The Pitfalls Involved in Disposing or Mortgaging Real Property Owned by Religious Corporations

The pastor of a small church in Manhattan contacted me several years ago asking for help. The congregation had outgrown its space and was seeking to sell its building and move to a larger building in the Bronx. In fact, the church was already under contract to sell the building to a developer, but the attorney representing the church had stopped responding to emails and phone calls. Was there any way I could take over the file?

Representing a religious corporation, or any not-for-profit, in the disposition of real property requires a methodical approach combined with a firm grasp of which rules apply under the circumstances and how to address them to achieve the desired result: Attorney General and/or Supreme Court approval of the sale.

Unlike the representation of a for-profit corporation, counsel for a church, synagogue, or mosque needs to procure a good deal of specific information from the client, and in many cases, assist them in generating it, in order to draft a well-constructed petition for approval of the sale. The application process can be a slow one, made all the more drawn out if it’s not approached correctly.

These transactions are guided by Not-for-Profit Corporation Law (“N-PCL”) §§ 510-511 and Religious Corporations Law (“RCL”) § 12. The RCL requirements are generally triggered when the religious entity seeks to sell, mortgage, or lease its property for a term of five years or more, or exchange or otherwise dispose of a real property asset. The religious entity needs to petition the New York Supreme Court or the Office of the New York State Attorney General, Charities Bureau (or in some instances both) depending initially on the denomination of the entity. The amendments to the Nonprofit Revitalization Act of 2013 simplified the process by allowing some entities to submit applications to the Attorney General alone, and, barring any complications, to receive a final order approving the sale from the Attorney General without the necessity of seeking court approval as well.

The applicant needs to procure an appraisal as a requirement of the petition, ideally prior to marketing the property so that it is untainted by an already agreed upon contract price. The RCL also has very specific requirements for soliciting votes for approval of the transaction from the Seller’s board of directors and membership. The contract itself must stipulate that the disposition is subject not only to approval by both the Seller’s board of directors and its congregation, but also by the Attorney General and/or the court. Seller’s counsel must also ensure that the closing provision of the contract gives the entity adequate time to apply for approval of the sale, which at best will take several months. It’s recommended that counsel address this issue with the parties up front, because while praying for a quick approval couldn’t hurt, strict attention to detail and a thorough knowledge of the statutes are still the best ways to expedite the process when representing a nonprofit or religious entity in the disposition of real property.

New York Appellate Court Recognizes Private Right of Action for Nonprofit Employees Against Employers who Violate Whistleblower Protections Under Section 715-b of the Not-for-Profit Corporation Law

Section 715-b of the Not-for-Profit Corporation Law (the “NPCL”) requires nonprofits with 20 or more employees and annual revenues in excess of one million dollars to adopt an explicit whistleblower policy to protect from retaliation persons who report suspected improper conduct. Nonprofits with fewer than 20 employees or with annual revenues lower than $1,000,000 do not need to adopt a formal policy.

Section 715-b does not expressly authorize private whistleblower lawsuits. Where a statute does not explicitly provide for a private right of action, an individual can only sue to enforce the statute if a court determines that there was a legislative intent to create an implied private right of action.

New York courts have been divided on whether whistleblowers are barred from starting private lawsuits under Section 715-b. Recently, however, in Ferris v. Lustgarten Foundation, the Appellate Division, Second Department held that Section 715-b does imply a private right of action for nonprofit employees. In Ferris, the plaintiff was an employee of the nonprofit organization for 10 years before she was fired after reporting improper fundraising conduct. The plaintiff sued the nonprofit organization to recover damages for violation of Section 715-b. The nonprofit organization had moved to dismiss the lawsuit on the grounds that Section 715-b does not imply a private right of action and that even if it does, it doesn’t apply because the nonprofit has less than 20 employees. The Court rejected both of those arguments for different reasons.

The NPCL grants explicit enforcement authority to the Attorney General to enforce whistleblower laws. Typically, where a statute includes an enforcement mechanism, courts have concluded that to recognize an implied private right of action would conflict with that statutory scheme.

However, the Court in Ferris found no conflict between the existing enforcement mechanism and a private right of action for employees. According to the Court, the Attorney General has been given specific enforcement authority to protect the rights of “members, directors, or officers” of a nonprofit corporation, but not employees. As there is no regulatory agency specifically charged with enforcing compliance with Section 715-b on behalf of nonprofit employees, the Court concluded that Section 715-b does create an implied private right of action for employees.

