Understanding the Condo Act Governing By the Book

Unlike co-ops, which are governed by the business corporation law and the common law with respect to cooperative housing corporations, condominiums are really a creature of statute. The statute that gives authority to create condominiums is article 9-B of the Real Property Law, which is commonly known as the Condominium Act.

The New York Condo Act is to condominiums what the Business Corporation Law is to co-ops: a set of rules by which the boards and developers must abide in order to run their buildings fairly and legally.

“What the Condo Act does is, in it’s essence, is it sort of comprises the skeleton of what the condominium can be and what the limitations are in what a board can do and what a condominium’s governing documents can and should include,” says Robert Braverman of Braverman & Associates PC in Manhattan.

“It is a framework for the establishment and operation of condominiums in New York State,” adds David Berkey, an attorney with Gallet Dreyer & Berkey, LLP in Manhattan. “It is not a common law type of a creature but one that can only be created pursuant to statute. You have to follow the provisions of the Condo Act and include in the declarations and bylaws those sections that must be required in 339-F and provisions concerning the bylaws are laid out in the act.”

While a lot of what the Condo Act spells out has more impact on new construction than existing condo communities, even the most long-standing New York City condos can benefit from understanding the act and the ways in which it affects them.

What Does it All Mean?

Fairly comprehensive, the act is a mechanism that governs the establishment and the operation and control of an association.

“The Condo Act defines the authority of the board as far as obtaining access to units,” Braverman says. “Making repairs to the common elements, setting common charges. So it’s really the authority by which condominiums are governed. Now, more often than not, on a condo issue you don’t go to the Condo Act but to the bylaws and declaration of the condominium. The act is what sets forth what needs to be included in those documents.”

What happens is that all of the owners in a real property have to submit to agree to submit the property to the provisions of the act and they do that in a document called a declaration. It’s then recorded at the clerk’s office where real property is recorded and the owners of the units who buy units in the condominium are bound by both the act and generally by the provisions and bylaws of the declaration to abide by what the declaration and bylaws say.

“The Condo Act sets up a mechanism for the collection of common charges, those are equivalent to maintenance in a cooperative,” Berkey says. “It provides for the condo association having a lien on the unit so if someone doesn’t pay the common charges, the association files a lien against the unit for unpaid common charges and forecloses a lien and actually can sue the unit to make sure common charges are paid.”

Sectioned Off

There are sections of the Condo Act, for example, which delineate how common interest is determined. There are four or five subdivisions which say you can determine common interest by allocating it evenly, based on square footage alone or it can be based on a combination of factors including square footage, special features of the unit and other subjective factors. (For example: high floors, low floors and views that might be available.)

“Detailed records of receipts and expenditures must be kept by the board and made available to owners,” says Berkey. “A written report must be rendered annually.”

The Finer Points

While the Condo Act details a number of things, some of the more important things it says includes the following:

• Renders copies of the declaration, bylaws, floor plans, and any rules and regulations shall be available for inspection in the office of the Board of Managers.

• Details the powers and duties of the board.

• Explains methods to remove the board and elect new people in the positions.

• Describes the operation of the property including the hiring and firing of employees.

• Lists restrictions on the use of property.

Ch-Ch-Ch-Changes

Originally enacted in the 1960s, the Condo Act has gone through some changes over the years to keep up with the times.

According to Berkey, “It has changed, not dramatically, but it’s been fine-tuned. There have been some amendments regarding service process on a condominium back in the late ’90s. There was also an amendment that permitted condominium boards to secure financing for the association by collateralizing the cash flow stream of common charges.”

Because the association itself doesn’t own any assets, it has historically been difficult if not impossible for condominiums to borrow money. So whenever there is a capital improvement like a roof replacement that needs to be done, the only way that originally this was able to be accomplished was through an assessment of the members of the association.

In the late ‘90s it was amended to vest the board with the authority to borrow money on behalf of the association by pledging the cash flow of common charges as collateral for the loan.

