Living in a co-op or condo community is a social arrangement as well as a business and residential one. You are part of a community, and that community should feel ‘organic.’ It is also perhaps the purest form of representative democracy. Members elect a board of directors to oversee and make decisions for the entire community. But the question is: once you have assigned your representation to five or seven or even nine of your neighbors, how much information are you entitled to have access to in the day-to-day operations of the community?
Who Is Protected?
While your vote places your neighbors in control of the community, a co-op or condominium owner is also passing certain rights to information to the board members. Thus, are there limits to how much non-board community members can expect to know?
Mark Hakim, a co-op and condominium attorney based in Long Island, says: “A board has a fiduciary duty to its shareholders. With that comes the duty to hold the sensitive information disclosed to it or discussed in board meetings confidential--except as set forth under the building's governing documents or at law. While maintaining confidentiality protects board members from possible liability for a disclosure of sensitive information, it also helps maintain the privacy of the shareholder/unit when, for example, a board discusses personal issues such as arrears, litigation with the building, infestations within a unit, etc.”
It is advisable not even to mention names, or if possible apartment identifiers, in the board’s official minutes. “Furthermore, shareholders and unit owners need to be assured,” says Hakim, “and for a building and board to operate effectively, that private matters will stay private, except what may be permitted under the building's governing documents or at law.”
What About the Minutes?
Julie Schechter, a partner at the New York office of law firm Montgomery McCracken Walker and Rhoads, says: “While there is no standard or official way in which meeting minutes should be taken, the Business Corporation Law—which governs co-ops—does require that minutes be kept. The purpose of keeping the minutes is to create a permanent record of the actions taken at board and shareholder meetings. In fact, the actions taken are the only parts of the meeting that really need to be included the minutes. We advise our clients only to include in the minutes who was in attendance, who was absent, action items, and the date.” (New York State’s laws governing condominiums reflect a similar position).