Knowledge is Power Know Your Governing Docs

 While essential to the successful operation of all cooperatives or condominiums,  the contents of governing documents are often only glossed over by otherwise  well-intentioned boards members and managing agents leading to potential  pitfalls. As a result, co-op and condo attorneys often suggest that boards at  least revisit—and in some cases memorize—the various components of this all-important and varied document.  

 Co-op vs. Condo

 The first step is differentiating between cooperatives and condominiums,  explains Steven Troup, a partner with the Manhattan-based law firm Tarter  Krinsky & Drogin LLP. With cooperatives, the bylaws govern how the cooperative  corporation conducts business such as voting on directors, voting on officers  and meeting conduct. “The proprietary lease governs the landlord-tenant relationship between the co-op  corporation and its shareholder-residents, transfers, subletting, respective  responsibilities for maintenance and repairs to individual apartments as well  as common areas,” says Troup. “The certificate typically does not contradict either document, but it needs to  be reviewed to ascertain that if there are any contradictions, the certificate  of incorporation trumps.”  

 When it comes to condominiums, the bylaws set forth the rules of the road on all  issues. “Contrary to a co-op, there is no landlord-tenant relationship between the condo’s board of managers and unit owners,” says Troup. “The declaration is the instrument filed with the county clerk by the sponsor and  sets forth the precise property comprising the common elements and units.”  

 While the governing documents are different, there exist overlaps or provisions  common to each, explains Thomas D. Kearns, a partner with the New York law firm  of Olshan Frome & Wolosky LLP, “bylaws include notice provisions for meetings, the officers to be appointed, the  number of seats on the board of directors for co-ops or board of managers for  condos,” he says.  

 Common Questions Answered

 While some board members are conversant in legal terms and definitions thanks to  years of experience, or because of their own professions, others—especially new board members—are often playing catch up ball making the first weeks and months on their board  an educational experience. For example, a common question is: What’s a proprietary lease, and why is it called that? With a secondary question: Why  don’t co-op owners get a deed like condo or single-family homeowners do?  

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