“It came about because buildings have been around for a long time and they started to get in disrepair so instead of assessing unit owners, they allow associations to borrow,” says Braverman. “They amended the act to allow the collection of rent from tenants or unit owners who are delinquent in payment of common charges—but there haven’t been many.”

Although not many changes occur, every year there is always something under consideration for amending the act.

Protecting Common Interests

For residents, the Condo Act is important as it protects them from the board declaring rules that are not looking out for their best interests.

“What it does is it acts as a boundary,” explains Braverman. “There’s a provision in the Act which governs the alienation of property. It says you can oppose a reasonable restraint on alienation. The act would prohibit a board from enacting a rule or bylaw, which puts an unreasonable restraint on alienation. It would prevent a board from selling common elements without unanimous consent from unit owners.”

Let’s say there was a portion of a roof that someone wanted to build on, the Condo Act would prohibit the board from selling roof space unless every unit owner consented to that sale. It protects the common interests, it protects the common elements and it sets forth the parameters of what rules and regulations the condo board can oppose.

Information Highway

The Condominium Act is more commonly known as Article 9-B of the Real Property Law, published as volume 49 of McKinney’s Consolidated Laws of New York Annotated (McKinney’s). But unless you work in a law office or are near a specialized law library, this isn’t the easiest document to get a hold of.

According to Braverman, “It’s not something that gets a lot of publicity and the only way to find out or read the act is to look in what’s known as McKinney’s Consolidated Laws, the publication of all of New York State’s statutes. You can Google Article 9-B of New York property law or Condo Act, but it’s not as though there is a publication outside the legal industry where you can find it. If you look at other states, it is in some respect similar to what other states do.”

Berkey’s law firm gives a seminar each year on condo law and included is information on how the Condo Act works. (The next one will be on May 9th). “There’s just not a lot written about it,” Berkey says. “It’s something that’s important that the people who are associated with it should know.”

In Violation

If the board of managers is not complying with either the Condominium Act or the condominium’s own declaration, bylaws or rules and regulations, a unit owner should point out this lack of compliance, in a tactful way, expressing the expectation that the matter will be corrected. Sometimes this is all that is needed to solve a problem.

“In the Condo Act itself, there really aren’t penalties but you enforce the Condominium Act by obtaining injunctive relief if necessary or when there are financial obligations pursuant to the act, then you can use it to collect,” says Berkey.

The Condo Act requires that unit owners comply strictly with the bylaws, regulations, resolutions, and decisions of the condominium. Failure to do so is grounds for a lawsuit for money due, damages, and/or an injunction by the Board of Managers or by an individual owner.

In simplest terms, the act protects the common interests of unit owners and board members, it protects the common elements of the development and it sets forth the parameters of rules and regulations that condo boards have to live by.

Keith Loria is a freelance writer and a frequent contributor to The Cooperator.