The Ferris court also determined that even nonprofits with fewer than 20 employees might be subject to liability under Section 715-b if it can be established under a “single employer” or “joint employer” theory that the nonprofit, together with an entity that either provides material support to or is actually affiliated with the nonprofit, has more than 20 employees. Under the single/joint employer doctrines, when two or more companies are sufficiently integrated, they may be treated as a single entity for certain employment law purposes.

In Ferris, the nonprofit entity received significant administrative support from a large for-profit entity and the Court thought it at least possible that the nonprofit was subject to Section 715-b under a single/joint employer theory. (That might concern national organizations with local affiliates, like the YMCA. Section 715-b also applies to homeowners associations and other housing entities that are formed under or subject to the NPCL.)

Ferris is a reminder to nonprofits with employees to have a current whistleblower protection policy in place that complies with Section 715-b of the NPCL (as well as federal whistleblower laws). Both larger and smaller nonprofits who have express or implied affiliations should consider the need for a whistleblower policy in light of that affiliation, and should obtain advice to ensure that the affiliated relationship is properly structured to mitigate the risk of joint employer liability.

Covid-19: DHCR Allows Co-ops to Impose Mask Mandates; Employers May Require Vaccinations from Employees; Condo Lien Foreclosures Not Barred by Latest Moratorium

DHCR Grants Powers to Co-ops to Enforce COVID Rules. DHCR has issued regulations allowing “Limited Profit and Limited Dividend” housing projects (such as Mitchell-Lama co-ops and many HDFC’s) to pass rules requiring residents to wear masks in public areas if they cannot maintain social distancing. Building owners are authorized to [“shall”] deny admittance to any person who fails to comply.

Moreover, DHCR is authorizing these co-ops to charge “administrative fees” (which they also call “fines,” unfortunately) to cover “unusual administrative costs caused by repeated negligence or willful actions of tenants or cooperators.” However, the fees must have a rational basis and be appropriately sized, and the proprietary lease and by-laws must authorize the levy of “administrative fees.”

Legally, DHCR has simply put limited equity co-ops on the same footing as private co-ops, albeit about nine months late. But it has also publicized a major sore point for all cooperatives. Most co-op Proprietary Leases and By-laws do not expressly authorize the Cooperative to impose “administrative fees” or fines except in certain circumstances, such as transfers. (In fact, unlike Condo by-laws, most Co-op governing documents hardly discuss the powers of Boards at all.) Courts have frequently ruled that without such authorization, fines imposed by Board resolution are unenforceable, since they impose an additional monetary obligation on a shareholder in a manner different from a “per-share” charge. Boards may have more leeway to impose “administrative fees” by treating such fees as compensation to the Corporation for the reasonable additional costs in management and Board time, such as for monitoring violators of its mask mandates. By equating administrative fees with fines, though, DHCR has blocked that avenue.

To optimize their default remedies, we recommend that Boards amend their Proprietary Leases to allow the imposition of “administrative fees” and “fines.” Ideally the Board can present this as a housekeeping measure that simply formalizes what many Boards do anyway. (Make sure you include some other housekeeping measures with that amendment; but the fine art of presenting and passing amendments is a topic for another blast.)

Can Employers Require Employees to be Vaccinated in order to Work? The short answer, according to the EEOC, is “yes,” with numerous qualifications. Although an employer can ask an employee whether he or she has been vaccinated, if they say they have not, the employer cannot ask them “why”; that comes close to requiring them to disclose a disability, which is largely prohibited unless knowledge of the disability is job-related and consistent with business necessity. Moreover, if requiring a vaccination has the effect of screening out employees with disabilities, the employer must show that the unvaccinated employee would pose a direct threat due to a “significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.” The EEOC also warns that employers may want to get buy-in from unions first. For further details, visit EEOC’s website HERE.

Are Condo Lien Foreclosures Still Enforceable Notwithstanding the Moratorium on Mortgage Foreclosures? The “Emergency Eviction and Foreclosure Act” passed in late December prohibits foreclosures of mortgages and tax liens until May 1st if the borrower files a “Hardship Declaration. The Act provides in part that “For purposes of this Act, real property shall include shares in a residential cooperative….”

