Governing By the Book Deviating From Governing Docs Can Cost You

Most newly-elected condo or co-op board members aren’t experts in running a multifamily building or development. They may be eager, enthusiastic, and committed to serving their community. But they also probably have little idea of how to do that until they’ve learned a bit more through experience. Fortunately, co-ops, condos and HOAs all have an established set of governing documents laying out the rules that everyone in the community must follow. 

And while governing documents do act as guidelines for board members, viewing them purely in that light downplays their significance. For all intents and purposes, governing documents are a board’s bible. Everything pertinent to the governance of the community should be included – and the sooner that a board member realizes this the better. Deviating from these foundational documents can result in trouble not only for the board, but for the community at large, depending on the magnitude of the transgression. Mistakes happen, of course, but ignoring or contradicting one’s governing docs – even with good intentions, or for the sake of expediency – only leads to trouble.

Read Those Rules

Getting familiar with governing documents should be the first thing any board member – or resident seeking board membership, or even a resident invested in the operations of his or her building or association – should look to do.

“Unless and until bylaws and rules and regulations of a cooperative corporation or condominium association are changed, a board has a fiduciary duty to uphold and follow that framework for operating the organization,” says Michael T. Reilly, an attorney with Norris McLaughlin P.A. in New York City. “They are not optional guidelines; these are the requirements that must be followed until they’re properly amended, changed or removed from the organizational documents.

“It’s essential for each board member to have a working knowledge of these governing documents when they take office,” he continues. “I suggest that every new board member be provided with a hard and digital copy of all governing documents, and that each board member be provided with a lecture on fiduciary duties when the new board is in place and the officers are elected.”

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