Both board members should recuse themselves from the sales application. The parent, obviously, and the family friend because a personal and longstanding relationship exists.

Regarding your pet policy...do your rules state clearly NO PETS or do they define the pets. I.e. some buildings allow cats but not dogs. If your rules clearly say no pets whatsoever, regardless of how long the cat will last, they shouldn't submit an application. By allowing the application and/or pet, you will be setting a precedent.

Thank you for the confirmation!

The board can make an exception and allow the cat if it wishes -- it's not like a court of law where it sets a legal precedent.

There may be political or policy questions, but that's different from law. If the board can provide a justifiable reason for making an exception, e.g., it's a quiet indoor pet with likely little time to live, then it can do so under the Business Judgment Rule.

The idea of setting a legal precedent does not apply within the corporate boardroom.

JB, I presume you're not proffering this as legal advice...

if the Board has a no-pet policy, then makes an exception for one "connected" individual, that opens a whole 'nuther can of worms.

And that'll set a precedent, for sure.

Althouth I would be tempted to vote for the anamial, RLM is right, if I lived in your building, and you allowed a pet, I would run right out and adopt a puppy. Also, there is the favortism issue.
You will undermind the house rules and set a precedent.

We allow pets, limited to two, and believe that it fosters a much more neighborly building. I have watched people become happier, social and friendly after adopting a pet.
VP

I'm not sure my fellow board-members read me carefully.

I did say there would be political ramifications if you made an exception.

But I reiterate: There would be NO LEGAL PRECEDENT. A corporate board is NOT a court of law. ONLY COURTS set legal precedent. A corporate board CAN make exceptions if, in its view, there are legitimate reasons for doing so.

One person here sarcastically asked if I a offering legal advice. There's no need for sarcasm, particularly over semantics. I'm repeating what attorneys have said in print. Is that legal advice? Well, it's about the law. And you could call it advice or suggestion or, as I would, reportage. Being sarcastic muddies the issue, which is only necessary to do if one can't make one's point with logic.

Anyway, we're getting off-point. A board is prefectly entitled to make an exception for -- depending on the case, and not necessarily speaking of this case in particular -- humanitarian, long-term, emergency or strategic reasons, along with a half-dozen other valid reasons any reasonably intelligent person could name.

Will there be policy repercussions? That depends, as much of politics does, on how you present it. And in the case of an elderly cat -- which, unlike a dog, doesn't bark -- I can imagine being able to make a case based on compassion. That's a component of what is called, seriously, in legal terms "good will" -- which is so tangible a component that for tax and valuation reasons, it is considered part of a corporation's worth.

And even aside from this, a corporation needs flexibility to make nimble decisions. I'm not sure if affects the corporate bottom line any more to say "euthanize your quiet cat" than to say "we're making an exception on compassionate grounds." (Of course, if you have a howling cat, thereby interfering with neighbors' "quiet enjoyment" of their domicile, then you certainly have a hard decision to make on quality-of-life grounds.)

No good corporation lasts with rigid inflexibility. That's been the downfall of many a company.

While I agree with you in principal I must say that my years of experience in this industry would lead me to not make an exception. I have been a victim/sacraficial lamb many times over for using what I call common sence. Unfortunately the saying no good deed goes unpunished is all too common in this industry. I respect your compassion here but sad to say the world we live in has changed for the worst.

MRM

If it's a policy, there is no precedent.
If it's in the bylaws or property lease, there is one.

One must ask himself what is intended with a "no pet policy": noise, odors, hygiene ...
And what does pet include: dog, cat, a golden fish or bird.

You can't reject an application because of a pet. You have no way of defending this decision in front of a judge ... should the applicant go that far.

SaL states that an applications cannot be denied because of a pet! The Corp policy states No Pets, so if the applicant has a pet of any age/condition and wishes to bring it with them-why can't the Board reject?

RE: >> "If it's in the bylaws or property lease, there is [precedent]."

I don't know how else to say this: NO, there is NOT.

Corporate boards are NOT courts of law. Only courts of law can establish legal precedent. Co-op boards are not courts! Only courts can set precedents! How much more simply can this be explained?!

The board CAN reject. The point is, it isn't REQUIRED to reject. See my just-posted response to CDT.

Bear in mind, I'm someone who likes living in a no-dob building, so I'm not arguing from the standpoint of a pet fanatic. I just hate seeing armchair attorneys talking about "precedent" without fully understanding what it means. Too many episodes of "Law & Order," I guess.

This gets me curious, though, as to why a blanket no-pets policy. I'm wondering what the rationale is to ban goldfish, hamsters and turtles, say, not to mention cats, which for all their faults are usually quiet and don't need to be taken out on the grounds or elevators. But goldfish? Really?

