Q: The president of my co-op board is an actual property lawyer and steadily represents shareholders after they promote their residences within the constructing. He says he recuses himself when patrons for his purchasers undergo the board approval course of, however I do know he doesn’t. After I purchased my unit, he represented the sellers, and after I got here earlier than the board, he was there to ask me questions. Is that this authorized? Are there any laws about this sort of habits?
A: A co-op board president can legally work as a lawyer for shareholders promoting their models within the constructing. However simply because one thing is authorized doesn’t make it a good suggestion. This association leads, on the very least, to the looks of conflicted loyalties.
“It’s simply the picture of impropriety,” stated Julie Schechter, an actual property lawyer and a associate within the Manhattan workplace of the legislation agency Armstrong Teasdale. Sellers would possibly select to rent him over one other lawyer as a result of they assume he’ll give their patrons a leg up through the board approval course of, even when that isn’t true. “Whether or not he’s truly supplying you with a bonus or not, it’s giving off the notion that he can. And also you by no means need that.”
Even when the board president does recuse himself from the appliance course of, the association continues to be problematic. A board member has a fiduciary responsibility to the co-op. However as a lawyer, he has obligations to his consumer. And people two tasks won’t at all times align. Let’s say the vendor renovated a toilet with out informing the board or getting the correct permits, they usually inform their lawyer about it. “Now you might have an issue as a board president as a result of you already know that there was an unlawful alteration that was completed within the constructing,” Ms. Schechter stated. “And so the place is your loyalty?”
You may write the board a letter laying out your considerations, however that may not do a lot. “It’s like scolding somebody who’s doing one thing naughty,” Ms. Schechter stated. “In the event that they’re knowingly doing this, they’re in all probability not going to reply.”
Another choice: Run for a seat on the board, or discover an ally within the constructing who will. Spend the months forward of the board election drumming up help on your trigger, arguing that you just’re operating on a platform of moral management. This is able to require a big dedication in your half, but it surely would possibly assist change the tradition of the board.
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