Page 1 - NY Cooperator April 2020

April 2020 COOPERATOR.COM continued on page 14 Perhaps that needs to be spelled out in a rule change. Before deciding that, however, you should confer with counsel to make sure the rule is within the confines of the law, doesn’t discriminate, and is evenly ap- plied. Otherwise, your good intentions could turn into a discrimination claim or a lawsuit. Exercising care and consideration in drafting rules to protect all owners and residents will help, and is in the best interest of the community as a whole. continued on page 2 continued on page 16 (Editor’s Note: This article is a reprint from a previous edition of The Coopera- tor. The advice and guidance offered here are sound anytime, but are especially vital given the current coronavirus/COVID-19 emergency. We urge all our readers to look out for themselves and their neighbors.) Multifamily residential buildings provide both privacy and community. Privacy, because a recluse in New York City can have almost anything delivered to his door and thus never have to leave the sanctuary of his apartment; and com- munity, because a single retiree in an ac- tive adult community in Palm Beach can enjoy the company of his or her peers, as well as the benefits of supportive services and social activities. Population density is what makes co-ops, HOAs and condos ideal living spaces for anyone—includ- ing, and perhaps especially, the most vul- nerable residents. Whether we’re talking day-to-day safety or emergency planning, most buildings and HOAs have something on the books to address both standard operating procedures and things like alerts and evacuations. And that’s great if you’re a relatively young, able-bodied resident — but what if you, or a loved one or neighbor, are elderly, or live with a mental or physical handicap, or are a kid with working parents who takes care of younger siblings? Who looks out for the safety of these folks, and makes sure they’re accounted for should a fire, power outage, or other emergency arise? How can boards, managing agents, and residents promote the safety and secu- rity of the more vulnerable members of their community, both day-to-day and in emergency situations? What happens during a major weather event? Or an On March 11, 2020, the World Health Organization (WHO) declared the coronavirus out- break a global pandemic. Here in the US, the Centers for Disease Control (CDC) has detailed recommendations for individual preparation and response to the outbreak of COVID-19, the disease caused by the novel coronavirus. On March 14, President Trump declared a National State of Emergency, joining many states — including New York —that had already made their own declarations in the previous days. This is a scary time throughout the world, and we have to take immediate action to help our communities. This is especially true for condominiums, cooperatives and homeowners associations. Un- like schools, sporting events or other large gatherings, that can be cancelled or dispersed to avoid proximity to other people, these communities contain residents who live amongst each other and share common areas. When quarantined, told to stay home from the office, or to work from home, residents are still a part of a mass of people who are stuck living amongst each other. So what can management and boards do to protect their community associations as we navigate this new reality? Here are some steps you and your board-management team can take right now. Consider Your House Rules For all practical purposes, your board is a quasi-governmental body. For the most part you are allowed to make your own rules, provided that you do so within the confines of the law. Your board should review your house rules and determine whether new rules are needed. Rule changes can be done by a board vote. With residents home from work and children out of school, there are going to be a lot more people in the common areas during the day for the unforeseeable future. The rules may have to change. For example, communities usually have rules against creating a nuisance condition; is having a fever and continuing to use common areas like the laundry room, rooftop recreational area, gym, playrooms, pool, etc., a ‘nuisance’? The motivation for volunteering to be an uncompensated (and sometimes underap- preciated) co-op or condo board member is usually a sense of civic duty combined with the desire to protect one’s own investment and quality of life. This means that the ma- jority of board members actually live in the buildings and communities they serve. And that means that most board members are neighbors, serving with and for people who share not just common areas with them, but maybe even actual walls and ceilings. Such closeness has its benefits: familiarity with the community’s unique issues, people, and history; easy access to documents and other on-site information; and proximity to other board members for meeting quora, for example. But closeness also can lead to con- flicts, from the personal to the professional. So how do directors separate the business from the kibbitz in the boardroom? Fiduciary Duty According to Mary-Joy Howes, a part- ner in the law firm of Goodman, Shapiro & Lombardi LLC, which has offices in Massa- chusetts and Rhode Island, upon election, board members become fiduciaries—a term derived from the Latin word for ‘trust’—who are charged with making policies and deci- sions in the best interest of the community. A fiduciary has two primary duties: the duty of care and the duty of loyalty—meaning that a board member must exercise reasonable care when making decisions that will impact the community, and that regardless of personal feelings, board members must act in the best interests of the corporation or association. “Board members must always have the association’s best interest as their number- one priority,” Howes says, “and unit owners need to be able to trust that the elected board is acting in the association’s best interest at all times. The board members’ loyalty must be to the association and the association only.” Decisions made out of self-interest or to benefit a group of directors are therefore in violation of fiduciary duty—but in reality, board business runs more or less on the hon- or system. At least in the state of New York, residential boards are not really overseen by any other regulatory or governmental body. It is solely up to their electorate—the other Managing Through the Coronavirus Crisis What Condo, Co-op & HOA Boards Can Do BY JOSEPH COLBERT AND TEAM COLBERT LAW Vulnerable Residents Safety for All BY GREG OLEAR Relationships on the Board How Close is Too Close? BY DARCEY GERSTEIN 205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED