HOW TO HANDLE PROBLEMS WITH A
CONDOMINIUM'S BOARD OF MANAGERS
QUESTIONS AND ANSWERS
G. OLIVER KOPPELL
ATTORNEY GENERAL
NEW YORK STATE
Attorney General's INFORMATION & COMPLAINT LINE:
1-800-771-7755
-------------------------------------------------------------
HOW TO HANDLE PROBLEMS WITH A CONDOMINIUM'S BOARD OF MANAGERS
Sometimes owning a condominium can present problems. Not only can
your neighboring unit owners cause you concern, but the Board of
Managers can be difficult to deal with, too. This pamphlet is
intended to address the questions most frequently asked of the
Attorney General's office by New Yorkers who live in condominiums
regarding problems with their Boards of Managers.
-------------------------------------------------------------
Q. I'm confused about bow much power the Board of Managers of
my condominium has. What can it do and what can't it do? Are
there any legal standards it must meet?
A. Boards of Managers in condominiums have two basic legal
obligations. The Board must follow the condo's internal
rules (as set forth in the by-laws, the condominium
declaration and the house rules). It must also exercise
prudent business judgment in making decisions, just like any
other corporate board.
--------------
Q. Where can I find the condominium's internal rules?
A. Copies of the original by-laws and declaration (plus house
rules, if any) can be found in the offering plan that was
distributed when the building first converted.
--------------
Q. What if there have been changes in the rules since then?
A. Any changes should be contained in amendments to the
offering plan. But if there are no unsold units in the
building, it's possible that the offering plan is not
current and might not contain an updated version of the
condo's documents.
--------------
Q. If I can't find an offering plan, where can I find the
bylaws and declaration?
A. The Board of Managers is required by law to make copies of
the declaration, by-laws, floor plans, and any rules and
regulations available for inspection in their office.
--------------
Q. What kind of information is contained in these documents?
A. The by-laws, declaration and rules will set forth the
following:
The powers and duties of the Board of Managers.
Dates when annual unit owner meetings and elections to the
Board of Managers are held, and how notice is given.
The number of seats the sponsor can have on the Board of
Managers and when the sponsor must give up control.
Whether unit owners have the right to call extra or special
meetings (a very valuable right if you wish to ask the board
to focus on particular matters).
The quorum for voting.
Sublet provisions although, generally, there are no
restrictions.
How the declaration can be amended (including percentage
required).
The method of adopting or amending rules.
The procedure for amending the by-laws.
The restrictions on the use of units and common elements.
The obligation to repair.
Pet restrictions, if any.
--------------
Q. If something isn't specifically addressed in these
documents, can the board do whatever it wants?
A. No, there are legal restrictions. The Condominium Act is the
New York State law which governs the establishment of
condominiums. The decisions made by courts in cases
involving the Condominium Act are the case law which
interprets the statute.
--------------
Q. Where can I find a copy of the Condominium Act?
A. The Condominium Act is Article 9-B of the Real Property Law,
which is published as volume 49 of McKinney's Consolidated
Laws of New York Annotated ("McKinney's"). It can be found
in law libraries, many lawyer's offices and in certain
public libraries. Included in Article 9-B of volume 49 are
brief descriptions of case decisions.
--------------
Q. What does the Condominium Act provide?
A. Important provisions of the Condominium Act, and the
sections in which they are found, include the following:
Requirement that unit owners comply strictly with the
bylaws, regulations, resolutions, and decisions of the
condominium. Failure to do so is grounds for a lawsuit for
money due, damages, and/or an injunction by the Board of
Managers or by an individual owner. (Section 339-j).
Declaration that the common interest appurtenant to each
unit shall remain permanent, and subject to change only with
the consent of all unit owners affected. Any such change
would necessitate amending the declaration. (Section 339-
i[2]).
Provision that expenses will be charged to unit owners
according to their respective common interests, with
specific exceptions.(Section 339-m).
Copies of the declaration, by-laws, floor plans, and any
rules and regulations shall be available for inspection in
the office of the Board of Managers. (Section 339-q).
Contents of the by-laws (Section 339-v):
election of managers and terms (with at least one-third
ending annually);
powers and duties of the board;
method of removing members of the board, election of
the president, secretary and treasurer;
operation of the property, including hiring and firing
of employees;
adoption and amendment of rules;
amendment of by-laws by at least 66 2/3% of unit
owners;
restrictions on use of property (units and common
elements).
Detailed records of receipts and expenditures must be kept
by the board and made available to owners. A written report
must be rendered annually. (Section 339-w).
Right to file a lien for unpaid common charges (may be
exercised by any member of the Board of Managers). This is a
key provision if a sponsor has defaulted on its payments.
(Section 339-aa).
--------------
Q. What's the best approach when the Board of Managers is not
complying with either the Condominium Act or the
condominium's own declaration, by-laws or rules and
regulations?