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31 Comments

  • We are a group of majority unit owners in a condominium in N.Y. having problems of removing the Board of Managers, due to the Board of Managers failing to function the operation in the right course: lack in compliance with the By-Laws. We, as the majority owners , have signed a petition to vote them out. We did everything necessary in accordance with the By-Laws. However a few members tried to influence the other board members to refuse the resignations collectively. We also send the Board of Managers another petition to call for a special meeting for such action within certain period of time, according to the By-Laws. Again, the Board has ignored the petition so far. The Board has also tried to get the Management company to be on their side. The management company tried to get a lawyer, claimed as one of the Condominium, involved with this case. In anyway, they tried to stop the removal of the Board of Managers. We are only unit owners, not rich people, and can't afford to get a lawyer to help us. It could cost a fortune to do that. Please kindly give us some advises. Thank you in advance.
  • I also Live in a condo in NY and experiencing the same problems, were you provided with any information about ho to handle this???
  • We have a Board of Manager, who is not following the laws within the offering plan and the Condo act. No one else in the building wants to get involved, and I need help in bringing this person to justice. Who should I turn to first..before I turn to a lawyer?
  • Are there any upcoming courses in New York State for lawyers regarding Condo law? Thank you.
  • is the resident of the Board of Managers required to vote on issues that come before the Board
  • I live in a 72 unit condo. We have major leaks in our building mostly around windows and air conditioner sleeves. The board hired an engineer that some unit owners heard from other buildings in the area, to stay away from. The engineer wants to re brick the whole building, change windows and sleeves, and re construct our terraces. We have a block and brick construction and very private terraces because of the brick wall and railing. He wants to change the terraces by taking down the brick wall and putting up some kind of railings with a panel instead of brick. The Board of managers never asked the unit owners opinion on who to hire and what the scope of work we can afford. We do not have a reserve fund and the cost of this restoration will be about 4 million dollars. I was told we have to come up with the money, which will be from 60 thousand to 80 thousand a unit within two years. Is this legal? Can the board of managers make this decision without homeoners approval?
  • Does a small condo (14 units) have to hire a management co. or can it be self-managed AND with managers paid, definitely less than management cos.? I've been looking for a definite/authoritative answer to this question for a number of years. Anyone? THX all.
  • SAME QUESTION AS LP ANY WAY TO GET HELP WITHOUT GOING LEGAL AND MAKING IT HARDER FOR US TO SELL HOMES
  • how can condo owners contest a condo board without hireing a lawyer? are their rules inpeachable?can we contest a fine? They asses owners to pay legal fees if we start procedings. that's us paying their legal fees.
  • I have been frustrated by my condo boards inaction on my requests. They requested an engineers report on my rennovation, and I have submitted to them as well as their engineer for review...but can't get them to sign off on it. I am wasting precious construction time and dollars. what can I do?
  • Can the management company for my condominium legally refused to tell me what company insures my building?
  • OUR BOARD MEMBERS ARE ALLOWING RESIDENTS TO BUILD ON COMMON PROPERTY. THEY ALSO RAISED OUR CHARGES 10% SUDDENLY. IS THERE A CAP ON THE PERCENTAGE.
  • We are experiencing many of these same issues. The management company is in cohoots with the non-resident building manager (who should be a resident), the non-resident president of the board and the union rep. They are harassing the good staff and rewarding those who do as the super directs--such as collecting proxies for the board. What can we do? Who can we get to help us. They are also mismanaging funds and not maintaining the building.
  • One of our condo Board members refuses to divulge the contents of a long-term garage lease that the Board entered into....This Board member is a lbanking awyer and many of us suspect wrongdoing....what can we do to obtain this information
  • can the condo board change the reserve fund while the home loan i was closing with a fha failed because the reseve was suspebded
  • Perhaps a unique case worthy of legal assistance on Wednesday, February 8, 2012 9:09 AM
    I am not certain where to stop managing this matter and seek professional help. I believe that the case is worthy of significant publicity and could have impact on the way's condo boards abuse foreclosure actions. It is also important because the board is using said action as a form of harassment dating back (and documented) over two years. For over 2 years we have requested access to the books and records of the association as the special assessment legal fund was still being collected after the legal bills were paid in full. The board has never replied to the over 25 emails sent to each member and the management company requesting examination. Said examination would prove that the special; assessment was used for general operating expenses, transferred without member notification or votes to other accounts- basically not returned to members as the law requires. I believe