commonly an alliance of similarly situated individuals. When it comes to qualified private communities such as co-ops and condominiums, it has become very common to discover blogs written by disgruntled homeowners seeking to rally his/her neighbors to cast negativity against a community, including their boards. 

Eight of the 11 main mayoral hopefuls attended a forum on co-op and condominium issues Tuesday in Queens, giving their views on property-tax disparity between co-ops / condos and single-family housing, the possibility of changing federal rules to allow FEMA grants for common-area repair and other topics before a crowd of several hundred. The two-hour event was sponsored by a co-op and condo advocacy group and a local bar association.

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Learn all the basics of NYC co-op and condo management, with straight talk from heavy hitters in the field of co-op or condo apartments

Professionals in some of the key fields of co-op and condo board governance and building management answer common questions in their areas of expertise

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