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Does Your Board Define the Problem Before Passing Rules?

Written by Donna DiMaggio Berger on January 10, 2014

New York State, New York City

Einstein is quoted as having said that if he had one hour to save the world he would spend fifty-five minutes defining the problem and only five minutes finding the solution. Co-op and condo board and homeowner-association counsel often do not hear of the existence of a new rule until we are being asked how to enforce it. In response, good counsel will ask for a history on the rule and how it came into existence. My first question is usually, "What was the problem that required you to pass this rule?"

Gandolfo ("Dolf") Ferucci has served on the board of the 66-unit Smith Street Gardens in Freeport, Long Island, since the mid-1980s. He moved into the 56-year-old building around 1982, and bought in as an insider when the building went cooperative in 1986. The apartments have very large rooms, he notes, and most residents are elderly and middle-income. Here, talking with Habitat Associate Editor Aparna Narayanan, the co-op board veteran discusses lessons learned over 25 years.

A change in the processing of the New York State School Tax Relief (STAR) program may cause nearly half of New York City's homeowners, including co-op shareholders and condo apartment-owners, to miss an average $280 property-tax break due them.

For the first time since the STAR exemption was enacted in 1997, homeowners under 65 years old who are already enrolled are now required to register with the State in order to continue receiving it. Previously, enrollment was automatic so long as the taxpayer continued to own the residence. As the Dec. 31 registration deadline approaches, 53 percent of City homeowners have registered, compared to 66 percent statewide.

Social media such as Facebook and Twitter can be a boon to co-op boards and condo associations, allowing you to get messages out quickly to your communities. But board members should be aware of the potential legal risks, such as:

Let's say working conditions at your co-op or condominium aren't necessarily ideal. And let's say your super complains about his job on his Facebook, Twitter or other social-media page — vocally and in detail and with profanity — and that it makes the board and the building look bad.

Can you fire him? That depends — on what he says, on who can read it, on who responds and how, on whether he's talking about this own job or the staff in general, among other factors. Here are some hypothetical posts and situations. Remember: Every specific case is different, and your lawyer is the one to give legal advice. But in terms of general guidelines, you should @#$%! read this.

A reader asks: How do you deal with a bylaw provision that doesn’t include "life partners"?

The facts in this particular instance are that a co-op shareholder wants to give some of her shares to her life partner. The proprietary lease limits the occupancy of apartments to certain listed family members — not including life partners. The bylaws of the corporation provide that transfer of shares must be for the entire amount of shares —  no partial transfers. Does the bylaw provision violate the shareholder's right of alienation of her shares and is the bylaw provision enforceable?

A co-op in New York City that has always had set policies regarding how stock in apartments may be held had an interesting question regarding how stock should be held by two same-sex individuals under the state's recently enacted Marriage Equality Act, which grants same-sex couples the right to marry. The policy of this co-op is to require all shares with more than one shareholder listed on them be held as joint tenants with right of survivorship. However, the co-op will make exceptions when shareholders complete an application and explain the basis for a different form of ownership. Normally, the exception that arises is for the stocks to be held by married couples as Tenants by the Entirety

A bill introduced in Congress Wednesday by New York Rep. Steve Israel (D - 3rd District) would make housing cooperatives and condominium associations eligible for Federal Emergency Management Agency grants.

Co-op shareholders and condo unit-owners themselves already are eligible for such funds, with many such homeowners after superstorm Sandy having received up to $31,900 each for emergency housing not covered by insurance. Homeowner associations, however, cannot apply for FEMA grants, which co-op and condo boards say are needed to repair common areas as well as such physical-plant necessities as boilers.

Sure, your doorman probably isn't gossiping about the people you're dating. And sure, that fellow co-op board member who wants you out isn't looking through security-camera footage to prove you're not cleaning up after your dog. And, surely, you as a parent aren't going to ask your board or management to let you see electronic key-fob data and confirm what time your teenager came home.

Except … what's to stop you?

The co-op board was complaining about the superintendent. "He sends us bills for everything he does," said the treasurer. "He paints the hallways, we get a bill. He repairs the burner, we get a bill. He fixes plumbing in the walls, we get a bill. What are we paying him for? Cleaning up the hallways and common areas?"

I listened carefully to the duties enumerated by my colleague on the board and thought, "That's an awful lot of work to do for the pittance we pay him."

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