that the board owes us around $7,000. Additionally, by resorting to retaining counsel to file a foreclosure action against us - without following the law regarding inspection- was a breach of fiduciary responsibility knowing that the expenses would be passed on to the members while a free alternative was available to close the issue. This is part of a long history of harassment, withholding FEMA insurance reimbursements after singling us out for 'special work inspections" and multiple submissions of paid invoices. We were the only unit which had to go through these hoops. This is one of many actions which fall outside 'true business judgement rule' and are actionable against the board as individuals. Afte receiving notice in November, I have asked they the 'debt be verified' as foreclosures are considered an act to collect a debt and are therefore subject to Fair Debt....Act. My requests to validate the debt included inspection of the funds where our payments were entered into (special assessment and monthly fees) and were only offered the management companies internal payment runs- not the records and receipts called for under the condo act. For over 2 months they have failed to respond to my continued requests to arrange inspection of the materials so we can move forward and sort this out. There are more details, but I could use some advice on how to proceed or where to find an atty who would like to correct and receive a part of the award from litigation against the board and the individuals (whose actions fall outside the business judgement rule)
  • I have a condo, building old, early 1900’s. HOA covers common area, heat and water and maintenance. Building is being worked on during the summer months and the road behind the building by the city which is having excavation work done as well. The work in the building I do not know why but the water is shut down various days, not continually but different days in a week and minimal seven times within a six or eight week period and each time for 8 hours. A "unit" owner calls management that possible running water is heard from somewhere and it might be from my unit. This is July 25 which so happens to be one of the days the water is shut down for the 8 hours. I got messages over the weekend with request from the management to check my unit. I got the messages on Monday and called the management. Had a plumber go to the unit on the 27 to check for issues. No running water but found clogging an issue. Again, another call to association from the same anonymous unit owner concerning the same issue, and I had a plumber go back out Aug 1 no running water. Due to the calls and concerns of my unit with water and they assume the water was running for 9 days that the water bill is my expense. Of course after the bill was obtained they tried to figure out what or who could cause the billing to be so high. By the time they figured out they should check the building it was at the end of September and of course all of the complaints happened in the end of July and first of August. Building in the mean time was still shutting down the water for various days. The building inspection included checking all plumbing in every unit and common areas which they state they found no water issues which included my unit. So since they could not pin point where the water usage or where it might of come from it was then decided by management the bill would be responsible by me and charged and added o my condo fees over and above my monthly fees. Now if water was running for 9 days in any unit of the building and they have a plumbing service don’t you think it should have been a reason to call the contracted service to address any such claims? The Management made assumptions and with process of elimination they decided it was my unit’s cause of the excessively high water bill and that was that. No further decision or proof needed and it was now mandatory I had to pay it or they would put a lien on my property by the by law “Delinquency and Pursuant to Mass General Law 183A Section 6 and 6c”. The Building has 62 units and is a high-rise. Now they have taken the total bill and subtracted out the overage and came up with a balance of a little more than 10,000 and of course legal fees attached to the balance. Question: Is this legal for them to take a bill that is from a common expense for the entire building and place responsibility of the bill payment to one unit if they have no actual proof or even a visual or any verification from the plumbing service contracted for the building? Upon immediate decision form Management that I would be responsible for payment they sent a letter requesting payment immediately and in full. After 60 days of non-payment of the bill they sent it into collection to be pursued on legal ground with no identification of what the charges were for and the demand payment letters reflected it to be just typical condo fees that I was not making. What is the real kicker is just recently a general letter came in from management informing everyone the info from the annual meeting for the association. The decision was to increase everyone's condo fees for a percentage which was reasonable. The reasons stated were for building maintenance and pointing all the corners of the building structure, replacing laundry room floor and this is the kicker, "REPAIRING WATER LEAKS IN COMMON AREAS". I do not think they realize how this sounds when they previously stated that the entire building was inspected and they found no water leaks but now they
  • HUD has jurisdiction over these condos, so a good place to start would be reporting the problem to HUD
