BrickUnderground checked in with a few of our legal experts and found
opinions strongly divided.
Co-op boards have “exclusive control over the operation of
the building subject to the shareholder’s rights contained in the proprietary
lease and bylaws,” says real estate lawyer Stuart Saft. “Since I have never seen either document
contain a right for a shareholder to use a particular broker, the board could
certainly ban an incompetent broker or one who is dishonest from handling sales
in the building…unless there is a showing of self-dealing, discrimination or
bad faith and unless a broker-board member is attempting to control a
While agreeing a board has a right to ban brokers, attorneyDean M. Roberts questions whether incompetence is a strong enough reason to
interfere with a shareholder’s freedom to hire.
Real estate attorney Robert Braverman, meanwhile, says the board has no power to blackball a seller's agent.
“That is a private business arrangement between the
shareholder and the broker,” he explains. “What does an individual’s decision to retain a particular
broker have to do with operation of the building? A proprietary lease does not
give a shareholder the right to eat Kashi Wheat Flakes for breakfast. Does that
mean a board can ban the cereal from the building because it is partially
sweetened and not the healthiest choice for your morning meal?”
As a practical matter, he notes, a ban might not even be
necessary: “Why would another
shareholder retain an incompetent broker who failed to get a good price on the
sale of a neighbor’s unit?”
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.