Why Hasn't There Been a Board Election in Several Years?

Aug. 12, 2015 — My broker told me that there hasn't been a board election in several years. Is something amiss?

Discovering that a co-op has not held board elections in several years is certainly something that warrants investigation. As elections take place at annual meetings, the more significant "red flag" issue would be the absence of such meetings, which generally require a quorum.

Ideally, because a co-op apartment is a significant investment, shareholders would be interested in ensuring a quorum and serving on the board. In many cases, however, if the building is functioning well, and shareholders are pleased with the board in place or with the candidates presented, a board can be voted in by acclamation. That is still considered an election. If the annual meeting lacks a quorum, no election can take place and the sitting board remains. This in and of itself does not necessarily indicate any problems.

However, if there has been no election because of the absence of an annual meeting, there is cause for concern. It is more than likely a violation of the building's bylaws and New York Business Corporation Law and should be remedied.

Michael Mintz is CEO of MD2 Property Group.