Does that mean before you plunk down that wad of cash you have to be told whether the co-op or condo you’re buying into has been invaded?  At least some co-ops seem to think so and have recently begun including such disclosure as part of their sales and sublease applications. But is that what they should be doing?

On its face, the law applies only to rentals, That means, at least in theory, the landlord has to tell you before you enter into a lease whether there has been a bedbug invasion during the prior year in any apartment or the common areas of the building so you can run away before you sign.  Sounds good, but the cynic in me has to believe that landlords (with the help of creative counsel) will find ways to circumvent such damaging disclosure just like lots of restaurants have avoided posting Health Department Grades of less than A, by tying up any unfavorable decision in lengthy appeals.

Now some co-ops are starting to include bedbug disclosure forms in their sales and sublease applications. Is this required?  Does it make sense?

By its terms, the law applies only to rentals, and no court to date has extended it to co-ops. A number of laws passed to benefit renters have by judicial decision been extended to co-ops including, The Pet Law, The Roommate Law, and The Warranty of Habitability The rationale is that like renters owners of co-ops are also tenants under their proprietary lease with the co-op (through its board) acting as landlord.

Since you own your apartment outright in a condo, you’re your own landlord so you wouldn’t get the protection of any laws originally intended to protect renters, such as the bedbug disclosure requirement.  But if you rent out your apartment your tenant might get such protection because then there is a landlord/tenant relationship.

Until some court decides definitively, co-ops can only guess what to do.  Some are erring on the side of disclosure, at least where it’s good news and there are no bedbug infestations to report.

So who is supposed to do the disclosing? In rentals, the answer is clear because the landlord owns the entire building and has access to every apartment.  But in co-ops, apartments belong to individual shareholders so the co-op powers that be may not know what’s going on in a particular apartment unless they are told.  That’s why, for example, The Pet Law requires that residents’ dogs be open and notoriously harbored for at least three months before knowledge is imputed to management.  For now most managing agents don’t want to be on the hook for saying something they haven’t verified so they require selling shareholders to sign off on the bedbug disclosure.

But that makes no sense, and arguably is not in compliance with the law.  The predicate for application of the disclosure law would be the landlord/tenant relationship existing between shareholder/tenant and co-op (through its board and by extension its managing. agent). No such relationship exists between selling shareholder and buyer. Moreover the law specifically states that disclosure be made by the managing agent or the owner, which in this context generally has been defined to mean the building owner, not the individual shareholder.

Plus there is no penalty under the law for non-disclosure, but there could conceivably be liability for misrepresentation.  Say the disclosure form states there have been no bedbug infestations for the past year and it turns out the purchaser finds a family of them when he moves in.  Now that’s a potential lawsuit in the making.

That’s why, all things considered, maybe for now it’s best that co-ops do nothing   Silence sometimes really is golden.

“I need a key,” Ms. X demanded of the Board.

“A key?”

“Not for my apartment.  I have a fichet lock and key and plenty of spares, including the one in the computerized lock box at the doorman’s station – just in case.  No, I want a key to the fire stairwell.”

And I thought owners in my building made unusual requests.

“The fire stairs?” the Board asked, perplexed.

“Yes, so that I can make a quick escape in case of a terrorist attack,” came the response, Ms. X seemingly oblivious to the fact that if Al Qaeda or some other terrorist Bad Boys really targeted her co-op odds are everyone would be dead and a key to the staircase wouldn’t do anyone any good.

 “No,” said the Board, a decision which seemed entirely reasonable to me.

But not to Ms. X, who got elected to the Board to get a key. I’ve seen people get on boards for every conceivable reason from rocketing to the top of the storage locker list to circumventing renovation regulations, though I gotta admit that seeking out a special anti-terrorist perk is a first.

No sooner did she have a seat at the table than she figured she had the key to victory.

