Page 10 - Chicago Cooperator Spring 2020

10 THE CHICAGOLAND COOPERATOR —SPRING 2020 CHICAGOCOOPERATOR.COM neighbors might have misgivings about York City, agrees that there are often fac- strangers in the building or other potential tions in co-op and condo boards and and they voted to remove the president liabilities. The duty of obedience, the third duty have groups that side one way or another,” incumbent upon board members, calls he says, but at least they are designed for upon them to understand, fairly enforce, votes to go one way or the other. “What’s just don’t jibe,” says Schlossberg. “They and personally abide by the governing great about most boards is that they are will nitpick each other. When you live in documents, policies, and protocols of their oddly numbered,” continues Freedland, a condo or co-op, you must realize that community. “The members of the board “having five or seven or nine members, you live in a community, and when people owe a duty to keep within the powers of avoiding deadlocks on votes.” the corporation and within those of the board of directors,” explains Davidson. As trolling factions is to remove and replace of this type is to try to arrive at some sort such, board service in a co-op or condo is the offending board members. “If share- not for those who want to write their own holders are unhappy with what a board is ing groups, whether that’s in the commu- rules, or eschew them altogether. Representing a Splintered Board Kris Kasten, an attorney and principal call a special meeting as provided in their mends having conversations to under- of Altus Legal, located in Chicago, says bylaws. At that meeting board directors stand opposing viewpoints. Taking time at factions are common enough in condo- minium governance. They can become problematic for an attorney representing Condominium owners can call a meeting see—what kinds of changes they’re look- an association when the factions within a of the association and demand to hold new ing to effect by joining the board—will go board begin to think that the attorney is elections. They can air their grievances and a long way to clearing up conflict and un- choosing a side. “My primary contact is hold a vote. If a majority of owners vote to derstand what the shareholders want. “The generally with the board president,” says remove the board, a new election is held, goal is to create a cohesive board,” sums up Kasten. “Different factions may think I’m and a new board is seated—hopefully one Schlossberg, and the most important com- siding with one group or another, but I’m that is more amenable to hearing and act- not. My responsibility is to the associa- tion. I have to represent them and hear all that the meeting and elections be held with seriously. sides out. I make an effort to speak with strict obedience to the association’s bylaws everyone on the board. I will ask them if and the state’s condominium statutes; oth- I can speak with them all at once, at the erwise removed board members could says. “Create rules for decision making. same time.” The opportunities to do so are challenge the action, further embroiling Then survey the board members. How do limited, he laments, but his intention is to the association in conflict. open the discussion to everyone so that he doesn’t hear just one perspective. Howard Goldman is a partner with the ager with Gumley-Haft in New York, de- firm of Goldman and Pease, located in scribes a situation where a contingent of ence, there is often nearly 100% agreement Needham, Massachusetts. He represents shareholders was unhappy with the board’s among board members, because solutions numerous condominium associations and planning and management of a building are usually pretty simple. “If there are dis- says that factionalism happens all too eas- ily when “There is a controlling group on they weren’t being heard by the existing And importantly, acknowledge areas of the board, and those not in agreement feel board, so they collected a large number of conflict to work toward a common solu- out of control and frustrated. Often, those proxies at the next election and replaced tion. Once you have rules of the road you in these \[latter\] roles feel disenfranchised three board members with new directors can manage conflict.” and \[feel\] that no one is listening to them.” Goldman says there are two potential Instead, the overall effect of the change tion shouldn’t permeate every issue. Work approaches to getting controlling board was to stymie the project further. The new it out and get on with it.” members to listen. One is to take a deriva- tive action—a lawsuit brought by a corpo- ration shareholder against the directors, point, concluding that they then wanted management, and/or other shareholders to start the project over from scratch. The of the corporation, for a failure to uphold project took five years to complete when it their duty to the corporation as a whole. should have taken only a year or two. This In the world of condominium ownership, a was a case of “be careful what you wish derivative action can be brought by an in- dividual or group of shareholders to force position of the board, but at the expense the board to perform its fiduciary respon- sibility under the community’s governing documents. A good example of how and why this rectors. His response is that “Directors approach would be used is when a board of can’t remove other directors from a board. directors doesn’t want to undertake a large They can only be removed by shareholders. and/or expensive project such as extensive But they can remove a director from a spe- roof repairs, but the majority of unit own- ers want the work done. The derivative ac- tion would compel the board to act on the in which a board president was suspected community’s preference, even if it doesn’t of dishonest dealing. The rest of the board align with their own. Andrew Freedland, an attorney with Since directors can’t be removed from a Anderson Kill, a law firm based in New board by other directors, ultimately, the buildings. “It’s not unusual for a board to from the board. The other method of dealing with con- doing,” says Freedland, “I have seen recall nity as a whole or on the board. “People elections. Shareholders or unit owners can want to be heard,” she says, and recom- can be removed and replaced.” Kasten says the same is true in Chicago. ask the different factions what they want to ing on different perspectives. Kasten urges to listening and taking others’ concerns Real Life Examples Michele Schlossberg, a property man- system replacement project. They felt that agreements,” he says, “hold a discussion. who might handle the project differently. board members wanted to examine every document involved with the project to that for”—the shareholders changed the com- the timely completion of the project. Freedland says he often gets questions about removing directors from other di- cific position, say president or secretary.” Schlossberg recounts a related situation asked him to step down—but he refused. shareholders had to call a special meeting What Can a Manager Do? “Conflict can happen because people don’t, it can become contentious.” She sug- gests that the best way to handle conflicts of reconciliation between the two oppos- the first board meeting after an election to ponent of achieving that is a commitment Davidson shares a similar approach. “Identify solutions to each conflict,” he they view suggested solutions, ranking them from ‘strongly agree’ to ‘strongly dis- agree’? Produce a summary of the results.” Davidson points out that in his experi- Freedland sums it up this way: “Dissen- n A J Sidransky is a staff writer/reporter with The Chicagoland Cooperator, and a published novelist. COPING... continued from page 1 the definition we use—is a disability that substantially limits a major life activity. HUD rules apply nationwide. States may expand upon them, but not diminish them.” The legal framework under which we consider disabilities is further defined under the Americans with Disabilities Act (ADA), explains Mark Hakim, of counsel at New York-based law firm Schwartz, Sladkus, Reich, Greenberg & AIRBORNE... continued from page 1 Atlas. “The Americans with Disabilities Act, as amended from time to time, is a federal law protecting those with legal disabilities,” he says. “Under the ADA, a person with a disability is someone who has a physical or mental impairment that seriously limits one or more major life activities, or who is regarded as having such impairments. \[It\] includes physical or mental impairment that substantially limits one or more of a person’s major life activities such as breathing, seeing, hear- ing, walking, sitting, standing, sleeping, caring for yourself, lifting, or learning. It also requires having a record of an im- pairment and/or being regarded as hav- ing an impairment. Asthma and allergies are generally considered disabilities un- der the ADA. Respiratory and other con- ditions caused or exacerbated by smoke and chemicals may also constitute a dis- ability under the ADA.” Lisa Magill, an attorney with Kaye, Bender, Rembaum in Pompano Beach, Florida, points out that the criteria for designating an impairment are “very sub- jective, as it’s defined by a medical pro- fessional of the person seeking redress.” This factor in determining disability can put a great deal of uncertainty on the co- op or condo association dealing with an issue of environmental sensitivity. Key among the considerations to be taken into account if a resident is re- questing accommodations to address an environment-sensitive health condition is whether or not what they’re asking for can be considered ‘reasonable’ under the law. Sima Kirsch, a community law at- torney located in Chicago, observes that “Although the special accommodation requested must help the owner overcome the limitations that arise when one or more of their significant life functions are impacted, the request will unfortu- nately not be considered reasonable if the application imposes undue financial bur- den upon the HOA.” Associations that are constrained by budgets, logistics, or spatial consider- ations might not be able to accommodate every request. “Nevertheless,” Kirsch explains, “if there is no impact on the association or others, it would be a dis- criminatory act if the HOA refused to al- low the owner to perform modifications \[or other preventive measures\] at that owner’s cost. If modifications are needed to fully use and enjoy their premises…it’s best for the board to permit \[the altera- tions\].” Smoke Secondhand smoke is a known health hazard and has become a major issue in both residential and commercial settings. Smoking is banned in many public and semi-public places by local ordinance. The governing documents of many con- dominium and cooperative communities continued on page 12