Page 13 - New England Condominium July 2022

NEWENGLANDCONDO.COM NEW ENGLAND CONDOMINIUM -JULY 2022 13 THE BEST TIME TO FIND AN EXPERT IS BEFORE YOU NEED ONE. BOSTON CONVENTION CENTER THURSDAY, NOV. 3, 10:00AM-3:30PM FREE REGISTRATION: NE-EXPO.COM THE NEW ENGLAND CONDOMINIUM EXPO 2022 WHERE BUILDINGS MEET SERVICES away from a building if there is a compa- rable alternative place to live that is litiga- tion- or judgment-free.” Additionally, “Many lender question- naires do ask if the condo association is part of any litigation, and those who are need to disclose that information. Depending on the status of the lawsuit, buyers may have a difficult time purchasing at that commu- nity,” warns Phillips. “Equally, if a buyer has a hard time finding funding for a unit at a specific community, then the seller will not be able to easily sell their unit.” On a more qualitative level, frequent lawsuits can also lead to a less trusting and less harmonious community. Not only will it beg the question of why there are so many lawsuits (Is the board incompetent or un- fair? Are the residents hot-tempered, liti- gious jerks?), but the fine line that the board must tow between transparency and discre- tion in these matters can cause rumors, sus- picion, and hostility to brew. No matter the process, perception, or outcome, lawsuits are always a headache for all parties involved. Even the lawyers who make their living trying these cases suggest that disputes be resolved by means other than litigation. As they say, a lean compromise is better than a fat lawsuit. n Darcey Gerstein is Associate Editor and a Staff Writer for New England Condominium. What happens when a minority of shareholders or unit owners controls the majority of board votes? How can that even happen? Many boards have stag- gered board service terms to provide con- tinuity for management and supervision. So, if there are seven seats on a board, but only three come up for election in a given cycle, and the majority of residents are unhappy with the existing board, they might elect three new members—but vot- ing control of the board still stays with the four prior board members not subject to the current election cycle. Basically, the dissatisfied residents and their newly- elected board members are stuck till the next election. Actions within the board itself are handled a little differently (and of course according to rules set forth in a given building or HOA’s governing documents). When the issue is a ‘bad apple’ who is compromising a board’s ability to do its job and uphold its duty to the commu- nity it governs, says Frank A. Lombardi of Lombardi Law Group in Lincoln, Rhode Island. “A ‘bad’ board member can pres- ent a real, serious problem for a commu- nity association. Board members stand in a fiduciary role, and owe duties of loyalty and care to the associations they serve.” If your board is afflicted with such a require a ‘due process’ hearing before the person—someone who’s acting out of board or association prior to removal. self-interest, or in bad faith, Lombardi continues, “You have to decide how best you have to remove a board member, it is to deal with them. Occasionally, an hon- est conversation—rather than confron- tation—behind closed doors about the correct procedure. Assuming that you do offensive behavior may help to right the abide by the terms of the documents, the ship. Depending on the nature of the bad courts of this Commonwealth have gen- actor’s conduct, however, more drastic erally upheld removals as proper acts.” measures may be required. Generally, if there is consensus among the other board New York-based firm Herrick, Feinstein members that it is only one of their num- ber who is ‘bad,’ it may be possible (and tions from directors about removing less disruptive to the community) to seek other directors. And while the chain of their resignation. As counsel, we have events and emotions that would lead to made demands upon individuals ‘request- ing’ their resignations—lest the associa- tion explore more aggressive methods to members giving a particular colleague address their ‘bad’ actions. This can be a the boot is straightforward: Generally, face-saving measure for the individual in absent very specific language in their question, as well as a more economic and documents, “Directors can’t remove other expedient route for the association. “If worse comes to worst, however,” “They can only be removed by sharehold- continues Lombardi, “the association may ers. But they can remove a director from have to consider formal removal of the a specific position, say president or sec- ‘bad’ member pursuant to its governing retary.” So board members can make an documents. Most documents—whether officer a non-officer via a vote—but that trusts or bylaws—provide a mechanism doesn’t remove the board member from for removing board members. These pro- visions almost always require a vote of the ownership, rather than just the board members, to accomplish removal. The just don’t jive,” says Michele Schlossberg, best of these provisions allow for removal a property manager with Gumley Haft, ‘with or without cause.’ Some provisions “If you find yourself in a position where critical to carefully consult the governing documents to ensure that you follow the Andrew Freedland, an attorney with LLP, agrees, and says he often gets ques- that level of infighting might be com- plex, the answer to the question of board directors from a board,” says Freedland. the board entirely. Real Life Examples “Conflict can happen because people MANAGING... continued from page 6 continued on page 14