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
    New condos in Manhattan
    Investing
    Rise of all-cash deals in NYC reshapes the real estate market
    empty nesters in modern kitchen
    Rent
    Empty nester checklist: What to consider if you are buying or renting in NYC
    co-op board reference letters NYC
    Co-ops
    Here are 8 real co-op board reference letters from successful buyers
  • Rent
    • Rent
    • Affordable Housing
    • Roommates + Landlords
    • The Market
    • The Search
    • How to Rent in NYC Guide
    Rachel's one-bedroom co-op apartment is newly renovated.
    Roommates + Landlords
    Why I moved to NYC from Long Island: After living with mean roommates, I wanted to own a place of my own
    Apartment buildings on MacDougal Street in Greenwich Village
    Affordable Housing
    Cuomo’s attack on Mamdani’s $2,300 apartment brings rent stabilization into the spotlight
    Woman walking down street in Jackson Heights
    Roommates + Landlords
    Ask Altagracia: Can my landlord refuse a lease assignment if I need to break my lease?
    Sponsored By Outerbridge Law P.C.
  • 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
    Woman on the phone to a plumber about a leaking sink
    Small Projects + DIY
    Here's what I learned to get our absentee landlord to fix things fast
    Big Apple Moving stackable eco-friendly bins
    Products + Test-drives
    Do I have to use cardboard boxes when moving in NYC? Are there any green alternatives?
    Sponsored By Big Apple Moving
  • Improve
    • Improve
    • Small Spaces
    • Small Projects + DIY
    • Renovations
    • Design + Architecture
    • Products + Services
    • How to Renovate in NYC Guide
    insurance adjuster inspecting mold
    Products + Services
    How to tell if your apartment has mold—and how to get rid of it
    Woman on the phone to a plumber about a leaking sink
    Small Projects + DIY
    Here's what I learned to get our absentee landlord to fix things fast
    mini splits apartments new york city
    Products + Services
    Yes, you can install central AC in your co-op or condo unit. Here's how
  • 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
    Big Apple Moving stackable eco-friendly bins
    Products + Test-drives
    Do I have to use cardboard boxes when moving in NYC? Are there any green alternatives?
    Sponsored By Big Apple Moving
    Woman walking down street in Jackson Heights
    Roommates + Landlords
    Ask Altagracia: Can my landlord refuse a lease assignment if I need to break 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
Ask a Co-op & Condo Lawyer [ SPONSORED ]

How can I tell if a co-op or condo board member has a conflict of interest—and what can I do about it?

By Wagner, Berkow, and Brandt  | September 4, 2019 - 10:00AM
image

There’s only a couple of situations where there’s an actual need for a board member to recuse themselves.

iStock

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

How can I tell if a co-op or condo board member has a conflict of interest—and what can I do about it?

Co-op and condo board politics can get heated, but actual conflicts of interest are few and far between. 

“There’s a conflict of interest when, and only when, a board member has a pecuniary interest in the issue on which the board has to decide,” says real estate attorney Ian Brandt, a partner at the Manhattan law firm Wagner Berkow & Brandt. 

A pecuniary interest might involve a board member who is a broker in an apartment sale in the building. That would represent a conflict because they have a financial stake in the deal where the board is deciding if someone is a viable candidate. 

Brandt says that in this situation, the board member should recuse themselves from voting on the issue but points out, “the only statute on this is in the Business Corporation Law and the statute is permissive, not proscriptive. The law requires board members to disclose all personal pecuniary interests, opening the possibility that if you disclose the interest, you may no longer be conflicted.” 

Another example might be a board member voting on an issue directly related to their specific apartment, like an alteration package, sublease, or transfer request. 

“It’s possible that someone can get away with voting on an issue where they have a pecuniary interest, but in these circumstances, as a general rule, board members should recuse themselves,” says Brandt. 

However, he points out, disqualification or recusal is just for voting purposes. “All board members have the unqualified right of access to all corporate materials and communications. If the board member wants to gather information or talk to people about any problem in the building, nothing is stopping them from doing that,” says Brandt.

Conflict of interest is not a purity test

Some people assume that a board member’s involvement in a dispute creates a conflict of interest, but Brandt says that’s not the case. 

“Board members should not be disenfranchised from voting just because they were involved in some messy building matter. The law disfavors disenfranchising anyone, especially someone who is an elected fiduciary to a corporation—so board members who are being bullied out of voting, which often happens, may have legal recourse,” he says.  

As an example, if a board member gets into a disagreement on a building issue with their neighbor and is asked to recuse themselves from the neighbor’s sublease application, Brandt says there is no legal basis for that recusal request. 

“This is not a purity test. If a board member is ousted from a vote because other members feel she was entangled personally or emotionally in the matter, I would recommend that she assert her rights and start action for an injunction and declaratory relief in the Supreme Court to compel the board to allow her to vote in the matter and gather all the information and participate equally like every other board member.”

Establishing a pecuniary interest

Sometimes it’s not clear whether a board member has a financial interest in the issue at hand. If that’s the case, an attorney can get involved and do an investigation, interview the accused board member, and ask them to turn over any corporate papers evidencing their financial stake in the matter. 

An example might be that the board wants to hire a construction or roofing company and a member is thought to have a financial interest in one of the firms.

“In this situation, I’d ask the company that’s bidding for the work to turn over papers to show the interest of the people who own it. This would determine whether the board member is actually an owner. If a vendor is bidding to do a roof replacement you can ask who the partners are in the company,” says Brandt.

“If there is a financial stake and the board member still won’t recuse themselves, the board may be able to start legal action to disqualify them from the vote,” he says. 

Ian Brandt is a partner at the New York City real estate firm Wagner, Berkow & Brandt. To submit a question for this column, click here. To arrange a free 15-minute telephone consultation, send Ian an email or call 646-780-7272.

You Might Also Like

image
New Construction + Condos I just found out the windows along the entire side of my apartment are going to get bricked up. What can I do?
image
Affordable Housing Can I still get a buyout of my rent-stabilized apartment?
image
Live Our co-op board hasn't held a shareholders meeting or an election in three years. What are our next steps?

 

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:

Ask a Co-op & Condo Lawyer boards co-op board Co-ops condos lawyers
SHARE
TWEET
BRICK’S PICKS
empty nesters in modern kitchen
Empty nester checklist: What to consider if you are buying or renting in NYC
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?
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