Q&A: Dual Role as Director & Broker

 

Q I am the president of a co-op board in Gramercy Park. One of our directors has recently become a licensed salesperson. When announcing this to the board, he indicated that he would recuse himself  going forward from interviewing any potential buyers.  

 At the time, this seemed adequate to ward off the semblance of any conflict of  interest. Recently, however, the issue has become a bit more complicated.  

 The director has done a mailing to all shareholders announcing his association  with a particular brokerage firm. This has raised more than a few eyebrows in the building. For starters, the director is also the treasurer. Consequently, he is in a position to influence the budget and ultimately  maintenance. Further, he is an aggressive proponent of refinancing our mortgage.  

 I personally am in a difficult position, as the director in question is a close  personal friend. However, I have an obligation to the shareholders to lead a board without even  the slightest hint of impropriety. Can you offer some advice?  

                         —Concerned Board President

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2 Comments

  • When I was siging the contrat in my lawyer's office buying a co op in brooklyn, the president of the board of that co op who is also a real estate broker bypass the seller's broker and direct call the seller's attorney to stop the process because he wanted to buy the unit at a llttle higher price. I offered a even higher price but the owner and his broker were afraid of board president's power on board approval process, decided to sale the appartment to him. Do I have a case here?
  • are there any coop's that do not permit a residetial broker who is a board member to handle any sales in the coop? Any advice on whether to permit such activity?