Courts have been ruling that a condo lien was not a “mortgage” and thus would not be subject to the notice requirements and other restrictions imposed on lenders foreclosing mortgages. Presumably that includes the latest Act. However, some practitioners have asked whether the inclusion of “tax lien foreclosures” in the moratorium brings condo lien foreclosures into the forbidden circle, since tax liens are not “mortgages” either.

We do not think so. Unlike condo liens, tax liens are sold to third parties and foreclosed for profit; therefore they resemble mortgages in purpose and effect. In addition, if condo liens were meant to be included, the legislature could have done so.

We will continue to keep you updated on COVID-19 developments and other current issues. If you need assistance on any of our topics, please contact one of our partners on our Co-op/Condo team.

Covid-19: New Rules Evictions and Foreclosures Still Limited News on Insurance Costs and Taxes

PPP UPDATE

Co-ops STILL Eligible. Condos and HOA’s May be Challenged. Co-ops are eligible for PPP Loans even as first-time borrowers. Based on the statutory language in the new Stimulus bill, though, Condos and HOA’s do not qualify because (unlike Co-ops) they were not specifically included. Hopefully that omission will be corrected or explained away, but the new SBA regulations do not offer much hope.

First-time Borrower Does Not Need to Show Drop in Income. As in the initial PPP program, a first-time borrower does not have to show a 25% drop in income from the comparable quarter in 2019 in order to qualify. But Second Draw borrowers do. See our December 22nd newsletter for some other differences, such as an expansion of permitted uses of covered funds and a 300-employee cap. From what we have seen, most borrowers could spend 100% of any loan on payroll alone, so these expansions are only mildly useful.

Check with Your Lender First, But They May Be Scrambling. The maximum loan amount for most Co-ops (2.5 times the monthly payroll) is simply not high enough to interest a strange lender, so they may give you lower priority in processing applications. To get better treatment, check first with your underlying mortgage lender to see if they will process your application. Several lenders who had refused to process Co-op applications in April are scrambling to set up portals for applications, but that should be resolved shortly; even if they do not process PPP applications themselves, they should be establishing links with SBA loan specialists to process their customers’ applications. Fees are set by statute, so service is the more important priority.

Updated Rules Published. The SBA has posted two “Interim Rules” to answer questions about the PPP revisions for lenders and first-time borrowers. CLICK HERE for first-time borrower updates. CLICK HERE for Interim rules for “Second Draw” borrowers.

EVICTIONS AND MORTGAGE FORECLOSURES STAYED UNTIL MARCH 1ST OR MAY 1ST

March 1st Extension for ALL Residential Eviction Proceedings. All pending residential eviction proceedings are stayed until March 1, 2021 (actually February 26th, but that’s a Friday). No default judgments without a new hearing. No warrants of evictions executed without a new status conference. Exception: Claims for Nuisance or Hazardous behaviors will proceed normally.

May 1st Extension if Tenant files a “Hardship Application.” Any tenant against whom a proceeding is started may file a “hardship application” that states that the tenant has experienced “financial hardship” during the pandemic. In that case, eviction proceedings will be stayed until at least May 1st. And even if a tenant doesn’t submit an Application up front, the Court will give one to them on the hearing date.

Foreclosures on Residential Home [and Condo] and Co-op Loans Stayed. Lenders cannot continue foreclosures against condo or co-op loans (or home mortgages) until May 1, 2021, provided the borrower files a “Hardship Application” similar to the one for evictions.

Impact on Co-ops and Condos? Co-ops and Condos are not lenders or mortgagees. They are not subject to the rules restricting foreclosure of their liens against co-op shares or condominium units owned by natural persons. Recent case law has also held that a UCC foreclosure against collateral that is not real property (such as shares) is a private, non-judicial proceeding, so would not be subject to restrictions on pending judicial foreclosure proceedings.

We are also finding that most co-op end loan lenders are continuing to pay the arrears of their borrowers upon receiving notice of the default from the Co-op. This shifts the burden of payment and foreclosure to the lender. So we recommend that Co-ops continue to pursue their foreclosure proceedings aggressively.

However, evictions are still subject to stays, so a defaulting owner can still remain in possession without paying maintenance or arrears until the pipeline is reopened this summer.

INSURANCE COSTS RISING

Water Damage Claims Surging. Industry leaders have confirmed that water damage claims are on the rise, due in part to aging infrastructure which leads to more leaks. In other words, you are not alone.

