It happens in business, government, and industry every day: employees learn the rules of a new job, and before long they know those rules so well, they start going around them or taking short cuts. Rarely is this done with malicious intent. More often, it is simply a matter of knowing something so well that the rules fade into the background and solving the problem at hand becomes the priority.
The same can happen with co-op and condo boards who may find themselves straying from the letter and spirit of the rules that govern the entity over which they have been given authority.
In other instances, the lapse in governing “by the book” could come from the fact that new members may or may not have fully familiarized themselves with those all-important documents. In these cases, ignorance rarely if ever leads to long-term bliss. Sooner or later, boards that fail to lead according to their co-op, condo or homeowner’s association governing documents will find themselves in a bind—the kind that may end up involving litigation.
Letter of the Law
For co-ops, condominiums and homeowner’s associations, there are guidelines available to help a board efficiently, effectively, and legally lead their communities. For condos, those documents include first and foremost, the master deed, says Dennis Estis, a partner with the law firm of Greenbaum, Rowe, Smith & Davis LLP in Woodbridge, New Jersey. “Second, there are the bylaws. Third, any rules or regulations adopted over the years and fourth, the certificate of incorporation.” For co-ops, “First is the declaration, second is the shareholder’s agreement, third is the lease, and fourth is the set of bylaws,” Estis says.
For an HOA, these governing documents would be the declaration and by-laws. “The parts that the board really control are small, like the roadway, swimming pool or retention pond,” says Estis. “Other than that, every homeowner has their own home.”