Board/Building Harmony Can Boards and Shareholders Co-exist?

As an attorney who represents co-op boards, building managers and shareholders, one sometimes wonders if the expression—“ You can’t please all the people all of the time” best applies to the idea of creating harmony between these parties. However, I believe that there is hope and that you can try to please more of the people more of the time, if you just listen to what they are saying and respond promptly.

So often the reason parties call in an attorney is because the other party has just tuned them out and is not listening to whatever it is that they want to discuss. In short, they feel ignored. A co-op board may disapprove of some activity on the part of a shareholder. They convey their displeasure to the shareholder, who promptly does nothing to change his or her behavior. When the board is ignored, they call upon legal counsel to get the shareholder’s attention. Conversely, a shareholder may be trying to get the board’s attention on some matter and feels that he or she is being ignored. Sometimes it is true that the only thing that will get people’s attention is a letter from an attorney. However, this article is not about litigating to make your point. Instead, it is about trying to create more harmony in these relationships. Believe it or not, sometimes lawyers actually help people come together and resolve their problems without lawsuits.

Consider this example. A shareholder feels he or she is going to go crazy from the shareholder above who is wearing high heels and walking on a wood floor at all hours of the day and night. The shareholder tries to politely discuss it with the neighbor to no avail. The shareholder then contacts the managing agent who says he will look into the problem, but never calls the shareholder back. The shareholder calls weeks later and learns that the manager has confirmed that the neighbor is in violation of the house rule about carpeting, but feels this is just a dispute between neighbors and does not offer to do anything to help the situation. The shareholder asks for a copy of the house rules and never receives them from the manager.

This is a recipe for a lawsuit. What a difference it would make if the managing agent would do some damage control by following up and returning the shareholder’s call promptly and answering the letter. The manager should also be aware of what the building’s legal responsibility is in this situation, so that he knows how to respond and what action should be taken.

Many shareholders are renovating apartments. They need answers quickly in order to move the project along. Each day of delay is expensive for the shareholder. One shareholder spent a full year negotiating with the board over the terms of their alteration agreement. The co-op had had a bad experience with another shareholder and was trying so hard to avoid problems on this project that they created huge delays and expense for the shareholder.

In resolving this I found that nothing can help resolve a dispute faster and more effectively than getting all the parties together in a room to discuss the issues. This might mean having the shareholder and legal counsel meet with the board, its counsel and the managing agent. In other situations it might involve having the contractors come to the building to meet with the architect, building manager, board members and co-op counsel to discuss an issue. I arranged such a meeting as general counsel to the co-op in the co-op’s lobby. The contractor had to actually look at his work with the entire group of professionals watching and try to explain why there was “no problem.” Needless to say, we worked out a settlement of the issue quickly.

Shareholders have to select the right time to make their point and understand when it is the “wrong” time. Confronting the board by standing up in the middle of the annual shareholders meeting, with legal counsel by their side, may not be the best way to resolve an issue. Spending a few extra moments thinking before taking action can greatly help to improve the ultimate outcome of what appears to be a difficult situation. Not all attorneys want to rush into litigation. Some can be very helpful in reaching an amicable resolution.

C. Jaye Berger, Esq., is a principal of the Law Offices C. Jaye Berger, and a real estate attorney that specializes in construction-related litigation and issues pertaining to co-ops and condos.

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  • At present, we have 2 shareholders that are trying to sell their apartments. THey believe the decision making process of the admissions application should be in the hands of all shareholders (we are a small building, 9). They are hoping this coop board will become more condo like in its decisions, pied a terres, etc. We asked the buildng to vote for each issue brought up and we are at 56% for allowing pied a terres. Does that require the board to incorporate them in bylaws/rulebook? At present, there is nothing stated on this in our documents. Now the sellers of apartments in the building want to become board members, but only to act on the admissions committee and evaluate buyers. Isn't this a conflict of interests?
  • please advise...i've been a superintedent for over 25 years and have been a supervisor for over 35 yrs. i have dismissed men justly and arbritrated successfully for removals of staff. however, my current situation seems to be warranting the need of an attorney against the coop where i reside/work. the board has knowledge and proof that a particular doorman has been and continues to be very problematic for the building as well as for me. he has been written up several times, taken the managment/building and me to arbitration 3x and lost each time. he uses shareholders as allies for his continued lies causing much disharmony throughout the building. shareholders have changed their demeanor towards me and my family due to his slanderous ways. i am at my last wits end with this guy and the board. they are not and have not acted on this situation for over 10 years now but continue to pass the buck, sweep it under the rug and while i continue to delevope more and more evidence against this doorman, i feel the coop board is solely responsible for the allowing this behavior to continue. i will not be pushed out of my job by anyone especially since i have done nothing wrong and perform my duties above and beyond what's expected of me. what recourse do i have??? please help...thank you
  • Going out of my mind on Saturday, January 3, 2009 12:52 AM
    I have been a share holder and board member for the past 20 years. A year ago a new shareholder above me arrived with two small children who seem to never sleep and run the entire length of the apt all hours of the day. The kids room is conveniently over my bedroom. The house rules explicitly requests that apts are 80% carpeted. I have complained time and time to no resolution. I have on occasion tried to speak to the tenants who seem to think that there is no problem. Their just kids, and have gone as far as retaliating by stomping their feet heavily across the room and dropping heavy materials on the floor. I am at my wits end.
  • Many people don't understand the rules of living in a cooperative. They need to read their house rules. Just as all documentation should be bi lingual in case there is a language barrier. It is time for people to stand up and be proactive where they live at and stop relaying on others to do all the work. Why did you become a shareholder in the first place?
  • I am a shareholder for over twenty years I am at my wits end with the president of the board he don't return calls and he is very vindictive I am in contract for six months now waiting to close and now the president charging me for something I am not aware of subletting fee for six years back I decided I am not paying for something I don't know about I got an attorney can I sue the president if I lose my prospected buyer I about hard it the president need to remove