Legal Learning Lab: Governance

Amenities/Gyms

The Legal Minefield of Reopening Amenities

Eric Goidel, Senior Partner, Borah Goldstein Altschuler Nahins & Goidel

Host: Bill Morris

The reopening of amenities during the pandemic has touched on numerous areas of the law, but they all boil down to a simple conflict: a board’s use of the Business Judgment Rule in the face of serious pushback from residents. Handling that conflict is the focus of this session.

•          How can boards protect themselves against charges of negligence?

•          What are the ramifications of reopening amenities for building staff and outside contractors?

•          What should be the guiding principle on reopening and regulating amenities?

Is It Gym Time Now?

Marc Luxemburg, Partner, Gallet Dreyer & Berkey

Host: Carol J. Ott

Gathering places are pandemic hotspots, and in many co-ops and condos this means gyms. In this session you’ll learn what is required to conduct gym business safely, and what are the legal risks that boards face when doing so.

•          There are gyms in the basements of older buildings and spiffy ones in newly built condos. What should boards in each of these buildings be concerned about?

•          What are the protections that boards should put in place in both types of buildings?

•          Bottom line, is it legally safe to operate your building’s gym?

Balancing Gym Rules With Disability Requests

Mark Hankin, Partner, Hankin & Mazel

Host: Bill Morris

Many co-op and condo boards have risen to the challenges of reopening their gyms and other amenity spaces — everything from ventilation upgrades to social distancing rules to hiring monitors. This session explores the surprises that can ambush even the best-prepared boards.

•          What should a board do when a person with a disability asks for an accommodation to use the gym?

•          If the requested accommodation isn’t “reasonable,” what are the board’s options?

•          Should expensive discrimination lawsuits be avoided at all costs?

Juggling Amenities and Apartment Sales

John M. Desiderio, Partner, Adam Leitman Bailey

Host: Bill Morris

Many co-op and condo boards have jumped through all the hoops required for the safe — and legal — reopening of their gyms. This session is about a condo board that balked.

•          Should boards require gym users to release the board from liability if the gym user contracts COVID-19?

•          Even if it’s protected from legal liability, what are a board’s up-front costs when reopening an amenity?

•          Does the armor of the Business Judgment Rule protect boards from pushback by shareholders and unit-owners?

Board Challenges

Mitchell-Lama Funding Complications

Karol Robinson, Shareholder, Anderson Kill

Host: Carol J. Ott

Most co-ops and condos are in an endless cycle of repairs, upgrades and city regulation compliance. Underpinning all this, of course, is money. Today, however, Mitchell-Lamas, the co-ops that provide affordable housing to thousands, find themselves in a funding quandary. Why that is so, and what can be done about it, is the focus of this session.

•          What are the traditional funding sources for Mitchell-Lamas?

•          What’s happening now to make funding more difficult?

•          Can’t the private market lend to Mitchell-Lama co-ops?

Transition Smoothing: From Sponsor to Unit-Owner Control

Robert Braverman, Partner, Braverman Greenspun

Host: Carol J. Ott

With a sluggish real estate market, unit-owners in newly built condos or recent conversions may be wondering when the sponsor will relinquish control of their buildings. And on that day, will unit-owners be ready to govern? There are strategies for smooth transitions that many condos have used, and in this session you’ll learn what they are.

•          How long is the sponsor control period, and when does it end?

•          What are ways to navigate the sponsor control period and the time limitations on construction defects?

•          Can a sponsor give up control gradually? If so, what are the negatives and benefits to this?

•          Reserve funds can be contentious in condo conversions. What can be done about that?

The Risk in Making Board Decisions

Lewis Montana, Partner, Levine & Montana

Host: Carol J. Ott

When you sit on your board of directors, every decision you make comes with some type of risk. What that is and how you assess it is the focus of this session.

•          What does risk mean, and should boards be risk-takers?

•          What is a board decision with minimal risk, and one with a lot of risk?

•          Boards are taking many actions during this pandemic period. How can they lower the risk?

•          How does community politics influence a board’s decision to take some risk?

Board Elections

When Virtual Won’t Work

James Glatthaar, Partner, Bleakley Platt & Schmidt

Host: Carol J. Ott

Virtual annual meetings have arrived, but what if it just won’t work in your co-op or condo? There are other options besides Zoom or gathering in person in one large room, and in this session you’ll learn the creative method one co-op used.

•          First, what are the circumstances where a virtual meeting might not be a good idea?

•          Why not just postpone the annual meeting and election?

•          Glatthaar details the creative solution for hosting an in-person annual meeting that one of his clients used.

Statutory Authority: Why It Matters

Stephen Lasser, Managing Partner, Lasser Law Group

Host: Carol J. Ott

Once boards go down the virtual road — holding Zoom meetings and conference calls, sending emails — it’s easy to forget about statutory authority. Don’t do it. In this session, you’ll learn why.

