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CHICAGOCOOPERATOR.COM THE CHICAGOLAND COOPERATOR — FALL 2019 39 organization, and would likely bear the ex- pense in some way.” How the Garden State Handles It According to attorney John J. Roman, Jr., at Hubschman & Roman, P.C., in Palisades Park, New Jersey, co-ops are a rarity in the area, with the majority concentrated in the Fort Lee section of Bergen County. As such, the laws governing condominiums should prove more pertinent when considering con- fl icts of interest. “Th ere is very little legislation in the state of New Jersey that governs cooperatives; the only thing I can think of offh and is the Coop- erative Recording Act for new cooperatives that were formed aft er the legislation was en- acted, which was back in 1987,” says Roman. “And I don’t imagine that many cooperatives were formed aft er that date. “Th erefore, anything that’s going to con- trol confl icts of interest in co-ops or condos would be within the Not-For-Profi t Corpora- tion Act – which I would assume is similar in nature to the New York BCL, and contains some provisions about disclosure for interest- ed directors – or the New Jersey Condo Act,” he continues. “My advice to boards would be to avoid taking interest in referring out any business unless it’s been fully disclosed, at which point you must recuse yourself from voting on any issue wherein you’d have some potential confl ict.” Should a group of owners or sharehold- ers fear that a board member is engaged in self-dealing, there is action it can take before the subsequent election, whenever that may be. “Th ey could ask to have a board mem- ber removed for cause, if cause were deter- mined,” notes Roman. “Or they can inform the Department of Community Aff airs and have them get involved. Th at said, I’m not sure how strongly the DCA would react in these situations. Th ey might look at every complaint, but their actually coming out and taking action may be extremely limited. Bar- ring that, owners or shareholders can fi le suit, complain to management, put other residents on notice as to what’s going on, or advise the board attorney. And hopefully the board at- torney isn’t complicit, or they hadn’t failed to ask some pertinent questions. “As a board attorney myself,” he continues, “everything I get involved in, I always make it a point to ask about any potential confl icts and ask if board members have any interest in prospective vendors,” Roman adds. “For the most part – and I represent 40-some-odd as- sociations – it’s rare that you see anything like this. If somebody recommends an account- ing fi rm where their son works, normally the rest of the board will refuse to hire that fi rm. But I’m sure it goes on where, say, a man- agement company has a relationship with some vendors...I’d think these confl icts may be even more common with managers than with actual board members.” n Mike Odenthal is a writer for Th e Chicago- land Cooperator. for the association, they do not need their own insurance coverage,” says Mackoul. “In the event that they were injured on the job, the association’s workers’ compensation cov- erage would provide benefi ts. In the event the staff member caused damage or injury to someone and were sued, the association’s general liability coverage would respond and defend them. Th e issue is when a staff mem- ber is working for a resident, and is being paid directly by that employer. Once a staff mem- ber is being compensated by someone other than the association, that staff member is not working for the association at that time. Were they then to be injured, they could conceiv- ably be ineligible for workers’ compensation benefi ts. And if they were to cause damage or injury and were sued, they would not be covered under the association’s general liabil- ity policy, as they may not be considered an employee at the time they caused the damage or injury.” Per the above, boards and staff alike have to be wary when a resident approaches with a request or complaint that would require work to be done to their unit. “Realistically, if something doesn’t fall into what is the as- sociation’s responsibility, such as hanging cabinets in someone’s unit, then the in-house staff should not do it, especially if it’s some- thing that the staff is not qualifi ed to do,” says Mackoul. “In the event the work isn’t done right or causes damage or injury, the associa- tion is going to be responsible for fi xing it or responding to a lawsuit by the unhappy resi- dent. Poor claim history is the single biggest reason why insurance premiums increase. Th e resident should hire their own contrac- tor to perform the work and make sure that they have insurance in place, naming them, the association and property manager as ad- ditional insureds. If a staff member is going to be doing for work for a resident for which they will be paid, then that staff er should maintain their own workers’ compensation insurance and general liability insurance as, if they are being paid and are uninsured, that’s the equivalent of allowing an uninsured con- tractor to do work in the building.” While it may seem fi nancially preferable to let someone who professes knowledge of a particular repair handle it at little cost, the risk of injury or damage more oft en than not nul- lifi es any savings and then some. A board is well-advised to consult with a property man- ager or even an attorney before attempting to deploy a staff er to engage in any endeavor that may be outside their normal range of function, lest the consequences prove dire. n Mike Odenthal is a writer for Th e Chicago- land Cooperator. DIY/Y-NOT continued from page 33 drop year-over-year, while the number of condo sales was 4,398, a 3.3 percent dip from July 2018. Th e same pattern also character- ized condo activity in Chicago in that same month: the median sales price was $331,750, a 1 percent decline from July 2018, while the number of closed sales was 1,626, a 7.5 per- cent dip year-over-year. All in all, statewide home sales (includ- ing both single-family and condo properties) in July 2019 saw the number of home sales grow by 0.3 percent (16,357), and the me- dian sales price up 2.6 percent ($219,348) year-over-year. In a statement, Ed Neaves, president-elect of Illinois Realtors, said on the organization’s website: “Consumers are well positioned in this more balanced market where buyers still stand to reap modest gains, and sellers benefi t from more stable pricing. Plus, interest rates continue to be attractive, making it easier for the on-the-fence buyer to justify looking for a home.” n PULSE continued from page 5 The Official Roofing Partners of the Chicago Wolves R A I N C O A T R O O F I N G Whether it is an emergency repair, a scheduled maintenance visit, a thorough inspection to create a budgetary plan, or a pre-construction meeting to go over replacement needs; Raincoat Roofing will perform at any commercial or industrial property of any size and scale. 708.681.5757 W W W . R A I N C O A T R O O F I N G . C O M See us at Booths 619, 621