Skip to main content
Fulltext search
FILTER RESULTS BY:
RECOMMENDED IN RENT
Moving to NYC after college? Here's how to find a rental apartment
RECOMMENDED IN BUY
How buying real estate in NYC is unlike anywhere else
RECOMMENDED IN SELL
A guide to using a no-fee renovation loan from a NYC real estate firm
RECOMMENDED IN IMPROVE
How to make your NYC renovation more pet-friendly
BEST REAL ESTATE WEBSITE!
National Association of Real Estate Editors
BEST REAL ESTATE WEBSITE! National Association of Real Estate Editors
Brick Underground
Social Links
follow:
  • Facebook
  • Twitter
  • Instagram
  • Flipboard
  • search
Brick Underground
☰ Brick Underground
Brick Underground
Brick Underground
☰
Brick Underground
  • Buy
    • Buy
    • The Market
    • Investing
    • New Construction + Condos
    • Affordable Housing
    • Co-ops
    • Negotiating + Financing
    • How to Buy in NYC Guide
    co-op board reference letters NYC
    Co-ops
    Here are 8 real co-op board reference letters from successful buyers
    Modern residential buildings in Chelsea, Manhattan
    Negotiations + Closings
    What is a post-closing possession agreement and what are the risks for buyers and sellers?
    Apartment buildings on Park Avenue in Manhattan.
    Co-ops
    12 tough co-op board interview questions—and how to answer them
  • Rent
    • Rent
    • Affordable Housing
    • Roommates + Landlords
    • The Market
    • The Search
    • How to Rent in NYC Guide
    Lower Manhattan apartment buildings
    The Market
    Manhattan median rent rose to $4,625 in June for another record-breaking month
    A rendering of the six-story building in Park Slope.
    Affordable Housing
    Housing lottery launches for 45 rent-stabilized units in Park Slope
    Young woman using laptop at new apartment, with moving boxes around.
    Roommates + Landlords
    Didn't get your security deposit returned in NYC? A new chatbot can help
  • Sell
    • Sell
    • Staging + Open Houses
    • Negotiations + Closings
    • Getting Ready
    • How to Sell in NYC Guide
    Aerial view of downtown Brooklyn
    Sell
    Median sales price in Brooklyn climbs to $995,000 in the second quarter
    Downtown New York City
    Sell
    Manhattan deals rose to highest level in nearly two years, defying national trends
    Modern residential buildings in Chelsea, Manhattan
    Negotiations + Closings
    What is a post-closing possession agreement and what are the risks for buyers and sellers?
  • Live
    • Live
    • Neighbors
    • Kids + Pets
    • Neighborhood Intel
    • Products + Test-drives
    • Troubleshooting
    FlatRate moving brick underground
    Live
    How to troubleshoot your move in advance
    Sponsored By flatrate
    Distressed woman sitting in her apartment
    Troubleshooting
    Ask Altagracia: My live-in partner is abusive. How can I get out of my lease?
    Sponsored By Outerbridge Law P.C.
    Lazy stubborn English Mastiff pet lies down on New York City side walk and the dog won't get up to do his daily walk city yellow cab in the background stock photo
    Kids + Pets
    4 ways to talk your landlord into letting you have a pet
  • Improve
    • Improve
    • Small Spaces
    • Small Projects + DIY
    • Renovations
    • Design + Architecture
    • Products + Services
    • How to Renovate in NYC Guide
    mini splits apartments new york city
    Products + Services
    Yes, you can install central AC in your co-op or condo unit. Here's how
    image
    Products + Services
    Take back your deck! How to win the war with mosquitoes and enjoy outdoor living again
    NYC apartment building with AC units
    Products + Services
    My neighbor's dripping AC is driving me crazy. What can I do?
  • Boards & Buildings
    • Boards & Buildings
    • Boards
    • Finance
    • Insurance
    • Legal
    • Property Management
    • Structure & Systems
    • Sustainability
    Burned and Boarded Up Windows
    When should your board hire a public adjuster?
    Manhattan GM
    What should we consider when renewing insurance for our building?
    Facade of NYC buildings
    How much is insurance on a NYC co-op or condo building?
  • Advertise
    • Advertise with us
    • Sponsored Content
    • Experts
    FlatRate moving brick underground
    Live
    How to troubleshoot your move in advance
    Sponsored By flatrate
    Apartment buildings in Little Italy
    Roommates + Landlords
    Ask Altagracia: My landlord hasn’t refunded my security deposit. What’s my next step?
    Sponsored By Outerbridge Law P.C.
    Distressed woman sitting in her apartment
    Troubleshooting
    Ask Altagracia: My live-in partner is abusive. How can I get out of my lease?
    Sponsored By Outerbridge Law P.C.
  • Brick Report
  • About Us
  • About Us
Email Address
Fulltext search
FILTER RESULTS BY:
New Main menu
  • Buy
    • Buy
    • The Market
    • Investing
    • New Construction + Condos
    • Affordable Housing
    • Co-ops
    • Negotiating + Financing
    • How to Buy in NYC Guide
  • Rent
    • Rent
    • Affordable Housing
    • Roommates + Landlords
    • The Market
    • The Search
    • How to Rent in NYC Guide
  • Sell
    • Sell
    • Staging + Open Houses
    • Negotiations + Closings
    • Getting Ready
    • How to Sell in NYC Guide
  • Live
    • Live
    • Neighbors
    • Kids + Pets
    • Neighborhood Intel
    • Products + Test-drives
    • Troubleshooting
  • Improve
    • Improve
    • Small Spaces
    • Small Projects + DIY
    • Renovations
    • Design + Architecture
    • Products + Services
    • How to Renovate in NYC Guide
  • Boards & Buildings
    • Boards & Buildings
    • Boards
    • Finance
    • Insurance
    • Legal
    • Property Management
    • Structure & Systems
    • Sustainability
  • Advertise
    • Advertise with us
    • Sponsored Content
    • Experts
  • Brick Report
  • About Us
    • About Us
    • Advertise
  • About Us
SUBSCRIBE TO OUR NEWSLETTER →
Social Links Footer
  • Facebook
  • Twitter
  • Instagram
  • Search
Live [ SPONSORED ]

Do condo and co-op board members have to disclose conflicts of interest?