A. A unit owner should point out this lack of compliance, in a
tactful way, expressing the expectation that the matter will
be corrected. Sometimes this is all that is needed to solve
a problem.
--------------
Q. What if the board won't respond to an oral request?
A. You should write a letter to the board. It should be
factual, brief and not hostile. Keep copies of any letters
that you send, and notes of telephone conversations (date,
time, who called whom, and the gist of the conversation) in
case the matter is not quickly resolved.
--------------
Q. Should I do this on my own or get together with other unit
owners?
A. An attempt to influence the board is always more persuasive
if it is presented by a significant number of unit owners.
If your problem is one that will affect others too, it is
worth organizing the other unit owners. If you do, and the
attempt to change the situation is not successful, the
organized group can always seek to elect new managers at the
next annual meeting.
--------------
Q. What if the board still doesn't respond to my complaint?
Should I hire a lawyer?
A. If the situation is serious enough, you may want to retain a
private attorney. However, the following should be kept in
mind:
It is a good idea to select someone with experience in
handling condominium unit owners' problems. You could
begin looking for an attorney by talking with unit
owners in your condo or other condos or with attorneys
in other specialty areas. If this fails, you may wish
to contact a local Bar Association for referrals.
Some lawyers will not charge for a single initial
consultation or will charge only a minimal fee.
Most lawyers will attempt to resolve any matter through
negotiation before considering litigation, as
litigation is costly and usually lengthy. Litigating
against the board of a condominium, people with whom
one lives, can also be very unpleasant.
--------------
Q. How long can a sponsor control the Board of Managers?
A. Condominiums are generally established by a sponsor which
files an offering plan with the Attorney General's office
and then can sell condo units to the public. When the
condominium becomes effective (established), the sponsor
usually owns most of the units and thus controls the Board
of Managers. In most cases the Attorney General requires
sponsors to promise, in the offering plan, that they will
give up their control of the Board of Managers after they
sell over fifty percent of the common interest, or after
five years have passed since the closing, whichever comes
first.
--------------
Q. What does giving up control of the Board of Managers
actually mean?
A. It means that the sponsor cannot designate or nominate the
majority of the managers. But a sponsor is not prevented
from voting its percentage of common interests for unit
owners who have similar views, as long as the unit owners
are not on the sponsor's payroll or otherwise given money by
the sponsor.
--------------
Q. How can the Attorney General's office help me?
A. The Attorney General's office regulates the offer and sale
of real estate securities (which includes condominium units)
by the sponsor. If the sponsor of the condominium is still
controlling the Board of Managers or is not keeping the
commitments which it made in the offering plan, the Attorney
General's office may intervene on your behalf.
--------------
Q. How should I contact the Attorney General's office?
A. Send a letter to: Real Estate Financing Bureau, New York
State Department of Law, 120 Broadway (23rd floor), New
York, New York 10271.
-------------------------------------------------------------
We hope that the above answers have been helpful in figuring out
solutions to problems with a condominium's Board of Managers.
However, keep in mind that if serious problems arise, which the
board is not addressing, such as a sponsor failing to pay common
charges on unsold units, it is important to act swiftly. Often
such problems can be resolved, relatively simply, if unit owners
organize and act right away.
Remember that members of condominium boards are usually other
unit owners who are serving without pay. They generally want to
resolve problems and keep peace in the building or development.
Good luck!
G. OLIVER KOPPELL
Attorney General
State of New York
August 1994
-------------------------------------------------------------
ATTORNEY GENERAL'S INFORMATION & COMPLAINT LINE:
1-800-771-7755
OFFICES OF THE ATTORNEY GENERAL
The Capitol
Albany, New York 12224 (518)474-5481
120 Broadway
New York, New York 10271 (212)416-8122
For the Hearing/Voice Impaired 1-800-788-9898
REGIONAL OFFICES
59-61 Court Street, 7th Floor
Binghamton, New York 13901 (607)762-1013
65 Court Street
Buffalo, New York 14202 (716)847-7184
300 Motor Parkway
Hauppauge, New York 11788 (516)231-2400
211 Station Road, 6th Floor
Mineola, New York 11501 (516)248-3300
Adam Clayton Powell Jr.
State Office Building
163 West 125th Street
New York, New York 10027 (212)961-4475
70 Clinton Street
Plattsburgh New York 12901 (518)562-3282
235 Main Street
Poughkeepsie, New York 12601 (914)485-3920
144 Exchange Boulevard
Rochester, New York 14614 (716)327-3240
615 Erie Boulevard West
Syracuse, New York 13204 (315)448-4848
207 Genesee Street
Utica, New York 13501 (315)793-2225
317 Washington Street
Watertown, New York 13601 (315)785-2444
19 Court Street, Suite 200
White Plains, New York 10601 (914)997-6230
-------------------------------------------------------------