Habitat answers: Reeling in an errant condo owner takes time, patience, and knowing the laws that govern the building. Part of the problem is the perception of condo owners that, because they own their units outright, they own all the available common space in the building, too.
Under the New York State Real Property law — which governs the use of common space in condos — “each unit-owner shall comply strictly with the bylaws, rules, and decisions adopted pursuant” to the condo’s creation. Any failure to comply can lead to “damages and injunctionable relief.” That means that if she gets out of hand, the condo can sue her.
The bottom line is that by trying to take over any of the common areas, the unit owner is violating the declaration of the condominium, and the covenants that run with the deed and the proprietary lease. That's a big no-no.
The first thing the board should do, therefore, is to talk with the unit-owner. Point out clearly and firmly that common areas cannot be usurped by any individual.
If she refuses to listen to reason, then you can have the condo's attorney send her cease-and-desist notices, explaining that if the behavior doesn't stop, the condo will take the unit-owner to court.
A second course of action is to warn her that the board is prepared to write to the bank that holds her mortgage, and tell it that she is usurping property that by law doesn’t belong to her. If that also fails, the board will need to decide whether to file papers to take over her mortgage and start the process to get her out of the building — which the board can do if it shows it has good cause.
It doesn't need to go that far, but you should impress on your fellow board members that sometimes being too nice and lenient can land you in hot water. You have to be strict about these things, because as you correctly suspect, it can escalate to something bigger.
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