Page 5 - CooperatorNews New York 2022

COOPERATORNEWS.COM
COOPERATORNEWS —
AUGUST 2022
5
QUESTIONS & ANSWERS
Legal
Q
A&
Disclaimer: e answers provided in this Q&A
column are of a general nature and cannot
substitute for professional advice regarding your
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sionals with any questions you may have regard-
ing technical or legal issues.
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Say Cheese?
Q
Today shareholders at our
Mitchell-Lama co-op in Queens
were informed with less than
24-hours notice that there will be a film
shoot taking place tomorrow on the prop-
erty from 6:00am Thursday and com-
pleted 12:00pm on Friday. Notice stated
all shareholders have to remove their cars
from the parking lot by 6am and will be
paid $200 each. The board also stated
that the film company has arranged for
parking at a local church several blocks
away with security. Filming will take
place in the parking lot and walkways of
one building. In another building it will
take place on the roof and on an apart-
ment floor. Shareholders on this floor will
receive $300 per apartment as an incon-
venience fee. The corporation will receive
$30,000, and another $1,000 for use of the
community room.
In allowing this action the board has
intentionally violated several house rules
regarding noise and a 9am to 10pm activ-
ity rule in buildings. The board has failed
to consider privacy violation issues, in-
surance issues, and it is doubtful that a
contract exists.
An inquiry was made with the cor-
porate attorney to find out if he advised
the board and reviewed any contract. I
am sure that I will not receive a response
from him due to the fact that there is fa-
cade and roof construction taking place
due to an 8A loan, and because he will
protect the corporation in this matter.
Are the actions of the board legal and/
or proper, and what laws and regulations
were they supposed to take note of and
consider before agreeing to this business
transaction at our co-op?
—Suspicious
A
Dov Treiman, partner at
Adam Leitman Bailey P.C.
in New York City, says,
“The reader states that the board is vio-
lating several house rules with regard to
this film project. This may be the case,
but violating rules or laws does not au-
tomatically end a matter up in the courts.
Somebody has to sue somebody. Ameri-
can courts do not reach out for the cases
themselves. Lawsuits are designed to be
expensive so that the courts are the last
resort, not the first. Thus, in this mat-
ter, chances are small that a case will be
brought. Absent a case, there is nearly
nothing to do.
“It is almost inconceivable that the
board or the film company would act
without a written contract. The film
company is going to want to protect itself
from shareholder suits by having such a
contract. Under the right circumstances,
shareholders are entitled to see the con-
tract. The reader should also be aware
that there is a thing called ‘the Business
Judgment Rule’ that gives a board broad
discretion in acting on behalf of the co-
op. This rule is so broad that challenges
to board actions usually fail in the courts.
There may be issues for which the co-op
as a whole may become liable from what
occurs in this transaction. But, that too
would require somebody suing. Rules are
not self-enforcing. It is nearly impossible
to tell from the question what specific
rules or regulations may have been vio-
lated, but there is the possibility that the
correct answer is zero.”
■
Do you have
an issue with
your board? Are you wondering
how to solve a dispute with a
neighbor? Can’t fi nd informa-
tion you need about a build-
ing’s fi nances? Our attorney
advisors have the answers to all
of your legal questions. Write
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publish your question, along
with a response from one of our
attorney advisors. Questions may
be edited for taste, length and
clarity. Send your questions to:
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Q&A