Page 10 - New England Condominium June 2019

10 NEW ENGLAND CONDOMINIUM -JUNE 2019 NEWENGLANDCONDO.COM Board Misconduct Understanding the Difference Between Illegal and Improper BY MIKE ODENTHAL LAW & LEGISLATION E veryone – including the boards and managers of community associa- tions – inevitably makes mistakes, or is guilty of using poor judgment. And while it’s very unlikely that every member of a community will commit outright il- legal acts, it’s also not that uncommon. There’s a wide moral chasm between erring in good faith and actively trying to swindle one’s co-op or condo com- munity. However, things can get murky. Sometimes a board will make decisions that skirt the law (or governing docu- ments) without breaking it, or that com- ply with the letter of the law but not the spirit. In those situations, it can be tough for residents to understand the difference between board actions that, while not il- legal, may be improper and possibly war- rant intervention. It’s important for boards, managers and residents alike to understand that violations can happen on a spectrum, and to have a plan in place to evaluate inci- dents and respond accordingly. That re- sponse could range from speaking up at a meeting and putting community admin- istrators on notice that they’ve strayed from their duties, to unseating a board or individual board member and taking full- on legal action. But how to know what qualifies as il- legal versus what’s just poor practice? A building or association’s attorney can help to identify bylaw violations; advise the board on the potential legal (or even criminal) liability they may be courting by engaging in problematic behaviors; and help board and residents alike under- stand where their own behavior falls on that aforementioned spectrum. Drawn to Scale First and foremost, boards and man- agement must be on the same page when it comes to how they interpret and adhere to their community’s bylaws and other governing documents. “Board members’ behavior is governed by several sets of restrictions,” says Aaron Shmulewitz, a partner at the law firm of Belkin Burden Wenig & Goldman, LLP in New York City. “There are the obvious ones, like ‘Thou shalt not steal from the building’s funds’ – which unfortunately some board members still violate – to the slightly-less egregious, like engineering board votes to benefit your own interests, the person in violation nicely about the ing in mind that a single board member such as those involving contracts with a rule, and requesting future compliance doesn’t wield the authority of the whole vendor that you control – which is often may resolve the problem. If the problem board. “Start with the other board mem- okay, subject to various disclosure and is somewhat widespread, then it’s a good bers to address the association,” recom- recusal requirements; to the even milder, idea to remind the entire membership of mends Charles M. Katz-Leavy, a lawyer like a broker on a board voting to turn the rules and initiate action to compel for Jensen Baird Gardner & Henry, which down a buyer brought by a different bro- kerage with the hopes that the seller will needed, to modify the rules to meet cur- engage the board broker on the rebound. rent needs.” Then there’s the mildest, \\\[such as\\\] getting elected to a board in order to give voice to idea to draft rules with some wiggle room member if someone goes too far astray.” one’s own interests, like those of a terrace for subjective interpretation – especially owner in a building that contains units in the case of smaller, tight-knit commu- without terraces.” When a board member or resident be- lieves someone to be abusing his or her clear, unambiguous rules to be enforced documents may provide a definitive an- position of power, the appropriate re- sponse can vary, depending on the situ- ation. “It is generally inappropriate for one attorney with Wetherington Hamilton in – and thus can be difficult to revive – or owner to chastise or reprimand another Tampa, Florida. “Rules must be clear and that certain regulations have aged poorly for perceived rule violations,” says Lisa concise, so that a person reading them and no longer comport with more current A. Magill, Of Counsel at Kaye Bender knows what is expected of them. The ex- Rembaum, which has offices in Pompano press provisions of the restrictions are the Beach and Palm Beach Gardens, Florida. only enforceable language. The board has in the past, the board may lose its right “Any violation should be reported to man- agement or the board for handling – even the manager and residents.” if it’s a board member who’s presumed to be breaking a rule. Gentle handling is hesitant to report an individual board were taken to republish the rule and rees- good for the initial approach; reminding member for misconduct, it’s worth keep- compliance, or if the rule is no longer has locations in Portland and Kennebunk, And while it might seem like a good owners have the ability to recall a board nities that don’t stand on a lot of formal- ity – legal pros stress the importance of out of bounds, the association’s governing consistently and fairly. “There’s no such thing as ‘the spirit of current. It’s possible that rules within the the rules,’” says Ellen Hirsch de Haan, an documents have long gone unenforced control over the behavior of the directors, to enforce that provision in the future,” Should a resident be intimidated or violation would go ignored, unless action Maine. “I also suggest consulting with the association’s legal counsel. Ultimately, the Debating Documents If there’s some doubt about whether a board member or manager’s behavior is swer – assuming that those docs are very state or federal laws. “If a provision has not been enforced warns de Haan. “In that circumstance, the continued on page 19