"Does the past non-compliance supersede the By-Laws?

Not in my opinion. The By Laws state that the AM must be held.

Since management does not actually have an opinion letter (because I believe it would be unethical for any attorney to put this in writing), then management legally has no opinion that can be upheld.

Past inappropriate behavior does not negate the validity of the By Laws.

I agree with Marty that sections of the Bylaws are not negated simply because they've been ignored for X number of years. That being said, there may be cases where it is permitted that we don't know about, so best to check with an independent attorney.

I found this article written by an attorney which may help.
https://www.brickunderground.com/co-ops/my-board-doesnt-follow-the-rules

This article has as complete a description of the ins and outs of co-op annual meetings as I've seen online. I hope it helps.

https://cooperator.com/article/same-time-next-year/full

Both Marty and Steve try to be as helpful as they can. I believe both of them are acting board members. The problem is when you have a bad board they do not adhere best practices. The fragil egos prefer to do as they please. So yea if the people are normal reasonable people you can reason with them. If they are not reasonable then you can't. Plain and simple there are no laws to protect you unless you want to spend 50 thousand in litigation to make them play fair. After that they will be certain to make your life miserable. That is why any attorney you speak with will tell you to just sell. It is a loose loose situation. I hope the whole corrupt co-op market collapses. I also hope my old co-op building collapses with all 5 board members and the 2 MAs in it. I am not joking when I say that either, I would do the happy dance on their graves!

In the theoretical situation you described, my very theoretical and non-legal opinion is that you should immediately notify the board's attorney. Don't take it upon yourself to decide how to proceed because you may be entering a minefield of conflicting and ambiguous requirements and prohibitions.

If you think the co-op's attorney is a party to the theoretically questionable activity, I'm not sure where you would start. Try looking on the Attorney General's website for a place where you can report suspected questionable attorney activity.

What if the Board is informed by a shareholder via email that another shareholder is engaged in illegal activity in the apartment, or a shareholder is making illegal no permits) renovations. Can authorities be notified?

I agree with Steven's advice about contacting the co-op's attorney. He will ask what proof do you have of criminal activity.

So, before you contact the attorney, you need to be able to specifically provide examples of what illegal activity is taking place in the apartment. You'll also be asked how do you know the shareholder has no permits.

Steven is correct when he advises you to tread lightly. An email from a shareholder claiming there is illegal activity is not proof of wrongdoing.

Knowing it and proving it are 2 different things.

Good luck.

I'm sensing here that there are two separate issues being questioned - illegal and unauthorized.

If the board becomes or is made aware of illegal activity such as growing pot, cooking methamphetamine, prostitution, financial "boiler room", etc, the board's attorney should be notified immediately so she/he can notify the the authorities. If, in the opinion of the board the illegal activity represents an immediate danger to shareholders or the building, in my opinion the police should be contacted immediately.

If the activity is simply unauthorized, like the example given of unapproved or undocumented alterations, the board has the power to assess the situation and unilaterally shut it down. The board can enter the apartment without permission if they believe an unauthorized activity is taking place. If there is no immediate danger (such as an unlicensed plumber making a gas hookup), the co-op's attorney should be contacted first if possible. If someone smells gas or other fumes, safety is the primary concern.

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Hi - You may be OK in tha coop has waived it rights in your case by not acting sooner. On the other hand, , a "niece" may also not be a close enough family member. There was just a case/lawsuit about this where the owner of the apt. basically won due to "ambiguity" in the lease bout who could / can reside in the apt. . You should get a lawyer and have them write the coop a fierce letter bout how they have waived their rights and the situation is ambiguous. Also, a Hour Rule is different than the lease. Did they actually change the lease? That requires a shareholder vote.
The case: 221 Middle Neck Owners Corp. v. Paris

Generally speaking, the terms of the Proprietary Lease supersede any House Rules. If the two are in conflict, the PL is the governing document.

I read through the case cited by another poster (221 Middle Neck Owners Corp. v. Paris). Any time a decision uses the word "ambiguity", the results are not going to have a happy ending.

Your best bet in this situation is to contact an attorney for an opinion and advice on what your options are and how to proceed. Do not try to be your own attorney, write any fierce letters, or do anything to antagonize the board. They hold most of the power, courtesy of the Business Judgment Rule, and really, all you want is to have your niece to continue living in your apartment as before.

Rules made to counter the encroachment and illicit subletting of AirBnB tend to carry a lot of weight. If your niece's occupancy termination is collateral damage, it's a shame, but it may be reality. I checked my Proprietary Lease and nieces and nephews are not listed as permitted family members.

Perhaps you could post the verbatim text of the new House Rule. That might help us come up with some creative ideas.

Good luck!

As per Steve sad but true, the sad part is you have to get a lawyer. As time goes on I find some boards get carried away with power an as boards do not change because share holders have something more important to do. As the old saying goes if one share holder tries to pull something off all the share holders get punished. Do you know if other share holders got a letter and if so maybe you can get together and all higher one lawyer to fight for all. Best of Luck

This is very good advice. I'd like to see the wording of the House Rule to try to figure out if the board is being arbitrary or if they're making an honest attempt to control what they feel is an epidemic of very short term and questionable rentals. In my Proprietary Lease, the list of recognized family members is in paragraph 14.