Here’s the thing.  Getting on the Board gives you power, but it doesn’t necessarily get you what you want.  For that you have to get at least a majority of directors to go along, which lots of times they will, especially when it’s something that can be kept under wraps. Only a key to the staircase is the kind of thing everyone could find out about, and then they’d all complain why does Ms. X have a key when they don’t have one, and the Board would have an even bigger mess on its hands.

“Put the key on the agenda,” she declared, figuring her fellow directors would fall in line now that she was one of them.

Instead it sparked a controversy.

“You have to recuse yourself because you’re interested in the outcome,” they told her, which isn’t exactly true because even though it’s pretty standard practice it’s not required by law.

But the law does require that a majority of the board, not including the interested director, must approve the transaction.

Result: The Board voted again to deny the former shareholder and now fellow director the means of special entry/exit to the fire stairwell. Ms. X is still keyless but no longer clueless as to how the system works. Maybe next time she’ll use that new-found knowledge to protect all her fellow shareholders against the forces of darkness, which hopefully will never arrive.

A few months back, I was contacted by an ex-Marine officer (or was he from the Army) I really don’t remember. I do remember that he claimed that he’d lost his post and pension because one of the former board members in his co-op had it in for him, and reported a pile of disinformation to his superiors, which he said got him canned. Given the way the letter rambled on, I wasn’t sure if his tale were fact or fiction. 

Except his wasn’t the first case reported to me of board members threatening to disclose, or actually disclosing, alleged misdeeds by their fellow directors — to employers, the SEC, and other agencies, in order to get their colleague in trouble, and out of their hair.

Now the complaints are coming from people who never crossed the threshold of a co-op or condo.  Judging from recent communications, it seems that inmates aren’t too thrilled with their living arrangements either (which I understand), and figure I can solve their problems (which I don’t).

Just a few days ago I got a letter from an inmate at a correctional facility in Upstate New York.  I knew this even before I opened the letter because prison protocol apparently dictates that the inmate post identifying information on the outside of the envelope, maybe so the recipient can decide whether she wants to open it. I figured a letter from prison is probably really safe because of all the screening it has to go through.

As best I could tell, which wasn’t easy because the letter was written in nearly invisible ink, using prison lingo unfamiliar to me (not ever having served time myself), Inmate X claimed that some of the corrections officers didn’t treat him right when they accompanied him from his cell to the clinic. He says he was roughed up as payback for a grievance he’d filed earlier that day.

Mind you, I don’t take the complaint lightly.  I figure there are lots of not-so-nice guys in prison, both among the guarded and the guards.  And, yes, I’ve even been involved in the middle of  altercations among residents in fancy buildings. But I’m not a criminal lawyer. Maybe on The Good Wife a junior associate can defend a suspected murderer in one episode, and on the next take the part of some real estate owner, but that’s not how it works in real life.

What really made me nervous, though, is that Inmate X said he had gotten my information from a fellow prisoner, which makes me fear that I may be getting a slew of complaints from other prisoners in different facilities not satisfied with their living conditions.

Indeed, Mr. X is not the first inmate who has sought my assistance in this regard.  When my book, The Co-op Bible, first came out I got a bunch of letters from prisoners in several states with grievances they wanted me to address, including one I specifically remember went on for fifteen handwritten pages.

I’d like to help, I really would, but I have my hands full dealing with the complaints of residents who may break a House Rule (but usually abide by the law), and can be more demanding about a lot less.

You

In any corporation, including co-ops (and by analogy condos), the ultimate authority should rest with the board. Management reports to it. But the practical reality is that in lots of buildings it’s the other way round – the management company tells the board what to do.

Here are a few recent examples of what can happen:

• A newly elected board member at a large West Village co-op called to request a copy of the Management Agreement from their property manager, one of the largest in the City, and was told, “No.”
• A director at another Downtown building asked that bank statements be provided with the monthly financials to be told by the management company that they are provided only to the Treasurer.
• The board at a co-op on the Upper East Side only found out after the fact that its transfer agent had directed the corporation’s lawyer to prepare and send out agreements to a buyer who wanted to purchase an apartment in the name of a trust.
• Directors at a Forest Hills building came home to learn that a long-time doorman had been terminated by management for getting into an altercation with a shareholder.
• A new board member at a Rego Park co-op asked to see the invoices submitted by the building’s counsel for the past year, and was told by management that all requests had to be channeled through the President.