Co-ops and condos already have to make unpleasant choices between filing multiple water damage claims and risking increased premiums or exclusions, or paying multiple deductibles for numerous smaller claims over the year. Associations should consider amending their documents to shift the liability for casualty damage due to water leaks to the owner rather than the Association.

Reinsurance Rates Up Sharply in January. The cost of “reinsurance,” by which insurers lay off a large potential liability by buying their own coverage with a “reinsurer,” rose by 6% globally for January renewals. Insurers blame lower interest rates (reducing return on premium payments) and higher loss claims (including fights over COVID claims). U.S. insurers saw the largest increases in casualty rates, ranging from 10% to 30% for general liability.

TENTATIVE ASSESSED VALUATIONS DUE OUT NOW

The tentative assessed valuations for real property in New York City for the tax year beginning July 1, 2021 are due out now. Buildings should check the City’s website, CLICK HERE, to see how much they have increased, and be sure to file a “tax certiorari” claim with your tax cert attorney. Since every real property owner in the City will be filing for tax reductions, we can only hope that tax rates stay reasonable in light of the looming City and State deficits. (Your taxes are your assessed value multiplied by the tax rate.)

We will continue to keep you updated on PPP and other developments. If you need assistance on any of our topics, please contact one of our partners on our Co-op/Condo team.

Covid-19: Christmas Presents for Co-ops – Paycheck Protection Program (“PPP”) Amended to Allow Loans to Cooperatives

The Omnibus Spending Bill newly passed by Congress includes a provision specifically making housing cooperatives eligible for PPP loans. No matter what the bill ultimately looks like when it becomes law, we expect that provision to remain. As a result, cooperatives can now apply for PPP loans without fear of rejection. The amendments also apply retroactively.

Reservation of Funds for “Small” Businesses Could Help Co-ops. The bill specifically reserves at least $15 billion of the increased appropriation for eligible businesses with fewer than ten (10) employees. There are also simplified procedures for applying for and getting forgiveness for loans of less than $150,000. However, the maximum amount of a loan is still basically 2.5 times monthly payroll.

Contact your bank for an application. By now, your lender either has been authorized to make PPP loans directly, or has hooked up with an SBA loan specialist who can process the application on your lender’s behalf. Funds are not unlimited, so you should act soon.

Differences between April and December bills. For those few of you who didn’t hold onto our PPP guidance our April COVID updates, note that the use of funds has been liberalized in some material ways, including (a) only 60% of the funds must be used for payroll (the balance still must be applied to eligible uses); (b) covered uses of funds now include (among other things) payments for personal protective equipment for employees, capital expenditures to comply with federal COVID guidelines, payments for group health insurance for employees, and payments for protection against “public disturbances” not covered by insurance; and (c) the borrower cannot have more than 300 employees.

Are Condominiums and HOA’s Included? We have asserted repeatedly in these newsletters that Condos and HOA’s should be deemed “business concerns” to the extent that they have payroll and maintain their premises to protect their residents. With the addition of specific language including “housing cooperatives” to the list of qualifying concerns, though, our legal argument has weakened; specifically including one type of community association could imply that the drafters meant to exclude other types. (On the other hand, a recent Bankruptcy Court decision determined that Condo associations should be deemed commercial enterprises for purposes of the Bankruptcy Code.) Senator Schumer has indicated that he will try to persuade Congress to expressly incorporate condos and HOA’s into the language in future bills.

“Second Draw” Loans. The PPP also allows businesses to apply for a second PPP draw, provided (among other things) that their gross receipts for the quarter have decreased by 25% over the same quarter a year ago. While this could help charities and other non-profits whose contributions have diminished, we do not know of any community associations who have suffered to that extent.

Note: We could not find any definition of “Second Draw” loans. Therefore, it is not clear whether this refers to businesses that have already received PPP assistance, or whether “Second Draw” refers to the second PPP funding, i.e., all of the additional funds allocated under the program. For reasons beyond the scope of this E-Blast, we think that first-time co-op borrowers would be eligible for PPP funds regardless of any changes in their income. However, if it is the latter, then the 25% drop in income requirement would still freeze most co-ops out.

Other News. Believe it or not, new laws and court decisions have come down having nothing to do with COVID 19. We will update everyone in on some of these in our next mailing.

We will continue to keep you updated on PPP and other developments. If you need assistance on any of our topics, please contact one of our partners on our Co-op/Condo team.

HAVE A HAPPY HOLIDAY AND WONDERFUL NEW YEAR!