The original applicable part of the lease says:
The lessee shall not, without the written consent of the lessor, occupy or use the apartment, or permit the same or any part thereof to be occupied or used, for any purpose other than as a private dwelling apartment for the lessee, the family, employees and servants of the lessee........

1. The occupancy policy statement from the board says:
Family members enumerated in the lease may occupy an apartment when the shareholder is also in residence without the prior consent of the board.
2. If the shareholder is not in residence of the apartment, family members other than the Shareholder's spouse will require prior Board consent to occupy the apartment.

There are several more restrictions that followed.

I read through my proprietary lease. It looks like yours is different than mine, in that mine enumerated who is considered a family member (paragraph 14):

"14- The Lessee shall not, without the written consent of the Lessor on such conditions as Lessor may prescribe, occupy or use the apartment or permit the same or any part thereof to be occupied or used for any purpose other than as a private dwelling for the Lessee and Lessee's spouse, their children, grandchildren, parents, grandparents, brothers and sisters and domestic employees, and in no event shall more than one married couple occupy the apartment without the written consent of the Lessor."

It's possible that your board used this list as a guide for who is considered a family member for the purpose of the new House Rule. Check your PL to see if there is any list of included family members.

My Co-op charges a monthly fee for sublets. It is on a per-share basis, but since maintenance is based on the number of shares, it is roughly equivalent.

There are a number of reasons why co-ops charge a sublet fee. Probably the most significant is to discourage sublets. A sublet puts extra work on the board and managing agent to make sure that the strangers being granted access to the building do not present a security and safety risk, and will fit in well with the rest of the shareholder community.

Too many sublets make it difficult for shareholders to sell or refinance their apartments because banks use the number of concurrent sublets as one of the factors in deciding to approve or reject a mortgage.

Sublets cost money in terms of extra paperwork and bookkeeping for the MA, credit and background checks, interviews, etc. The fee helps to recoup some of these expenses.

These are the reasons why most co-op charge a sublet fee, impose a time limit (usually 2 years) on the length of a sublet, and have a limit on the number of concurrent sublets.

If the board allows an existing shareholder to use a vacant apartment during a renovation, almost all of the reasons for discouraging a sublet vanish. The shareholder's character is already known to the board, the duration of the sublet is usually very short, and almost no additional expenses are incurred by the co-op or MA.

Is is allowable/equitable/legal? In my opinion, absolutely. First, in my opinion it is both allowable and legal. Subletting to an existing shareholder without a fee does not create a new class of co-op shares, which is prohibited under co-op regulations. I'm assuming that either the co-op owns the shares of the vacant apartments or that the shareholder-owners have given permission. I don't believe a board can force the owner of a vacant apartment to sublet to another shareholder or anyone else.

Is it equitable? I believe the Business Judgement Rule gives a co-op board the power to waive fees like the sublet fee if they feel it is appropriate to do so. It might be a different story if the board waived the sublet fee for some sublets to external tenants and imposed the fees on other sublets to external tenants. That would be a question for an attorney, or maybe someone else on here knows the answer. There may be finer points to the definition of a "sublet" I'm not aware of.

I hope this helps.

Roughly put, a conflict of interest exists when an individual stands to receive a personal gain due to a decision they make or an action they take in an official capacity, without disclosing their potential personal gain to the rest of the official decision-making body.

First, a clarification. Shares in a co-op are *not* a deed to the apartment. Condominiums have deed and title. If you're talking about a condo (you mentioned the individual not being on the "deed") and not a co-op, please don't read any further because what follows doesn't apply to you.

In answer to your initial question, think of any public corporation. Only shareholders can vote at the annual shareholder meeting, but non-shareholders can be elected to and sit on the board of directors. They often are to get a diversity of opinions and expertise.

Votes are tallied based on the number of *shares* owned, not the number people or other entities (i.e. trusts, estates, etc) who own the shares or live in the apartment. An individual apartment may be allotted 100 shares. It doesn't matter if a single individual owns all 100 shares, if a couple own all 100 shares jointly, if four casual friends each own 25 shares, or if the estate of a deceased shareholder owns all 100 shares, they still have only 100 votes.

Please understand that what I've written is not a legal opinion or advise, because I am not a lawyer. To get a definitive legal opinion you need to consult with an attorney.

I hope this helps,
--- Steve

Well said Steven. You stated everything clearly and correctly.

:-)

Thanks, understood

I am definitely not an attorney, and the value of an "legal advice" your receive on here is worth exactly what you pay for it. But I'll give it a shot.

Members of a board of directors have a fiduciary obligation to put the interests of the co-op corporation and it's shareholders ahead of any personal gain. The most common examples of conflicts of interest usually involve boards hiring or giving contracts to companies they have a financial interest in and can reap benefits from payments to the contractor or company.

The sale of co-op shares is usually a private transaction between the current owner of the shares and the prospective purchaser. The board is usually not involved in any of the price negotiations.