Why does this happen? Because boards allow it to, sometimes unwittingly, other times not. Since board members are volunteers, some figure the paid professionals know better.  Or they come from the automatic pilot school of management which teaches that the corporation will run itself. (Trust me, it doesn’t.) Or a new director is too intimidated to take on the very managers that it should be supervising.

If this is how your building is being run, which you may not even know, there is a problem because no one is in charge, at least not those who should be, a role reversal that can come back to haunt all of you. 

There are a few things your board can do to reorder the balance of power:

• Remind the management company that it is the principal and they are the agent – translation: THE BOARD IS THE BOSS.
• If that doesn’t work, tell them (which they should know) that under the law, directors have the absolute right to see any corporate records so they’d better turn them over, and not impose any conditions on doing so.
• If the managing agent is retaining counsel (or any other professional) on their own, tell both parties that only the board is authorized to take such action, and that nothing can be sent out without board approval.
• To be sure that management doesn’t fire anyone without the board knowing, which can result in significant potential liability if not done right, insist on a provision in the management agreement that board approval is required before anyone can be terminated – not standard in most agreements.
• If management refuses to abide by any of the above, consider ending the relationship – sooner rather than later.

1. I will not assume that all board members are bad. The rule in this country, including co-ops and condos, is innocent till proven guilty.  No matter that rumors are rampant of directors getting special privileges the way politicians push through earmarks, unless you can prove it – admittedly hard to do – give them the benefit of the doubt.  Or if you’re really serious, run for election so you can get access to the information that may document your case.

2. I will not complain unless I’m willing to act.  It’s easy being an armchair apartment owner and blaming the power brokers for everything you think is wrong in the building – the lobby is ugly, the windows don’t open, the maintenance increase is too high. But just maybe they’re right and there’s a reason for what board members are doing. 

3. I will be nice to my neighbors.   Yes, this may be counterintuitive given that nasty is in – indeed downright profitable.  Just look at those housewives of New York or New Jersey or wherever, who are having cat fights and raking it in.  But they don’t live next to each other and you do.  So it’s a matter of self preservation because whatever you do to annoy the person above or below, they can do you one better.

4. I will not use staff to do my dirty work.  Whether it’s cleaning up after your Pomerian that left a puddle in the elevator or running interference with the guy downstairs who blares, the job is yours, not theirs.

5. I will not use the excuse, “I don’t know anyone.”  This is the standard answer owners give when they don’t want to get involved. I would help if I could, but I can’t because “I just don’t know anyone.” It’s a cop out. Even in New York where no one knows hardly anyone else, everyone know someone, and together the power of ones can make a difference

6. I will obey the rules of dog etiquette even though I’m not a dog.  Everyone knows the real problem is not pets, but their people, the only ones who can read the rules to begin with.  This year Mr. X has demanded that long-haired dogs be required to use the service elevators because they are more likely to carry pathogens or make a mess, thereby creating potential class warfare over disparate treatment of dogs. Except our building has always required all dogs to use the service elevators, not that anyone ever does. Here’s hoping this year may be different.

7. I will not send hate mail.  It can cost you friends and make you enemies, and most of all, won’t get you what you want.  Experience has taught that killing with kindness (even if you don’t mean it) is much more effective because it throws people off guard, leaving them little choice but to respond in kind. So whether your complaint is with the board or a fellow owner, a civil communiqué, signed and dated, so they know it’s from a real person, not a plant, is the way to go – at least to start.