Thinking about the “When” . . . when drafting a dispute resolution provision in construction agreements

The importance of the dispute resolution provision in a construction contract should not be overlooked. This means addressing not only how the parties will resolve disputes between them (e.g., mediation, arbitration or litigation) but also answering the “when?” of that process. New York State’s suspension of filing deadlines in civil cases is coming to an end on November 3, providing a good opportunity to address the point.

In New York State, motions to compel arbitration awards must be made within one year of issuance of the awards, and to modify or vacate that award within three months of issuance. The deadlines comport with the Federal Arbitration Act, which requires arbitration agreements privately made between parties to be honored notwithstanding state laws or judicial decrees precluding such arbitrations. But in New York State, Governor Cuomo has issued successive Executive Orders suspending the filing periods under the Civil Practice Laws and Rules (CPLR), including for arbitrations. That suspension period ends on November 3.

Recently, a property owner relied on the Federal Arbitration Act to argue that our client’s application to modify an arbitration award was untimely because it was made more than three months after a “final” arbitration award was issued. We expect that argument to fail. As governing courts have held, the Federal Arbitration Act creates a body of substantive law without replacing the procedural rules that govern state court proceedings. Unless the state court in our case finds that Governor Cuomo’s suspension of the filing periods was invalid (a near impossibility for several reasons), our application will be deemed timely.

But our adversary’s point is well taken. In considering whether to resolve a construction dispute by arbitration, or even litigation, parties should think about the when in the process. For instance, does the period to confirm or challenge an award begin only when that award is “final”, or when intermediate awards are granted. If an arbitrator first issues an award on liability, and then conducts a further hearing on damages, must the aggrieved party challenge the award of liability even as a further hearing on damages is conducted? Construction agreements should clearly define the controlling date for purpose of determining when parties are required to act upon an award.

Upcoming presentation: On December 9 at 3:30 pm, Jacob Amir will be presenting at the virtual annual conference of the Associated General Contractors, New York State, on the topic of “Preparing for and addressing subcontractors’ failure.” Click HERE to register.

For more information, please contact:

Jacob Amir
jamir@sbjlaw.com

Condo/Co-op Projects and Alterations: Protecting Residents from Illness and Protecting Boards from Potential Liability

As Covid-19 safety procedures and regulations remain in effect, condominium and cooperative boards and their building managers would be wise to take measures to protect building residents (and contractors) from illness and insulate boards and owners from potential liability.

On June 8, 2020 non-essential construction projects in NYC were approved to resume after a nearly three-month Covid-19 shutdown. Since then, many and condo/co-op boards and individual owners and residents have taken the opportunity to conduct capital improvement projects and apartment renovations.

Like other industries and businesses throughout NYS, construction contractors are required to develop and implement a Covid-19 safety plan. This plan must outline how the contractor will prevent the spread of Covid-19 at its offices and worksites. Templates and guidance on formulating a safety plan can be found on the New York State Dept. of Health website, HERE.

Similarly, condo and co-op boards should develop safety plans for the conduct of construction projects at the building, including both capital improvement projects and individual apartment renovations. A board’s plan and requirements should be a condition on approving any work at the building. At a minimum the safety plan should require appropriate social distancing of workers (taking into consideration if the work is indoors or outdoors), limitation on contact with building residents, health screening of workers prior to accessing the building/work site, appropriate cleaning materials and personal protective equipment such as gloves and masks.

Boards and managers should also consider incorporating waiver and indemnification language into their building construction contracts, and require the same from contractors performing work within apartments on behalf of cooperative shareholders, condominium unit owners, and individual tenants. Contracts for building projects should be reviewed by counsel to ensure that appropriate language indemnifying the board is included.

When approving an individual shareholder or unit owner’s renovation application, the Board should condition such approval on the contractor providing a waiver absolving the board and management from liability for a Covid-19 claim arising from work within an apartment. The shareholder or apartment owner should indemnify the board and management from any such claims.

Condo and co-op boards and their managers would be wise to consult the building’s attorneys to obtain appropriate waivers and indemnification agreements before approving construction and alteration projects.

For more information, please contact:

Matthew Smith
msmith@sbjlaw.com

Covid-19: Burdens Facing Co-ops and Condos in 2021 and Beyond

While New York State remains preoccupied with controlling the latest COVID surges, the NYC Council has imposed new burdens on cooperatives and condominium in the name of safety. What are we facing for 2021?

