Seeing Through it All The Value of Transparency

Any relationship depends upon effective communication to function properly. In a co-op or condo, the relationship between the board and managing agent, or between the board and the shareholders, all have boundaries regarding what is acceptable for discussion, and what information is available to inquisitive eyes. Documents that a board member could be privy to might be sealed to nearly all others, while legally speaking, some community records should be available for the asking to every resident of a building.

An effective communications policy for any board should include the reasonable exchange of certain records detailing the community’s financial status, legal proceedings, and correspondence between unit owners, the board, and the management company. Failure to divulge this information to residents who request it could invite a lawsuit. And no one really wants to be at odds with their neighbor, so knowing what information to divulge—and when it’s legally allowed—is essential for any board member.

How Open?

New York State law requires that shareholders be given a copy of their building’s annual financial statement. Shareholders must be notified in advance of an annual meeting to elect board members. Shareholders also are allowed to request, and must be given access to, minutes of shareholders meetings, and books and records for the building, says attorney Marc J. Luxemburg, a managing member of the law firm of Snow Becker Krauss, PC, in Manhattan.

“Beyond that, it’s a matter of policies and board discretion,” says Luxemburg, who also is president of the Council of New York Cooperatives and Condominiums (CNYC).

Board members are entitled to see any document pertaining to the management of the building, according to the business corporation law (BCL) of the state of New York. Practically speaking, the treasurer will have closest access to financial records, and the secretary will have the closest access to the other building records as well.

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Comments

  • The co op board here has denied a board member's access to the financial records which, according to this article seems legal and at the discretion of the other 2 board members. The request was made in the context of not having any open meetings (used to be held monthly) since June... the next meeting is November to go over financials which can only mean the 3rd increase in maintenance and assessments in one year. What can be done? Have shareholders absolutely no recourse? Do we have the right to request an independent audit?