Community living – the very basis of co-op, condo and HOA life — is based on the idea of trust. In a community of potentially hundreds or thousands of residents, every resident can’t be involved in the making of every decision. Too many cooks can potentially spoil the proverbial broth. No decision would ever get made in a timely manner.
To make those decisions in a timely and efficient manner, communities elect a board of directors to represent them, and vests that board with the responsibility to make decisions that will affect the entire community. Election to the board is an example of representative democracy, not elevation to tyranny.
The Importance of Transparency
Administrative transparency, says Sima Kirsch, a co-op and condo attorney based in Chicago, “is one of the elemental building blocks that helps create a successful association.” The negative impact of an opaque, inaccessible board, she adds, “is anarchy, infighting, ill will, unbecoming behavior by board members, lawsuits, and sometimes even fear of physical reprisal.”
“It’s important for boards and shareholders to be able to communicate,” says Julie F. Schechter, an associate attorney specializing in co-op representation with Montgomery McCracken Walker & Rhoads LLP, a law firm that has offices in New York, New Jersey, Pennsylvania, and Delaware. Communication enables shareholders “to express whether there are issues or suggestions which they might have, because without hearing from the residents, how would board members know what needs to be done?”
David Ramsey, a shareholder in the Morristown, New Jersey office of law firm Becker & Poliakoff, suggests a most practical reason why transparency is vital to the interests of those not serving on the board: “A regular method of communication provides residents with the comfort that they know what is going on with their homes, what potential ‘disasters’ the association may be facing in the future, and how the owners might best prepare.”