A Question of Privacy NY Law is Unclear When it Comes to Co-op/Condo Residents' Info, Attorneys Say

In a recent piece for the New York Law Journal, attorneys from Manhattan-based law firm Ganfer Shore Leeds & Zauderer delve into the issue of privacy as it pertains to the personal information of shareholders and unit owners - and the rights of co-op and condo boards to access that information. 

Nobody’s Business But the Board’s

Along with professional managing agents, volunteer directors on the board of a co-op or condo become privy to the financial histories, criminal records, and—in some cases—medical information of both current residents and applicants in the course of carrying out their administrative duties. According to authors Ira Brad Matetsky and William A. Jaskola, although board members and the board as a body are ethically obligated to keep such information private, they have no such legal obligation - because “There is no general common-law ‘right to privacy’ in New York,” say the authors.  

However, there is an implied trust between a board and their fellow shareholders or owners which presupposes that confidential personal information learned as a result of that relationship will be kept confidential. Matetsky and Jaskola contend that such confidentiality is legally enforceable and has, in fact, been enforced in New York courts - but its limits remain unclear. 

In some circumstances,” they say, “the courts may hold that fiduciary duties exist between a residential cooperative and its tenant-shareholders or a condominium and its unit owners. New York case law reflects disagreement as to when and to what extent a fiduciary duty is owed in this context.”

Part of the confusion lies in the protections afforded to boards under the Business Judgement Rule, as well as the general rule that corporate board members cannot be held liable for breach of fiduciary duty where their actions are taken by the board as a collective whole rather than by one or more individual directors or managers. As long as a board’s actions are “for the purposes of benefiting the cooperative or condominium, within the scope of their authority, and in good faith,” they are protected by the Business Judgment Rule.


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