Need Answers? Look to Your Governing Documents

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Your roof terrace leaked and the neighbor below you sued for damages. Do you have any recourse? The heating system in your apartment failed to work and the managing agent sent you the bill for its repair. Do you have to pay?

The answers to most questions raised by co-op and condo residents are contained in your building’s governing documents.

A Hierarchy of Documents

To make some sense of the maze of rules and codes that affect ownership of shares and property in co-ops and condos, it helps to view these documents as a hierarchy. At the top in a co-op is the certificate of incorporation. The equivalent for condos is the declaration of the condominium. Copies of these documents may be obtained from the Secretary of State, Department of State, Division of Corporations, in Albany if they are not in the building’s own files.

Next in the hierarchy are the bylaws of the co-op corporation or condo association. This document generally details the purpose of the entity, its form of government, its method of elections, its voting process, the type and frequency of board and shareholder/owner meetings, and the specific form of agenda for meetings. It also typically includes a description of the directors and the number of officers, along with a description of their duties, responsibilities and liabilities.

One of the most important features of many bylaws is that they contain specific guidelines for amending their contents. The bylaws of a condo contain other significant provisions having to do with the form of ownership and method for changing it, a description of the property, the operation of the property and the duties and responsibilities of the owners and occupants of the condo.

Since condo owners possess real property rather than shares in a corporation, there is no proprietary lease in a condo association. Therefore, condo bylaws are multifaceted documents that contain special provisions relating to the sale and rental of units and the approvals or waivers required for a clean transfer of title. Owners, members of the board, and managing agents alike must pay particular attention to the specifics in condo bylaws.

In co-ops and condos alike, the bylaws afford you the most important vehicle for exercising your rights—as well as for making changes or reinforcing your specific needs.

The Proprietary Lease

Next in the hierarchy of governing documents—but one that only pertains to co-ops—is the proprietary lease. Granted by the corporation when a shareholder purchases shares, the lease is the most important document in terms of the day-to-day relationship between the shareholder and the corporation.

In most cases, the proprietary lease clearly defines all the provisions related to the use of the apartment—including occupancy, modification, repairs and a host of other significant provisions. In a condo, the bylaws and house rules provide the same provisions. In order to change the provisions of a co-op’s proprietary lease, it is necessary to refer back to the building’s bylaws and the terms of the lease itself to determine exactly how these changes can be brought about.

House Rules

At the bottom of the hierarchy of governing documents—but certainly no less important—are the house rules. Almost always incorporated into the proprietary lease of a co-op or the bylaws of a condo, house rules usually specify all the “no” provisions, such as no storage of personal property in the hallway, no pets, or no excessive noise. House rules are usually drafted in more basic language than that used in bylaws or the proprietary lease, and tend to be associated with quality of life issues. Just as it is incumbent on the manager and the board to review the house rules and update them as necessary, it is incumbent on all owners to take the time to review these rules periodically.

A Wealth of Knowledge

Even if you are already knowledgeable about your co-op or condo’s governing documents, you may want to revisit them every few years. Contact your managing agent or attorney to assure that you have all the amendments that have been filed. The entire effort may only take a few hours, but the result will be a wealth of knowledge. It is your right to be informed, and to be able to make decisions based on this knowledge. It may also save you time and money in the future.

Irwin Cohen is president of A. Michael Tyler Realty Corp., a residential property management firm based in Manhattan.

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3 Comments

  1. how can the SHAREHOLDERS of a co-op impeach the current board. They have mismanaged our funds, depleted our reserves, poor capital planning etc. There are also allegations of fraud, theft, intimidation, etc. What do we do?
  2. an owner have 48 units and the rest of the building owners are 84.how can we stop the owner of the 48 units of belong to the board. his vote every year is the # of shares from his 48 units .he also hold 2 seats on the board.
  3. Recently, I was informed that the Board in my Co-Op was exploring the idea of hiring a locksmith to enter into apts. that had not responded to a request for a yearly inspection. Can you please inform me of the laws regarding such action?

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