Page 1 - CooperatorNews NY February 2022

February 2022 COOPERATORNEWS.COM op, or the unit owners in a condominium, \\\[and the\\\] governing documents of the building dictate their authority. As such their responsibilities vis-à-vis individual units are not the same as a landlord.” What About Management? In a rental setting, the owner and the management of the property are often the same entity. Scott Wolf, CEO of BRIGS, a property management firm based in Boston, notes that his NEW YORK THE CO-OP & CONDO RESOURCE COOPERATORNEWS 205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED By its very nature, life in a co-op or condominium community is different from living in a rental unit or a private home. While that statement may seem pretty obvious, many owners of co-op and condo units lack a clear understanding of what exactly those differences are, and how they determine the parameters of what residents can and can’t do in their units and in the common areas of their building or HOA. There’s also frequent confusion about what physical, administrative, and maintenance elements boards and management are responsible for in a community, versus what falls to individual owners. All too often, owners think of their board as a landlord, rather than an elected governing body, and mistakenly expect them to handle everything from sorting the recycling to changing a lightbulb in their bathroom. While there is a fair bit of overlap between the respective roles of boards, managers, and landlords, they’re not interchangeable. Knowing the difference—and even more importantly, respecting it—can go a long way toward smoother, more amicable relationships between co-op, condo, and HOA residents and their community administrators. Is the Board a Landlord? In a word, no. “The board is not a landlord,” plain and simple, says Daniel Wollman, CEO of Gumley Haft, a New York-based management firm. And while some more obscure legal positions take the view that co-op boards are a kind of “stand-in” for the landlord or property owner (as the widespread confusion over the rent protection legislation passed in New York State in 2019 demonstrated), in reality, it’s not equivalent to either of those roles. “The board members, like all the shareholders, are proprietary lessees,” notes Wollman. “They have the same rights and obligations as the rest of shareholders. The board \\\[members\\\] are the elected representatives of the corporate shareholders in a co- continued on page 2 If you live in a condo or a co-op, you most likely have heard the term fiduciary duty , usually in reference to the responsi- bilities and obligations of board members and management. But what is a fiduciary duty? In essence, it’s a legal relationship be- tween two parties that gives one party the right to act and make important decisions on behalf of the other. Fiduciary respon- sibility is a cornerstone of both board and management service. Board members and managers alike must put their obligation to the corporation or association over person- al gain—which means avoiding situations that could present a conflict of interest. Simply put, a conflict of interest is a situation in which the concerns or aims of two different parties are incompatible. In a business environment such as a condo association or cooperative corporation, it’s a situation in which someone—like a board member or property manager—is in a position to benefit personally from actions or decisions made in their official capacity. Honesty = Best Policy “A board member has a conflict when he or she has a financial interest in the subject matter being decided,” explains Mark Hakim, an attorney with New York-based law firm Schwartz Sladkus Reich Greenberg Atlas. “Examples include a board member (or possibly someone in a board member’s immediate family) having an interest in the building doing business with a specific company, or a board member who is also a broker handling sales in the building. Such conflict must be disclosed, and can be waived by the board—but disclosure is the key. Board members must disclose their conflict, and if it’s not waived or waivable, must recuse themselves from the matter.” Richard Brooks, a partner with law firm Marcus, Errico, Emmer & Brooks, P.C. in Braintree, Massachusetts, expands on Boards, Managers, Landlords Understanding the Difference BY A. J. SIDRANSKY Conflicts of Interest Recognize Them Now to Avoid Problems Later BY A J SIDRANSKY Dealing With Disruptive Residents Empathy & Education vs. Enforcement & Eviction BY DARCEY GERSTEIN continued on page 6 If you live in, work in, or provide services for a co-op, condo, or HOA, you know that however harmonious a building or asso- ciation is in general, there is always that one person—or perhaps more than one—who throws a wrench in the works. It could be the guy who seems to take pleasure in dis- respecting the doorman, or the lady who insists on feeding the feral cats (and by ex- tension the neighborhood rats), or the fam- ily who lets their kids play basketball inside their apartment. These are the people who— at best—regularly suck up more than their fair share of energy and resources from the community, or—at worst—create an unde- sirable, unhealthy, or even dangerous living situation for themselves and their neighbors. Now throw in one of the most devastat- ing pandemics the modern world has ever seen, and it’s a wonder we haven’t all turned into some form of that guy. After two years of loss—of loved ones, of homes, of jobs, of normalcy— the news has been full of reports of incidents ranging from the outlandish to the criminal going down in settings that are normally benign: grocery stores, airplanes, hair salons, restaurants, school board meet- ings, even medical facilities. Whether it’s for attention (even the negative kind), an expression of deep frustration and anxiety over the seemingly endless state of crisis, or just jerks happy to have an excuse to be es- pecially jerky, it seems that more and more people are indulging in disruptive, combat- ive behaviors. Has this also been the case in the nation’s multifamily communities? We spoke to several pros in the industry to find out. The COVID Conundrum The coronavirus’s rampant transmission and attendant restrictions on public life have made time at home essential to survival— both in the sense of avoiding the spread of a potentially deadly contagion, and in the sense of keeping work, family, and other fundamental functions going from within one’s own domestic confines. In a co-op or condo, particularly those of the vertical va- riety, the communal element of shared walls, spaces, and financial obligations brings both continued on page 8