•          If boards are not meeting in person, do they have statutory authority to vote virtually?

•          Does the same authority pertain to both co-ops and condos?

•          What about voting by email?

Candidates to Elections: Running a Tight Virtual Ship

Dean Roberts, Member, Norris McLaughlin

Host: Carol J. Ott

What has the pandemic wrought? Many things — bad, and less bad — but in the co-op/condo world it has ushered in virtual annual meetings. Running them comes in many different flavors, and in this session you’ll learn what works and what doesn’t.

•          Before the annual meeting is held, you have to have candidates for the board. How do you introduce candidates virtually?

•          There are usually lots of questions asked at annual meetings. How is this handled virtually?

•          What are the most important issues for boards considering virtual annual meetings?

Virtual Planning for the Annual Meeting

Marc Schneider, Managing Partner, Schneider Buchel

Host: Carol J. Ott

Running a successful virtual annual meeting requires more than a Zoom account. It takes careful planning, not only to meet corporate requirements but also to take into account the added steps required. In this session you’ll learn what they are.

•          How are the planning requirements for notices, proxies, and candidates different in a virtual meeting?

•          Are there any communities where you think virtual wouldn’t work?

•          Practically speaking, who should run a virtual annual meeting?

When Dissenters Force an Election

Steve Wagner, Partner, Wagner, Berkow & Brandt

Host: Carol J. Ott

When shareholders disagree with a board’s actions, they often attempt to unseat current board members at the annual election. For co-ops that have decided to delay their annual meeting because of the pandemic, dissenters have some options to force an election. In this session you’ll learn what they are.

•          What are the two main options for shareholders who want to force a board to hold an annual election?

•          If aggrieved shareholders want to pursue these options, what’s required?

•          How should a board respond, and what happens if they don’t?

Rules

Creating Safety Plans With Teeth

David Berkey, Partner, Gallet Dreyer & Berkey

Host: Carol J. Ott

The city and state have mandated that buildings create safety plans and that co-ops and condos have to incorporate these into their operations. How to do that, how to enforce compliance and what to do about rule-breakers is the focus of this session.

•          What are the rules that boards need to focus on, and where should they be written?

•          What are the enforcement challenges?

•          And, finally, what are the risks of not enforcing?

Proprietary Lease Updates: Seize the Moment

William McCracken, Partner, Ganfer Shore Leeds & Zauderer

Host: Carol J. Ott

Every co-op board has been advised to update its corporation’s proprietary lease, and many have done so. But with new ways of conducting business because of the pandemic, now may be the time to take a second look. In this session you’ll learn why.

•          What are some of the most important provisions that you think need revisiting now?

•          Updating proprietary leases is a gargantuan effort because you need community buy-in. Does this moment make it easier?

•          Aside from making sure your proprietary lease aligns with current law, what other areas should be codified in this document?

Living With Pets, Like It or Not

Geoffrey Mazel, Founding Partner, Hankin & Mazel

Host: Carol J. Ott

Even though many co-ops and condos have no-pet policies, pets live in these buildings. The reality is that boards have to come to grips with what’s going on today. How to do that is the focus of this session.

•          If no-pet buildings can now have pets, what’s the point of a no-pet policy?

•          What kind of pet policies should these buildings create? And are they enforceable?

•          Does the right to a reasonable accommodation trump a person’s right to not live around pets?

Use Common Sense When Policing Common Areas

J. David Eldridge, Partner, Taylor, Eldridge & Endres

Host: Bill Morris

When residents flout the rules on the permitted uses of common areas, internecine feuds can erupt. Boards often find themselves in a delicate position: they need to be strict and fair in enforcing the rules, but being overly strict can backfire. This session will help boards navigate this tricky terrain.

•          How does a board know when it’s time to take an offender to court?

•          How can flexibility avert an unwelcome outcome?

•          When is it smarter to try to work things out rather than digging in your heels?

SESSION HIGHLIGHT

Track: Governance

Room: Board Challenges

The Risk in Making Board Decisions

Lewis Montana, Partner, Levine & Montana

Habitat: For a board of directors, risk is either financial or legal. Do you think boards should be risk-takers?

Montana: Well, each board has to assess its own community and what kind of risks it should assume. But all boards at some time have to take risks. You have to take into account that boards deal with things more than just a risk-reward calculation. They have to also deal with what you could call behavioral economics. That takes into account the community’s culture, the health and wellbeing of the residents, things along those lines. The board has to assess the community’s tolerance for risk.

Habitat: Give me an idea of a board decision with a lot of risks.

Montana: An elevator replacement contract, which could be very costly for the association. It would be very risky if the board doesn’t have good specifications and plans for that project, and if they don’t have a sufficient amount of qualified bidders or contractors to go in on that. That would be a very risky endeavor, where those behavioral economics come into play.