Above should read "no-dog building," not "no-dob building." Which is funny, since "dob" is the initials of the Department of Buildings...!

I believe all these legal issues began many years ago when an older grey bearded man had two of each animal as pets on his property. He kept them even during times of heavy rain and floods.

Noah

For goodness' sakes, get over yourselves. A co-op board is not a court of law. It's a board room. You are not setting legal precedents even internally.

So why post the question in the first place. All people did was take time out to try and help. Am I missing something here.

Bob

Because it's factually incorrect to say it sets "a precedent," and gives bad, bad advice to the person who asked. Self-important board members act like they're Supreme Court justices and their decisions set "precedents." We're corporate boards, and a good corporate board is nimble and flexible and deals with individual situations in the best long-term interests of the corporation.

We are ALLOWED to make exceptions when need be. All we have to do is justify them on reasonable grounds, and if need be deal with the political fallout, if any.

And in this particular case, the thing to do is make an exception based on compassionate grounds. If the cat in its dotage then starts howling (which the initial questioner did not indicate was the case), then it becomes an issue of noise that would be dealt with the same as with someone's noisy TV. All these people saying, "No, no, no! That would set a PRECEDENT!" are giving bad, factually inaccurate "advice." I don't think there's anything there's anything wrong with thinking before we speak, or maybe doing a little research before giving advice.

So I guess you just answered your own question then? Best of luck with whatever you decide

Bob.

West City Board Member originally wrote:
>Finally, the son has a cat (old-not going to last
>too long-so they say) but we have a no pet policy.

This statement precipitated one of the odder discussions I've seen on this board in awhile. A few comments:

(1) You are completely within your rights to reject the application on this basis alone. You have a No Pets policy and the guy has a pet. What could be more clear-cut? Other than the 14 protected classes we all know about, you can reject an application for any reason whatsoever, so long as you're consistent.

(2) On that note, consistency is the key. If you let in some people with pets but not others, and you have no clearly defined standards, you're in trouble. You will effectively render your pet policy unenforceable because you're required to treat everyone even-handedly, and you're not.

(3) Once you let in one pet for a vague reason (not a medical one), you've set a precedent. Yes, a precedent! No, JB, of course not a "legal precedent" in the sense of a formal legal decision, but a precedent in the colloquial sense: "An example that is used to justify similar occurrences at a later time." If you let in one guy with an old cat on the grounds of compassion, you've just set a precedent *for your building* and you're stuck with it.

(By the way, our building has never had a No Pets policy and is not considering one.)

If a "precedent" isn't a "legal precedent" then it HAS NO FORCE OF LAW.

If it has no force of law, then you are NOT stuck with it.

I know most board members haven't previously served on corporate boards -- which is what a co-op board is -- but a board is allowed to, and often does, make nimble, flexible decisions that can involve reasonable exceptions to past policy.

Then it becomes a political issue -- but it's not a legal issue.

As long as the board can show it's acting in the best long-term interests of the corporation, is not enriching itself, and it not arbitrarily favoring one shareholder over another, "A board can decide to not enforce a rule," according to attorney Joseph G. Colbert, a partner at Kagan Lubic Lepper Lewis Gold & Colbert, and an adjunct professor at St. John's University School of Law, quoted right here on the Habitat site. Speaking about house rules and bylaws that the board passed, and not amendments to the article of incorporation, "the board, like any political body, can interpret when these rules can be enforced, subject of the approval or disapproval of the residents."

Just because a board gives exception to a quiet, aged cat on defensible grounds doesn't mean it's legally required to allow someone to keep three snarling pit bulls.

JB wrote:
>If a "precedent" isn't a "legal precedent" then it HAS NO FORCE OF LAW.

Who's talking about "force of law"? We're talking about the requirement to treat all shareholders even-handedly.

>If it has no force of law, then you are NOT stuck with it.

Of course you are. From the moment you allow one shareholder to move in with an aging pet for compassionate reasons, every new shareholder from then on will demand exactly the same exception for *their* aging pets. And they will be correct to do so.

>I know most board members haven't previously served on corporate boards
>-- which is what a co-op board is -- but a board is allowed to, and often
>does, make nimble, flexible decisions that can involve reasonable
>exceptions to past policy.

Yes, reasonable. And consistent. And not arbitrary. If you make an exception, you're implicitly agreeing to make the same exception for other shareholders in the same circumstances.

>Then it becomes a political issue -- but it's not a legal issue.

But it *becomes* a legal issue if someone challenges the decision for being capricious and arbitrary. ("You let in his aging pet; now you gotta let in mine!")