  • I requested a copy of the annual report of the receipts and expenditures of the condominium. The President of the association ( we are a 13 unit self-self managed building) informed me that he is waiting for the bookkeeper to prepare the document. Is this acceptable ? According to the By-Laws is states by a CPA.
  • NEVER BUY INTO A CONDO AGAIN!!! on Saturday, June 8, 2013 3:13 PM
    Heated in NYC....we get the same answer from our manager, and have been getting that answer now for 2 years. Finally I wrote the CPA and he gave me some monetary info that made it clear our manager was stealing. So, she sent a list of numbers, no back up, purely fabricated. Now what, can we sue, or just fire her? Funny thing is, people don't want to fire her, they are afraid of making waves. I guess they figure the next person would steal as well. NEVER BUY INTO A CONDO AGAIN!!!
  • Are there any guidelines as to whether the Monthly Board of Managers Meeting is open to the homeowners?
  • Offer Letter clearly states that unit owner may decorate and make changes to condo unit provided that one does not affect the building's electrical and mechanical controls. Our Board and Management Company will not allow painting or any work in the unit, including decoration, if one does not pay a deposit of $500 as security and hire only a contractor that has liability coverage for at least $1M. I, myself, am not authorized to paint my own unit. This appears to be encroachement and abuse of authority,
  • DOES ARTICLE 9-B(NY CONDOMINIUM ACT) SPECIFY THE NUMBER OF VOTES REQUIRED TO AMEND THE BY-LAWS, DECLARATION, RULES & REGULATIONS OF A CONDOMINIUM ??
  • We own a condo on the east end of Long Island, the condo board and the management have been tampering with elections to do away with board members that rightfully challenge their actions. One board member ran against another board member before her term was even up to knock him off the board. In addition to this there were brand new owners on the ballot that never even showed up for the meeting. None of the homeowners knew them yet somehow they had all these votes. The management company is running their real estate business out of the office and they are negligent in managing the property. Their priority is to buy and sell. Some of the board members like this because they get their units rented, however it is a true conflict of interest, for instance if a renter is not observing condo rules it is forgiven because she is making a profit. So the homeowners lose and the management profits. In addition to this the management hires her boyfriends son, her son, her son's best friend to work, and brings the baseball team of her son to stay on our property and use the facilities. The list goes on..... Please help!
  • I live at the Greenhouse condo and I am new elected as well as four other members. Recently we tried to change the signatures in bank accounts, but wasn't able to. According to the bank manager we need a certificate of unincorporated in order to do anything. We are a nonprofit building established in 1980. A declaration and an amended declaration was sent to the bank manager that we are a condo and not a co-op. My question is do we need to obtain a certificate of incorporate/unincorporated? If so, what does this do for our building?
  • where are the answers to these questions??? my board does what they want with our money, constant assessments, common charge raises and no longer sends out minutes or budgets to us as past members have. where do we get help???
  • our board is negligent in responding to complaints and repairs that need to be done but keep assessing and raising common charges. they are negligent in giving answers to where is the budget and what the monies are being used for.
  • Can they cut off my life line? on Sunday, September 2, 2018 11:16 AM
    Can management require that I have Cablevision wires that were installed on the exterior of my unit 20 years ago be removed now? What if the cable company can find no other way to install cable phone, television and internet unless they put the wires on the exterior of my unit? They said if I don’t have them removed, they will remove them at my expense. Is this even legal?
  • vernon@mcdermottlight.com on Tuesday, February 5, 2019 2:19 PM
    Firstly the board wanted to make an assessment . But come day to pay too many people did not have money for the assessment. So the board is trying to get a bank loan to be paid back over next fifteen years. The interest comes out to be 1/2 amount of the assessment. Some members would like to pay off the assessment without paying the interest They have told the members the condo laws in NY does not allow some to pay off immediately and others to take the loan. Is that true.
  • I have a Question. I am on a Board Managers of a condominium complex. The Problem Some of the Members are Having is that when we receive agenda before s Meeting That when we get to a meeting there’s some stuff on the agenda they hand out that was not on the agenda that we received before the meeting. When we ask why wasn’t on the original agenda they replied it came up last minute. It’s Just very funny this is happening a lot and we can’t per pair for any of these items. We Believe This their intentions. We asked for this to stop and were told they cannot help it. We said even if it’s last minute. If you have time to print it you have Time to send it out I’m Email. We Feel we are being Railroaded Help Please Thank You Tom
  • My condo with 16 units was damaged in the fire and it’s been 100 days since it happen and it not live able. The condo board of member and the management company has not give us any information on when the rebuild is.