Page 8 - CooperatorNews NY February 2022

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WireCrafters.com | 800-808-1860 | info@WireCrafters.com Tenant Storage Solutions • Single or double tier • Industrial grade construction • Installation service available Tenant Storage Lockers & Package Delivery tween residents and their board-manage- ment teams, because it goes hand and hand with both a building’s finances, and the trust that residents place in the people running the building. “It can easily destroy the trust that the board member has earned,” says Hakim. “It can raise questions about his or her ethics and disrupt the daily operations of the board. Legally, the BCL permits a building to void or approve a contract which is the subject of the conflict. Dealing with the board member themself is not quite so easy—the bylaws should be reviewed to see what rights the owners or non-interested board members have to remove such a member. In all events, if the board member is not removed, and the contract approved despite the conflict, we would suggest that the board member recuse him- or herself from future votes on the contract or issue. Failure to do so may mean the board has to take legal action to disqualify that member from voting. Owners who wish to remove a board member with an undisclosed conflict or who has been self-dealing should review their bylaws. They often allow the removal of board members with or without cause, but the threshold vote may be difficult to obtain. “It’s a bit more difficult when the conflict of interest is with the managing agent,” Hakim continues. “Managing agents are entrusted to assist in the operation of the building and are expected to do so with the building’s best interest in mind. It’s not uncommon for a management company to use preferred vendors or contractors to help obtain the best prices for the building. However, undisclosed interests and kickbacks will certainly not sit well with the building, and are likely illegal given the agency/principal relationship that exists. To avoid any grey areas, all new management agreements should include a clause prohibiting conflicts of interest, kickbacks, and gratuities. Managing agents should have the building’s best interest at all times.” The expectation from shareholders and unit owners is that the board and management of their building or HOA will always be thinking of the property and its residents first. Maintaining trust between boards, owners, and management requires full disclosure, which can quiet concerns when a board member or management company offers what might appear like an inside deal. As always, transparency and accountability are key. n A.J. Sidransky is a staff writer/reporter for CooperatorNews, and a published novelist. He can be reached at alan@yrinc.com. CONFLICTS OF... continued from page 6 an alleviation and a magnification of the ef- fects of such isolation. Jim Stoller, president and CEO of The Building Group, a property management firm based in Chicago, sees this phenom- enon firsthand at the buildings his company manages, which are mostly luxury highrises in the city’s Gold Coast and other down- town neighborhoods. Of the COVID era, he says, “There’s a lot more people working from home—and there’s a lot of people who just aren’t working—so there are a lot more eyes around the building.” As the pandemic evolved, triggering lockdowns, shelter-in- place orders, and other unprecedented steps intended to slow the spread, Stoller says, “there were some people who were act- ing out, unfortunately; pounding on walls, walking around the buildings. In some cases, they were going up to staff members and getting in their faces—just really acting inappropriately. And that did create a lot of additional stress for board members and for management, and also for the staff. Es- pecially early on, when there were a lot of unknowns. It was a difficult period.” While Stoller praises his staff for their dedication and hard work—as well as “the 90% of the people in the condos and co-ops that we manage \\\[who\\\] really were wonder- ful”—he goes on to say that with so many people home all day, and ambient stress lev- els so high, “there are a lot more complaints about neighbors—the smoke complaints have gone up; complaints about people hanging out in the lobby have gone up. And then, with the amenities \\\[being closed\\\] in many buildings, you couldn’t go work out or swim it off, so that increased tension as well.” In many cases, says Stoller, that tension es- calated to the point where management was compelled to involve the building’s or asso- ciation’s attorneys. One of those attorneys is Howard S. Da- koff, partner with Chicago-based law firm Levenfeld Pearlstein, LLC. He explains that complaints must meet a “standard of rea- sonableness” to be considered a violation of an association’s or corporation’s governing documents, or the warranty of habitability, in the case of co-ops. “I’ve had calls from managers \\\[saying\\\] that a unit owner is com- plaining that the vacuum in the unit above them is bothering them, that they’re trying to work and they can’t work, and they’re de- manding that something be done.” This type of complaint, he says, does not meet the reasonableness standard. People are entitled to vacuum their floors, and in a multifamily setting, it’s inevitable that some noise from such activities will penetrate the walls of adjoining units. So how should a board respond? “What I tell boards is that in this unusual time, there’s an aspect of this that’s not le- gal expertise, that’s not pure management DEALING WITH... continued from page 1