With Disgruntled Shareholders, Be Prepared for the Unexpected

Helene Hartig, Founder and Owner, Hartig Law

The backstory. In the midst of the pandemic, a shareholder started walking her dog inside the co-op’s courtyard and refused to stop doing it even after receiving a cease-and-desist letter from the board. Many incidents happened afterward. She was extremely abusive to the doorman. She claimed that the board locked her out of her apartment and had a locksmith come, who then billed the building $1,500. She also claimed that the board president’s husband had sexually harassed her. She then filed a complaint with the Division of Human Rights, saying she was being discriminated against.

Unexpected twist. Fortunately, the co-op board had all the paperwork documenting the disputes step-by-step and how the board and the managing agent had responded, so it was able to refute her claims. And then, in the middle of all this, the shareholder died and her apartment was sold. Even though she is deceased, the discrimination claim is still being pursued by the city.

The takeaway. We’re optimistic that the claim will be dismissed, but what happened was a kind of wake-up call for the board. Even if you do everything right, you can’t prevent a disgruntled shareholder from filing a discrimination complaint with the city. So you need to make sure your rules are publicized, and you need to keep detailed records whenever there is a dispute.