1. I will check my ego at the boardroom door. (You may keep your id since its unconscious so no one will know about it.)  But a display of unchecked ego, a.k.a. arrogance will undo any good you may have done or will do, and land you in the penalty box.  Hubris cost our Mayor a plunge in popularity when he ignored the people and gave himself another term, and forced our former governor from office for assuming he was too powerful to get caught doing you know what. Don’t let it happen to you.

2. I will read every sales application Potential buyers probably assume it takes forever to get approval because those directors are lost in translating the financial minutia in your multi-pound submission. But plenty of board members, especially in condos and buildings with condo like rules that have only a right of first refusal, hardly give them a glance, figuring if they’re not going to buy the apartment, why bother.   It’s time to turn over a new leaf – or do away with applications.

3. I will not engage in deficit spending.  Maybe the federal government can spend more than it has because it can print money on demand, but board members can’t which is why even in this tight economy the budget for the new year has to be balanced. If it’s not the board has to get money from somewhere – raiding reserves, taking out a loan, drawing on its credit line – all of which will only delay the day of reckoning and dig the building into a deeper hole.

4. I will not go AWOL. This can be a treasonable offense for enlisted men and women, but elected board members often go scott free because no one (except fellow directors) knows they have dropped off the radar. So if you don’t plan to do anything, don’t run. If you do but circumstances change legitimate or not – you get a new job or got married or simply can’t take it anymore – don’t just disappear, leaving board members wondering if you’re dead or alive, or worse, who will cast the deciding vote.  Do the right thing: tender your resignation after giving them a chance to find a working replacement.

5. I will not use staff as spies.  Building personnel are members of the 32BJ service workers union, not the CIA, though probably they could give those investigators some lessons on intelligence gathering. Doesn’t matter. If you want to use your power to ferret out wrongdoing by fellow residents, don’t make staff your accomplice by pumping them for information or sending them into shareholders’ apartments They’re there to maintain the building, not serve as undercover agents.

6. I will treat everyone equally.  This is a hard concept for many would-be directors to grasp. But it is one you must master, even if it takes remedial training, because that’s what the law requires. This means you can’t use your position to reward friends and punish enemies. Whether you hate them or love them, or somewhere in between, you have to treat them all the same.

7. I will not engage in vigilante justice.  Every building has House Rules, but they don’t allow you to take the law into your own hands. Remember, you are a board member not a one person police force. So you can’t make residents spread eagle or demand they empty their pockets if you think they’ve smoked a joint or coerce them into making video taped confessions

8. I will not assume that things get done by magic.  As a board member you can’t just conjure up results, but have to accomplish them the old fashioned way. Your building is a multi-million dollar business that requires regular hands on care and feeding.

9. I will remember that I was elected to serve my constituents, not myself.   This notion may not come naturally in this era of entitlement in which paid politicos help themselves to earmarks and apartments and lots more.  But you live with your constituents so better watch out — for your sake and theirs.

OK, maybe these resolutions are harder to keep than a promise to shed ten pounds, but you’ll be doing a service not only for yourself but for all your fellow owners.

Catering your building’s Christmas (excuse me, holiday) party would challenge even Martha Stewart because you must appeal not only to residents’ palates, but also their politics.  I’m glad the planning ordeal is over and I can eat and greet at our party next week.

For years we had a peaceful and ecumenical affair, with food to satisfy every persuasion – rugelach and bouche noel, bagels and lox and baked ham. Everyone went away happy and sated.

Then some grinch-like heretic with a taste for raw fish, substituted plates of sushi for real food, a decision that went over about as well as Obama’s tax cut plan and threatened to unseat the entire board at the next election.

Since then catering our holiday party has been a dangerous undertaking, threatening the jobs – or rather, non-jobs – of board member planners.

In the wake of the financial collapse two Christmas’ ago, the board considered abandoning the party altogether as an austerity measure.

Last year with the economy still in the tank, the board scaled down the party to half its former self (and cost) – except for the tuna fish sandwich.

The tuna fish sandwich?  I only found out when I was designated this year to assume the party catering mantel.  I decided the best way to avoid a cuisinary confrontation was to order pretty much what the board had ordered the prior year.

