The Onus of the Holiday Bonus

The holidays are upon us at last, which means your co-op or condo board has nearly run out time for doling out year-end bonuses to the building’s staff. This gesture, once a rote formality, has morphed in recent years into a way for many boards to reward meritorious service – and, conversely, to express displeasure with substandard employee performance.

Some residents want to know the size of employee bonuses. One co-op shareholder put it bluntly to the Ask Real Estate column at the New York Times: “Do I have the right to review the books to find this information?”

Boards do not have to enlighten shareholders about their methodology for determining bonuses. Shareholders do, however, have a right to inspect the books and records of the building, and staff bonuses would fall into this category, says attorney Eric Sherman, a partner at Pryor Cashman.

If the board refuses a resident’s request to inspect the books, the rebuffed resident could file a lawsuit compelling the board to act. A condo unit-owner named Brenda Pomerance did just that – in a case that was not inspired by curiosity over holiday bonuses – and she recently won a court order that gives co-op shareholders and condo unit-owners expanded rights to examine board records, including financial statements, board minutes, receipts, invoices and legal documents. And, of course, the size of holiday bonuses.