A co-op or condo owner’s interest in their community is rarely just financial. In most cases, the building is also that individual’s home, which means they’ve got a direct stake in the quality of life therein. For that reason, most of the people who volunteer to serve on their board are full-time residents of their building or association. 

That’s not always the case, however; unit owners and shareholders who actually live elsewhere occasionally pursue board membership—and while there’s nothing illegal or inherently problematic about having non-residents on a co-op or condo board, it does present certain considerations. 

Motivating Factors

When a person who does not live in an association year-round runs for a board position, voters should evaluate that candidate by the same criteria they would a full-time resident. The two biggest questions to ask are what is motivating this individual to seek a board position, and will they put the interests of the greater association above their own? 

From a legal perspective, all board members have the same fiduciary duty to act in the best interests of the association, whether it’s their primary residence or not. From a practical perspective, there may be some differences in how resident and non-resident board members approach their duties. According to Marc H. Schneider, a partner with Schneider Buchel LLP, a law firm in Woodbury, New York, “Most associations prefer owner-occupied units, so in instances where conflict arises, it’s typically between those who live there and those who do not, but who rent out their units.”

Some management and legal pros observe that owners who lease their units to rental tenants tend to approach the operation of their association as a business, and join the board chiefly to protect their investment. According to one attorney, board members with more of an ‘investor mentality’ “are typically not as concerned about funding reserves, paying or adopting special assessments, or borrowing funds as needed. On the other hand, resident board members tend to have more concern for day-to-day operations, and how the enforcement of rules and regulations affect residents’ daily lives.”

“But there’s an obvious commonality there as well,” says Schneider, “since they presumably all want to keep the property at maximum value. So it’s not an automatic conflict of interest. But disputes can arise when someone who rents their unit out doesn’t want to improve the building if they can’t immediately ascertain the value of that improvement, and feels it will only cost them more in common charges or maintenance. But they have to remember that when you sit on a board, you’re supposed to take your ‘I’ cap off and put your ‘We’ cap on, and make decisions in the best interests of the entire building.”

Out of Necessity

Legal pros note that unless an association or cooperative’s governing documents specifically prohibit it, non-residents are legally allowed to run for board seats. It’s also worth noting that getting residents to step up and serve on their board in the first place is often a major challenge. According to Schneider, in communities where there are enough volunteers, non-residents aren’t likely to express interest in joining the board anyway—but when volunteers are hard to come by, an absentee owner or shareholder willing to do their part can be an asset. 

If a community elects a non-resident owner to the board fair and square, the matter is pretty much settled. That being said, if non-resident board members do begin to impede or compromise the governance of the community, they can be voted out, and the governing documents amended by a requisite vote of the owners to make residency a qualification for serving going forward.

When it comes to non-resident board members, says Schneider, “The community is going to be aware that someone doesn’t reside in the building, so they will take that into consideration when voting.”