Conflict of (Love) Interest

The super and the board president at an Upper West Side condo have become romantically involved. The president, hoping to avoid any conflict of interest, has offered to be recused from decisions involving the super, who is the building’s only employee. A unit-owner asks: “Can this relationship continue with these two in their current positions?”

There’s no end to the possibilities for conflicts of interest in the running of co-ops and condos. State law acknowledges that there may be conflicts of interest involving directors of corporations and the people who deal with corporations, replies the Ask Real Estate column in the New York Times. The law encourages directors to disclose potential conflicts of interest and abstain from voting on matters that involve them, and these rules generally apply to condos.

The president’s cozy relationship with the super could “run afoul of these rules,” says attorney Phyllis Weisberg, a partner at Montgomery McCracken Walker & Rhoads. A board president is supposed to avoid even the appearance of a conflict of interest, she adds, so as to protect the legitimacy of the co-op’s decision making.

Let us count the ways this arrangement could go south. Suppose the super wants to hire additional staff or make costly repairs. Even if the president abstains from voting, other members might be reluctant to reject a request from the president’s lover. Or, conversely, they might be more tight-fisted, so as not to appear biased. Residents might be reluctant to report complaints about the super, given the romantic circumstances. What happens if the couple breaks up? There could be retribution.

“A situation like this could render the board dysfunctional,” says Weisberg, adding that the way to avoid this is for the president to resign.