Only when I checked out the order, there among the platters of assorted wraps and plates of crudite, the six foot long hero and piles of assorted cookies was a single tuna fish sandwich.  I figured it was a mistake and called the super, who in our building  is charged with pulling off the event.

“I’ll just go to Veselka and get one,” he sounded uncomfortable, but like a true diplomat didn’t’ disclose a thing.

“No, no, don’t worry,” I figured it wasn’t worth giving him the third degree over a sandwich.

The mystery was solved as soon as I called the caterer. 

“Should I put that on a separate plate specially for Mr. X?” she asked in a knowing tone of voice as soon as I  placed the order for the tuna fish sandwich.

I hesitated for an instant, recognizing the name of Mr. X as a prior board member whom I wasn’t on regular speaking terms with.

Now I had to decide whether to exercise my own current petty power to deprive my nemesis of one of the apparent perks of his past power, or take the high road and order the sandwich, even though every year I had decorated the building’s Christmas tree, the first thing Mr. X wanted to know was when it was coming down.

I chose the latter course, hoping that in this season of peace and joy the sandwich might be the first step on the road to rapprochement. Who knows?

But remember as you stand munching on some goodie at your building’s party, that in these environs food can be  as much a statement of power politics as an expression of love.

Why?  It’s expensive and time consuming to mount a legal challenge.  Just think of all those lawyers called in to contest the results in some of the just past too-close-to-call Tea Party races.  And you have to act relatively fast because New York law gives you only four months in which to challenge the annual meeting results.

None of that stopped three defeated insurgents at West Village Houses who recently fired the first legal salvo, seeking to overturn the results of the election just past on the grounds that the process was tainted in multiple ways.

Key among them is a a claim that personnel from Honest Ballot Association, which had been retained to ensure fair elections, secretly disclosed to the incumbent president, but not the insurgents, the total number of shares available to vote in person and by proxy.  Because their bylaws provide for cumulative voting, by which shareholders can cast all their shares for one candidate or divide them up at will among multiple candidates, the so called “number of votes in the house” gave the incumbents an unfair advantage in determining how to cast their ballots to win the maximum number of seats.

Instead of counting the ballots immediately following the election, as had always been done, they were taken to the Queens offices of Honest Ballot for tabulation the next day.  Only the two shareholders who’d been selected to act as election inspectors say they were left to cool their heels, not permitted to do their duty.

• We weren’t allowed to see, let alone count, any of the proxies or the ballots.
• The bundle of proxies and ballots submitted by the incumbent president were segregated from the rest and counted behind closed doors which made us questions whether they were properly tabulated.
• We weren’t allowed to see the disqualified ballots and proxies, nor told why they were disallowed.
• We saw people using “white out” on election-related materials.
• We stayed there from 10 A.M. to 4 P.M. but weren’t allowed to carry out our responsibility under the law to determine the validity of proxies and ballots, count the votes, and make sure the election was fairly conducted.

Only when the election results were posted, did the inspectors learn that 6 proxies and 7 ballots, representing more than 7% of the votes cast had been disqualified, a number they say, given the closeness of the race, was sufficient to have changed the election outcome and given the insurgents a majority.

So will they get a second bite at the apple?  It’s too soon to tell because the incumbents haven’t yet had their say, at least not in court, though according to a building insider they’re already doing some strategic politicking, advising owners that if a new election is ordered, it will cost another $10,000 to bring in an outside firm to monitor the proceedings. In the interim the court has ordered Honest Ballot to preserve all voting records of the election.

It’s not easy to force a redo, but it can be done. Earlier this year the court not only ordered a new election at a Brooklyn co-op, but also enjoined the existing board from binding the corporation to any unusual expenses till then.

Recently I got an email from a newly elected board member at a fancy Long Island City ultra high rise.

“We finally got a majority,” she triumphed, “only they re-elected the President even thought he’s got so many conflicts, special deals with contractors, free parking when everyone else pays. You name it.”