1. NYS Quarantine Rules Change Again. As of November 4th, persons spending more than 24 hours in another state are required to self-quarantine for three (3) days and get COVID-tested. If the test is negative, they are released from quarantine. No distinction is made between neighboring states and other states. Enforcement remains the responsibility of your local or state Department of Health. Call 1-833-789-0470 to report quarantine violations, or click HERE.

Taken literally, everyone who commutes to work from New Jersey or Connecticut has to quarantine every Monday! Good luck with that.

Quarantine is also required for those returning from travel outside of the United States if the country to which they have traveled is classified as a level 2 or 3 warning by the CDC.

2. NYC Council Narrows Exceptions to Emissions Caps. By 2024, buildings in NYC which are 25,000 sf or larger need to reduce their carbon footprints by significant amounts. The amount by which the carbon footprint is to be reduced depends on the nature of the use and occupancy of the building. Previously, buildings with at least one rent-regulated apartment had been exempted from these requirements. The City Council has just reduced that exemption to cover only those buildings having at least 35% rent-stabilized or rent-controlled apartments.

Who this Change Affects: All converted Co-ops with “Unsold Shares” and Condos with “Unsold Units” who previously thought they were exempt.

2024 is not that far away! Buildings will need to hire energy consultants and then implement energy reduction plans. Low-hanging fruit like switching to LED lighting likely won’t meet the City requirements. Special Note: Requests by buildings for changes in building emission limits due to financial hardship or special use and occupancy requirements are due by July 1, 2021.

3. Lead-Based Paint Inspections to Cost More. All owners of units in buildings constructed before 1960, or in buildings built before 1978 (if the owner had actual knowledge of lead paint in a unit), had to conduct inspections for lead paint contamination within one year after a child 6 years old or younger moved into a unit. Co-ops and Condos had to inspect the common areas of such a building as well.

Now the inspection must be conducted using “x-ray fluorescence” (XRF), a more expensive method. Environmental consultants in the City are gearing up for the new technique.

4. Reminder: Local Law 11 Façade Inspections Also to Cost More. As reported earlier this year, Local Law 11 façade inspections will now need to be conducted using multiple scaffold drops rather than simply using binoculars. Prepare for a substantial price increase in the cost of inspections. Façade repairs will also need to be made sooner in order to comply with Local Law requirements for a “safe” building.

In the past 24 months the City Council has imposed significant reductions in emission caps by 2024, required installation of automatic elevator brakes by 2027, and tried to mandate solar or photovoltaic “green” roofs for new buildings (apparently the last has been scaled back in response to broad resistance). Now we are seeing 10+% increases in insurance premiums, significant COVID-related labor costs and growing maintenance arrears. Luxury Co-ops and Condos now have to pay “prevailing wages” to their employees in order to continue to receive the co-op/condo tax abatement. And what will our real estate tax assessments and tax rates look like for the tax year beginning July 2021?

Some Good News on the COVID Front. Most buildings have developed protocols to deal with reopening issues, such as access to amenities, making alterations, holding open houses, and running Annual Meetings. What have we learned?

A. “Virtual” Annual Meetings work. Attendance has not slumped when meetings go online. As long as the host has laid out clear guidelines for speaking (or chatting) and voting, the meetings move smoothly. Soliciting nominations from the floor is cumbersome (since you can’t add them easily to online ballots). Therefore we are recommending that you either (a) set a deadline for nominations to the Board before sending the formal Notice of Meeting (so that you can send the Notice, a Proxy with the names of all nominees, and biographical statements in one package), or (b) solicit nominations in the Notice and then delay sending the Proxy until the nomination deadline has passed, so that the “official” Proxy contains the names of all nominees.

B. Your By-laws or Prop Leases May Need Updating. Many associations who changed their By-laws to hold Zoom meetings have started to consider wholesale updates. For Co-ops this is easy (it usually only takes a Board vote), but for Condos it can take a 2/3 vote of unit owners. Suggestion: combine these “housekeeping” changes with one or more substantive modifications that you have put off, e.g., unit owner insurance requirements, fine schedules, changing borrowing or repair limits, even smoking. These stimulate attention, and owners are paying more attention right now.

We will continue to keep you advised of current developments affecting cooperatives and condominiums. Have a Happy November!

For more information, please contact:

Kenneth Jacobs
kjacobs@sbjlaw.com