Once the contract is signed, the board should only become involved in ways designed to protect the co-op corporation and the shareholders. To protect the co-op corporation, the board reviews the ability of the purchasers to meet their current and future financial obligations (i.e. monthly maintenance and assessments). If there are any concerns during the financial review, there may be discussion between the board and the purchaser to put in place protections for the co-op corp. These are usually in the form of a maintenance guarantor, or holding a certain number of month's worth of maintenance in escrow. Each situation is different.

To protect the shareholders, the board usually does a background and credit check on the purchasers. They may ask the purchasers questions such as "do any of the occupants play loud musical instruments" or "do any of the occupants have any sort of diplomatic status or immunity". There are a lot of restrictions on the kinds of questions a board can ask. At the purchaser interview, the board does a final reality check on ability of the purchasers to integrate into the co-op community.

From what you describe, the board should not have been involved in any price negotiations between the owner of the management company and the estate's executor/administrator. In particular, the estate executor/administrator has her/his own fiduciary responsibility to the beneficiaries of the estate, and will have to answer to them if she/he sells the shares at below market value. Now, if the executor/administrator was somehow informed that the board would block the sale of the estate's shares unless they were sold to the managing agent at the price demanded, that would not only be a conflict of interest, but probably also be extortion or some other criminal activity.

There is no requirement that apartments for sale have to advertised, and all sales transactions are private by nature. So if the board were on the up-and-up, and the owner of the management company negotiated in good faith with the estate, then as far as I can tell there is no conflict of interest.

Remember, this is not any sort of legal advice. Based on what I wrote, if you feel there is a conflict, you should do a google search to see which NYC department could deal with your concerns. I don't know which exactly, but a good place to start would be attorney general's office. If you feel that you and/or your apartment ownership may somehow be harmed by what you described, than you need to contact an attorney who specializes in co-op and real estate law.

I hope this helps. Good luck!

I agree with Steven, but my first question is why did the Board approve all of these sales when they were way below market value? What was the rationale? This is a valid question IMO.

Were the estate apartments on the market for 5 years or longer and the estate just wanted to get rid of them? The Board needs to explain these decisions to its shareholders.

To me, there should be no issues if the sale of an apartment is between a buyer and a seller who have no relationship with each other.

For all other situations (Sale involves Mgt company, Board member, etc), I see a potential can of worms for Board members because they are not "arms length" transactions.

Even though technically it may not be a conflict of interest as defined by law, it certainly raises questions about the transactions and how they were made.

The purpose of the COI law seems to be to make sure that no Board member profited by the hiring of any contractors and the like.

Even though this new law concerns itself with COI, I can see disgruntled shareholders (we all have experience with them) using this new law as a general path to start digging into other Board decisions/actions not supposedly covered by the COI.

I can imagine shareholders questioning ALL Board financial decisions under the guise of "was there any COI involved" even if no contractors were involved in a particular decision - simply because they don't approve of the a specific expense authorized by the Board.

An honest Board will have nothing to fear/hide, but I see a potential for a humongous increase in our workloads and aggravation.

I hope not, but we'll have to see how this new law affects our daily decision making processes.

I think it would be very unlikely (but I may be wrong) that there are any real estate or other tax abatements available to co-ops from NYC simply because there was a capital improvement. If there were, every co-op in NYC would be the epitome of modernization and NYC would be bankrupt due to the loss of revenue from its favorite piggy-bank, Class 2 buildings.

The only tax savings I am aware of for capital improvements is the waiving of sales tax. Make sure your managing agent gets the proper forms signed by your contractor.

If you do apply for such an abatement and you receive it, I implore you to post the details on here so we can all take advantage of it! :-)

thank you Steven. Class 2 buildings are taking a tax beating - year after year! What can be done?

As the late, great, Yogi Berra would say, "Vote 'da bums out!" :-)

In the same vein as dealing with lousy co-op boards, the only effective way of getting real tax relief is by electing more sympathetic politicians. Not expecting it in my lifetime, though.

I am not a lawyer and this is not a legal opinion, but I believe you can. It's my understanding that there is no expectation of privacy in common areas.

There are some limitations, though. While you can record video, you can't record audio. In terms of the law there is a difference between the two.

You can't aim the camera so it can view the interior of an apartment when the door is opened. Apartment interiors are not common areas.

You may find this article helpful: https://cooperator.com/article/the-state-of-surveillance/full#cut

Also check the Habitat Magazine archives. Over the years they've run articles on Privacy Protocols and other surveillance topics.

I hope this helps.

Thanks Steve, very helpful.

You're welcome.

Excellent response Steven! As a protection professional, I couldn't have explained it better. Happy123, Steven's advice is right on the money.

My only thought is why didn't the co-op notify the shareholders of the cameras? Doesn't the co-op want the shareholders to know?

Are the cameras supposed to be spying on people, or are they there for protection and identification in case of criminal activity?

Marty - I would agree with you about notifying shareholders, but maybe the reason for installing the cameras and not notifying the shareholders is because a shareholder is suspected of malicious activity in a common area. If the shareholder is alerted, s/he may move their maliciousness elsewhere and then it becomes a game of cat and mouse.