Page 30 - NY Cooperator Expo April 2019

What Does the Rest of 2019 Hold? Industry Experts Weigh In BY MIKE ODENTHAL TRENDS 2 018 – and the first half of 2019 – have boards work, and then establishing rules been anything but dull, from the global that are focused on the small percentage of level all the way down to co-op, condo boards that are problematic inhibits the ac- and community association communities. tivities of all those good boards. While it’s somewhat beyond The Cooperator’s scope to opine on geopolitical currents or the relevancy is reverse mortgages for co-op latest round of congressional testimonies, we shares, which have been largely unavailable reached out to an array of real estate and legal despite proposed legislation kicking around professionals across several different markets for awhile. I’m not sure exactly what the goal to discuss how the events of 2018 spilled into of that proposed legislation was, but the issue 2019, as well as what they think the second itself I think is an important one. The value of half of 2019 may bring to the multifamily reverse mortgages—particularly as more and housing industry. The Law David A. Brauner, Counsel with Wind- els Marx Lane & Mittenford, LLP in New York City “Over the past few years, the New York City Council and New York State Legislature have been attempting to restrict co-op board action via legisla- tion, stemming from arguments about transparency, and that boards should be mandated to pro- vide reasons for all their decisions. I think that would effectively reduce the impact of the Business Judgment Rule. They’ve also that can be collected from a third-party pur- discussed term limits and other related mat- ters. And while I recognize that there were a judgment. Section 9(g)(4) of the Illinois handful of bad instances which triggered the Condominium Property Act provides that concern, in my mind effecting legislation of an association can collect up to six months of this nature could undermine the ability of a assessments that came due prior to the initia- board to effectively function. In particular, tion of a collection action against the prior it would make it increasingly difficult to get owner and which remain outstanding. Sec- people willing to serve on the board out of tion 9(g)(5) provides that attorneys’ fees and fear of exposure to liability, and out of fear costs incurred by the association to collect of second-guessing good faith decisions that from the prior owner can also be collected. these people—who are essentially volun- teers—make. “What overregulation can do is foster a with the prior owner) can be collected from a landlord/tenant mentality between board third-party purchaser, reasoning that Section members and shareholders, which co-ops 9(g)(5) is merely a ‘notice’ provision, and does were originally formed to try and overcome. not actually give the association the ability to I’m not claiming that’s the intended goal, demand these amounts. This doesn’t really but it may be an unintended consequence. make sense to me. Why have a notice pro- Sometimes the failure of those with legisla- tive powers to understand how good co-op this issue will be further litigated in the near “The other issue I see having increased more co-ops have long-time residents whose economics are unequal to the current value of their apartments—comes through retain- ing a diversity of economic status among co-op membership; they enable older sharehold- ers to tap into the equity of their apartments in order to continue liv- ing there, without being forced to sell. It’s about allowing people to stay in their homes, and not accelerating the dimi- nution of different eco- nomic points of view.” Reginald D. Cloyd III, an attorney with with Tressler LLP in Chicago “A super hot topic right now is the amount chaser at a judicial sale after a foreclosure However, various appellate courts have held that no attorney’s fees and costs (associated vision if it can’t actually be enforced? Surely “Smoke-free build- ings: policy statements required earlier this year have inspired some associations to review the issue.” — Steven Wagner 30 THE COOPERATOR —APRIL 2019 COOPERATOR.COM See us at Booth 100 www.automaticindustries.com 1-800-THE-WASH WOMAN OWNED COMPANY BACKED BY A LOT OF MAN POWER FAMILY-OWNED SINCE 1971 We offer a boutique style of service We are compassionate and caring to our customers While still being competitive with the “Big Box” Boyz! Offering state-of-the-art laundry rooms See us at Booth 208