“Doesn’t sound good,” I responded though by now I’ve heard this kind of stuff often enough that I know never to take what the complainer says at face value.

“And he’s accusing me of   having conflicts.”

“Really!”

“Yeah, just because I’m a broker who sells apartments in the building.  Can you believe it?”

Earth to Ms. X. You do have a conflict – or at least the potential for one. As a director you should be protecting shareholders. But as a broker your interest is making commissions, which means you might favor your transactions over those of others.

“There’s nothing wrong with what I’m doing,” she obviously hadn’t heard what I was thinking, but didn’t say. “I mean it’s not illegal or anything.”

“Not illegal,” I agreed cause under New York’s Business Corporation Law so long as you disclose your interest to the others, if a majority of the board still votes for the transaction it’s OK.  But unwise,” I sensed I was fighting a losing battle. “You might think of recusing yourself,” I offered, though I realized that in co-ops and condos that’s often a meaningless formality.  So long as you have one ally on the board, odds are all you have to do is pick up the phone to find out what happened when you weren’t there.

Not a week later I found myself face to face with another conflict – this one a double. As part of my due diligence before hiring a architect for our building to review shareholder alteration plans I contacted a few references.

“They’re great,” the board member gave an unqualified recommendation. ”I even used them when I renovated my own apartment.”

“Before you got on the board,” I naively assumed.

“No, I was on the board,” he didn’t seem to get it.

How could an architect on the one hand hired to push through an individual director’s renovation plans, on the other protect the building against the parts of those plans that might adversely affect it or its shareholders?  He can’t — no more than the renovating board member could serve both his interests and those of the residents he’s supposed to represent.

But once board members go down this road there’s no turning back. One conflict inevitably leads to another till before you know it, that’s just the way business is done, all of which can lead to a Lindsay Lohan like train wreck, co-op style. The best way is to avoid temptation, and not go there to begin with.

That’s what grabbed my attention. HOME!  Where do you think that is for supposed members of a drug ring that made its profits in the Big Apple?  Odds are that for at least some of them it’s a co-op or condo, which means the guy next door to you could be a suspected dealer hoping to stay out of jail.

Does that make you nervous? Should it?  Is there anything you or the board can do about it?  They can go after a dope user for secondhand smoke violation, but drug dealing is a different story. And odds are the board is the last to know about the dragnet because, like you, its members are sound asleep at three A.M. when those Homeland Security Agents came calling.

Sometimes the police or FBI give a heads up to the super that something is going to happen, though for obvious reasons they don’t usually say when or for what or who they’re after and may require their confidante to remain silent.

If you want to know after the fact what happened, ask the doormen.  They’re the ones on guard during the middle of the night when the cops come rushing in, and the ones who see them going out with the alleged perpetrator.

That’s when the trouble begins.  Because once the news is out, which it will be in a matter of hours, if your building is anything like mine, a few people will go berserk at the thought that a would-be criminal is living in their expensive midst. Though, odds are, if the guy really is a major league drug dealer he’s got more money than any of them, even if it’s not exactly clean.

But he’s innocent until proven guilty, even if he’s your next-door neighbor, which means there’s not a lot that you can do, except wait along with him, for his day of reckoning. The police won’t tell the board anything because it’s an ongoing investigation, and if there was any incriminating stuff, they’ve surely removed it as evidence.

Sure there’s the old Objectionable Conduct standard, but unlike those morals clauses in celebrity contracts, it applies to behavior that takes place inside the building not outside in the street.  And odds are if the guy had the money to post a half million dollar bail, he has a good lawyer telling him to be on his best behavior till judgment day.

If the board is really suspicious, it can have the doorman keep a record of who’s visiting, a strategem that helped make a case against a  call girl that did business in my building years ago.  Otherwise you’re pretty much on your own, though you can take comfort in the fact that the cops will know from those monitoring bracelets what your neighbor is up to.