BY JOHN KIRITSIS, ESQ., CPA, MBA, MS, JD, LL.M
Conducting New York City (NYC) co-op board meetings over the phone can be convenient, especially when board members are not able to attend in person. However, there are potential legal pitfalls and considerations to keep in mind to ensure that these meetings are conducted in compliance with co-op bylaws, state laws, and best practices. Here are some legal pitfalls to be aware of:
- Quorum Requirements:
Most co-op bylaws require a quorum (minimum number of board members) to be present for a meeting to be valid. Make sure that the quorum requirement is met, even for phone meetings.
- Notice Requirements:
Co-op bylaws often specify the notice period required for board meetings. Ensure that all board members receive proper notice of the phone meeting to avoid challenges to the meeting’s validity.
- Open Meetings Laws:
Some states have open meetings laws that require certain board meetings to be open to co-op shareholders or unit owners. Phone meetings could be subject to these laws, and precautions should be taken to ensure compliance.
- Transparency and Recording:
Maintain transparency in board proceedings and decisions. If possible, record the phone meeting to have a clear record of discussions and decisions.
Sensitive matters might be discussed during board meetings. Ensure that only authorized board members participate in phone meetings and that the confidentiality of the discussions is maintained.
- Access for Shareholders:
If co-op bylaws require that shareholders be given the opportunity to attend board meetings, consider how to provide them access to the phone meeting while still maintaining the integrity of the meeting.
- Proxy Voting:
Check co-op bylaws to determine whether proxy voting is allowed for phone meetings. Some bylaws may not allow proxy voting in such situations.
- Adequate Discussion:
Ensure that all relevant topics are adequately discussed during the phone meeting. Board members should have the opportunity to participate fully and express their opinions.
- Voting Procedures:
Clearly establish procedures for voting during the phone meeting, including how votes are conducted, recorded, and confirmed.
- Technology Issues:
Be prepared for potential technical glitches or connection issues that might disrupt the phone meeting. Have a plan in place to address such situations.
- Minutes and Documentation:
Keep accurate minutes of the phone meeting, including a summary of discussions, decisions, and votes. Minutes should be circulated to all board members for review and approval.
- Legal Counsel:
Consult with legal professionals experienced in co-op law to ensure that your phone meetings comply with relevant laws, regulations, and co-op bylaws.
Overall, while conducting NYC co-op board meetings over the phone can provide flexibility, it’s essential to approach them with caution and attention to legal requirements. By adhering to proper procedures, maintaining transparency, and seeking legal guidance when needed, you can avoid potential legal pitfalls and ensure that your co-op board meetings are conducted effectively and in compliance with applicable laws.
Citations, References and Potentially Useful Resources for Further Information:
New York State Constitution
Federal Securities Regulation
New York State Martin Act
New York Condominium Act
New York State Security Regulations
New York Business Corporation Law
New York Limited Liability Company Law
New York Uniform Partnership Act
Federal Internal Revenue Code
New York State Tax Laws, Rules & Regulations
New York City Tax Laws, Rules & Regulations
Winston Churchill Owners, Inc. v. Regents Real Estate Associates
Board of Managers of the Park Regis Condominium v. Park Regis Owners Corp.
Park Sutton Condominium v. 447 E. 57th St. LLC
28 E. 10th Street Corp. v. Veras
Riverside Syndicate, Inc. v. Munroe
Essex House Condominium v. Marks
The Parc Vendome Condominium v. Atkinson
54-56 Meserole Street Owners Corp. v. Rossi
The Beekman Regent Condominium v. Bottiglieri
Chelsea 19th LLC v. West 19th Street Realty LLC
New York Department of Finance
New York City Department of Buildings
New York City Bar Association
New York State Bar Association
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