By Wagner, Berkow, and Brandt  | November 22, 2017 - 10:00AM
image

iStock

SHARE:
Share to Facebook
Share to Twitter
Print
More...

The state legislature recently passed a law that will make life a little more difficult, and legislators hope, a little less ripe for self-dealing, for co-op and condo board members.

"The law, which goes into effect January 1st, requires co-op and condo board members to disclose any potential conflicts of interests to their fellow owners annually, and if there is nothing to report, to distribute a report reflecting that," says co-op and condo attorney Steven Wagner of the firm Wagner Berkow. "The law also requires that board members get a copy of the state corporation law governing conflicts annually.

The bill's Senate sponsor, Brooklyn state Sen. Martin Golden, wrote when proposing the change, "Cooperative housing boards of directors are supposed to be representative of the housing development and are trusted with promoting the best interest of the co-op tenants. However, that is not always the case. In some instances, a member of the board may be benefiting financially or by other means when a contract between a cooperative housing development and a third party is entered into."

As an example of this kind of appearance self-dealing, Habitat Magazine cites a recent lawsuit against an Upper East Side co-op board over terrace repair work that a shareholder discovered was being done by the board president's brother-in-law. 

There are already rules aimed at protecting boards from self-dealing.

"For example," Wagner says, "if you own a company that does flooring, and there was some need to do flooring in a co-op or condo, the fact that you have that company and you’re on the board doesn’t mean that the co-op or condo can’t use that company. Rather, you would have to disclose it, recuse yourself from consideration in voting on it. And the contract itself has to be competitive. So you can’t charge twice what everyone else is."

Indeed, the board president mentioned by Habitat recused himself from the vote on the terrace work, but that wasn't enough for the shareholder who sued.

The new law takes the further step of requiring that co-op and condo boards notify non-board owners annually of all the contracts voted on by the board, and who voted how, as well as making the board share with members annually the existing corporate laws against self-dealing. 

"That way, co-op tenants as well as the board directors can be sure of the integrity of the management as it relates to contracts," Golden wrote.

The new law doesn't outline specific penalties for failure to comply, but Wagner says it could create a new kind of legal liability for the board.

"It’s yet to be seen how courts may address this statute if it’s violated," he says. "It may just be that they require disclosure. It may be that they allow the cancellation of the contract. Or it could be that there’s damages if it’s not a competitive contract."

The law, he points out, applies only to contract relationships, and so it seems not to apply to brokers who are on the board of a building where they also sometimes sell units and collect brokers' fees. It also doesn't say how or when exactly the disclosures should be distributed, beyond saying it should be yearly.

Wagner suggests that any easy way to adapt would be to distribute it around the time of the annual meeting, along with the annual financial statement.

"It just makes sense that it would be done together," he says.

 

You Might Also Like

image
Renovation Approval, schmoovel! Renovation perks for board members
image
Troubleshooting Ask an Expert: How can we kick this bully off the board?
image
The Market 10 signs of a user-friendly co-op board

 

Brick Underground articles occasionally include the expertise of, or information about, advertising partners when relevant to the story. We will never promote an advertiser's product without making the relationship clear to our readers.

topics:

boards co-op board Co-ops condos lawsuits lawyers
SHARE
TWEET
BRICK’S PICKS
NYC apartment building with AC units
My neighbor's dripping AC is driving me crazy. What can I do?
Historic brick facades of NYC apartment buildings
Getting overcharged by a landlord? Here’s how the Tenant Protection Unit helps rent-stabilized tenants
Apartment buildings in Soho
New Rent Guidelines Board report justifies a rent freeze, tenant advocates claim
Brooklyn apartment buildings
Understanding net effective rent: Here's how to calculate your real monthly rent
image
How much should you renovate your NYC apartment or house before selling?
Council Member Shahana Hanif hold press conference before the City Council vote on Arrow Linen spot rezoning.
City Council signs off on 10-story towers for Arrow Linen site
Follow Brick on Instagram
@brickunderground | #brickunderground
Brick UndergroundBRICK UNDERGROUNDREAL LIFE. REAL ESTATE. REAL NEW YORK.
Social Links Footer
  • Facebook
  • Twitter
  • Instagram
  • Search
Main menu footer
  • Buy
    • The Market
    • Investing
    • New Construction + Condos
    • Affordable Housing
    • Co-ops
    • Negotiating + Financing
    • How to Buy in NYC Guide
  • Rent
    • Affordable Housing
    • Roommates + Landlords
    • The Market
    • The Search
    • How to Rent in NYC Guide
  • Sell
    • Staging + Open Houses
    • Negotiations + Closings
    • Getting Ready
    • How to Sell in NYC Guide
  • Live
    • Neighbors
    • Kids + Pets
    • Neighborhood Intel
    • Products + Test-drives
    • Troubleshooting
  • Improve
    • Small Spaces
    • Small Projects + DIY
    • Renovations
    • Design + Architecture
    • Products + Services
    • How to Renovate in NYC Guide

Get more news you can actually use...

Email Address

Delivered to your inbox weekly - for free.

*By signing up you agree to receive occasional emails on behalf of our sponsors

Footer Menu
  • About Us
  • Advertise

Copyright 2009-2024 by BND Ventures Inc | Privacy Policy | Terms of Service | Ad Choices | Login