Every condo and co-op has its own set of governing documents by which building administrators direct their community's day-to-day business. Bylaws, rules and regulations, and precedent-setting legal cases help keep boards within the letter of the law, and offer a framework within which they can operate consistently from year to year.
Several laws apply to real estate in New York: for example, condos are governed by the New York Condominium Act, and the Real Property Actions and Proceedings Law (RPAPL) deals with landlord-tenant issues between a co-op and its shareholders. Case law interprets these statutes and sets legal precedent for co-op and condo owners; indeed the law governing co-ops in New York is mostly created by judge-made case law.
One statute originally created to regulate businesses, the Business Corporation Law—or BCL, for short—primarily governs how cooperative corporations, including housing co-ops, must be run.
The BCL provides specific rules regulating the corporate governance practices of co-ops, including the manner in which boards and shareholders conduct meetings, amend bylaws, and vote, and the BCL prescribes the rights and responsibilities of boards and shareholders. While it may be asking a lot of volunteers to pore over the entire BCL or know its nuances by heart, it's a good idea for all board members to at least be aware of its existence, and better to have a passing familiarity with its contents.
History and Background
The BCL was implemented over a century ago to regulate governance of corporations in New York, and remained more or less unchanged until it was overhauled in 1998. “The BCL was drafted generally for corporations, [the legislature] didn’t have co-ops in mind, and the courts have applied the BCL to co-ops,” explains Stephen M. Lasser, an attorney shareholder with the Manhattan office of the law firm Stark & Stark.