Q&A: Board Trouble

Q We have only three board members in our building. The current board has been in place for about seven years, and our shareholders would like to remove them because they’re ineffective. They failed to replace a board member who resigned, saying we can only have four board members when our propriety lease clearly says we should have seven. We shareholders are uncertain how many seats the sponsor of the building can hold—our board says only three, and our managing agent has let our Real Estate Board of New York (REBNY) membership lapse, so we can’t get advice from them. We plan to rejoin the group as soon as we get rid of our board, but at the moment, we’re not sure how to proceed.

—Manhattan Shareholder

A According to John Van Der Tuin, an attorney and partner at Balber Pickard Battistoni Maldonado & Van Der Tuin, “The number and election of board members is governed by your cooperative’s certificate of incorporation and bylaws and Article 7 of the New York Business Corporation Law (BCL). You must review them and consult with counsel. Although the specifics of bylaws may vary somewhat from building to building, in general, a meeting of shareholders to elect directors must be held every year. The number of director seats specified in the bylaws must be filled, and the length of the terms of the individual directors will be specified by the bylaws and certificate. If the incumbent board refuses to comply with these requirements, shareholders may sue to compel compliance.”

Related Articles

Going by the Book

The Importance of Following the Rules

Holding More Efficient Meetings

How Boards & Managers Can Keep On-Track

Running the Show at Board Meetings

Effective Procedures and Protocols