—Brokering in Brooklyn
“Clearly, there may be an actual conflict of interest and there is certainly, at minimum, a potential conflict of interest,” according to Abbey Goldstein, an attorney with the law firm of Goldstein & Greenlaw, LLP in Forest Hills. “That said, the law does not prohibit a board member with a conflict or potential conflict from serving. The board member, however, must refrain from either voting on or participating in any deliberation regarding transactions that involve him, his company or the units he manages.
“That is so, not only because of the inherent conflict if, for example, this board member were to make decisions regarding the condominium's obligation to make repairs to the two units he manages but also because there are conflicting fiduciary obligations. Both a managing agent and a board member owe the highest level of loyalty to their principals: as a board member to the condominium and as a managing agent to the owners of the two units in question. If the interests of the two principals diverge, it is impossible for the fiduciary to fulfill his/her obligation to both. It should be noted that a management company of a co-op or condo (as opposed to an agent for individual units) has a fiduciary obligation to the co-op or condo as a whole.
“Were the “realtor” to be involved in a sale where he might earn a commission and the board of managers was considering whether or not to exercise a right of first refusal (or approval in a co-op), the potential for conflict is obvious and any board member in that position must also refrain from any involvement in the decision-making process.”