>As long as the board can show it's acting in the best long-term interests
>of the corporation, is not enriching itself, and it ***not arbitrarily
>favoring one shareholder over another,***

Aha! You found it! If you allow one person to move in with an aging pet, but not ALL such people, you are indeed "arbitrarily favoring one shareholder over another."

>"A board can decide to not enforce a rule," according to attorney
>Joseph G. Colbert, a partner at Kagan Lubic Lepper Lewis Gold & Colbert,
>[...] "the board, like any political body, can interpret when these rules
>can be enforced, subject of the approval or disapproval of the residents."

Sure, absolutely true. But as you yourself noted above, the board can't arbitrarily favor one shareholder over another when deciding whether to enforce a rule.

>Just because a board gives exception to a quiet, aged cat on defensible
>grounds doesn't mean it's legally required to allow someone to keep three
>snarling pit bulls.

Naturally. But it does mean you're going to be stuck with allowing quiet, aging cats because you've set that precedent. And from a practical standpoint, I'd guess you're going to start getting complaints from people who want to keep quiet, aging dogs as well.

On top of all this, the original poster noted that the prospective shareholder is the son of a board member. To avoid any appearance of a conflict of interest, the board needs to be exceptionally careful to define precisely why an exception is being made.

First you say

>>Who's talking about "force of law"? We're talking about the requirement to treat all shareholders even-handedly. [If it has no force of law, then you are NOT stuck with it.] Of course you are.

No. If it's not force of law, how can you be stuck with it?

No one can make you stuck with anything unless there's force of law behind it.

And as I've repeatedly said, it's not "arbitrary" if you give a justifiable business reason that doesn't violate the law regarding self-interest, etc. As I've also said good will is a tangible corporate asset.

RE: >>it *becomes* a legal issue if someone challenges the decision

Anybody can sue anybody else over anything. That doesn't mean the law is on their side or that they have a case. I can think of a dozen reasons off the top of my head that two situations with quiet, aging cats could lead to completely opposite decisions. I'm sure you could, too.

Only courts can set legal precedent. Not corporate boards. We're doing a disservice to co-op boards by giving them the false impression that they cannot make nuanced, flexible decisions when need be for the long-term good of the co-op.

I think the best example of that may be the board maybe three years ago that demanded a shareholder remove a small U.S. flag magnet from his door, put up in the wake of 9/11, citing co-op rules. This became a cause celebre that embarrassed the co-op on TV and in national newspapers, affected potential buyers' perception of the co-op, etc. -- all bad things for the long-term business of the corporation. The board eventually came up with -- you guessed it -- a nuanced, flexible response that solved everyone's problems. THAT'S what we should be encouraging boards to do, and not simply make unthinking, kneejerk decisions out of fear of some non-existent "precedent."

I'd love to know what you think of the above example.

I think we should move on to another topic. The horse is dead...

Bob

It's interesting that you bring up the Willoughby Walk case, as it illustrates precisely the points I've been making. The case is pretty much as you describe it: a guy had had a flag magnet on his door for years, but one day the board decided to start enforcing their "No decorations on doors" rule and ordered him to take it down.

Predictable embarrassment resulted. The board knew they couldn't just say, "Okay, THIS guy can have his flag magnet, but no one else can have any door decorations!" This would favor one shareholder over another, which is both intrinsically unfair and a violation of NY BCL Sec. 501(c).

The solution that the board devised was anything but "nuanced and flexible" -- that's exactly what you *don't* want when crafting an exception to a rule. You want the exception to be as unambiguous and precise as possible, since you're obligated to make the same exception for ANY shareholder under the same circumstances. In this case, the board simply grandfathered in any door decorations that were more than five years old. The exception applied to ALL shareholders, as required.

I think we may be saying the same thing at this point, and semantics is getting in the way.

"Nuanced" MEANS "unambiguous and precise." Nuanced is the OPPOSITE of "vague and overly broad."

JB wrote:
>"Nuanced" MEANS "unambiguous and precise."

Hmmm, my sources say that "nuanced" means "possessed of multiple layers of detail, pattern, or meaning."

But in any case, I agree that we've pretty much exhausted the subject for now.

I don't know what source you're using, but Merriam-Webster defines it as

"a subtle distinction or variation"

Which is exactly what I was saying.

When co-op boards react like Pavlov's dogs and don't try to actually, y'know, LEAD by finding Solomonic, nuanced solutions to difficult issues, then they might as well by interns working off a yes/no checklist.

A creative solution for shareholder N is great, so long as the board realizes it will need to offer the same solution to shareholder N+1 under the same circumstances.

That's debatable. We can certainly agree to disagree.