Page 10 - SFL Cooperator Fall 2019

10 THE SOUTH FLORIDA COOPERATOR
—FALL 2019
SOFLCOOPERATOR.COM
sions.
“That said,” she continues, “meeting min-
utes should be minutes. They should not be
a transcription of the entire meeting. Such a
document could be used against the associa-
tion and could result in association liability.”
Even when withholding some informa-
tion from unit owners seems like the prudent
thing to do, a board should still consider how
owners may react to the basic idea of being
left out of the loop. Moriarty recalls one in-
stance in the middle of a construction de-
fect litigation: “A group of unit owners were
demanding the release of the board’s expert
engineering report. On advice of counsel,
and to preserve privilege, the report—which
had been prepared in anticipation of litiga-
tion with the developer—was not disclosed.
The board didn’t withhold the report to keep
it from the owners; it was withheld to keep it
from the developer and other defendants in
the lawsuit. This was a perfectly reasonable
decision, and it could have been easily com-
municated to unit owners, but it was not. Be-
cause of this, a group of unit owners actually
started to act against the interests of the as-
sociation with regard to the report, simply be-
cause they did not understand the reason why
the board was withholding it. This resulted in
months of conflict, acrimony and cost.”
“Even fairly minor changes, like altering
the hours of the laundry room, can create
issues for some residents,” adds Axinn. “Any
change in policy should first be fully disclosed
in a memorandum to all the shareholders at
least 30 days before it goes into effect.”
The Perils of Oversharing
Of course, there is a point at which reveal-
ing too much information to residents can be
detrimental (or just overwhelming), and as
such it needs to be withheld for the greater
good. A board must know how to walk this
delicate line.
“In addition to instances where informa-
tion cannot be disclosed because of privilege
or legal prohibition, there are times when spe-
cific information cannot be conveyed,” says
Moriarty. “For instance, if the board were in
the middle of negotiating a landscaping con-
tract, the board could not divulge to the unit
owners its bottom-line contract price because
of the risk that the other party to the nego-
tiation would learn that information, and all
leverage would be lost. Similarly, if the board
were suing the developer for construction de-
fects, the board could not communicate ev-
ery detail of its settlement strategy to the unit
owners for fear that it would undermine its
bargaining position in the case.”
“How much to disclose and when may,
in those instances, be more of an art than a
science,” Moriarty concludes, “but the default
position for the board should be to disclose as
much as it safely can and explain why it can-
not disclose additional information. A board
that explains where it is in negotiations with
BOARD OPTICS...
continued from page 9
man, Shapiro & Lombardi, a law firm with
offices in Massachusetts and Rhode Island,
concurs. “Age requirements are illegal,” he
says. “Don’t get within a half mile of them.”
Doing so is asking for a potential lawsuit,
because age is a protected class under dis-
crimination law.
Sima L. Kirsch, a community law at-
torney in Chicago, takes a slightly different
view of the possibility of introducing age as
a factor in board composition. “With the
changing demographics of our citizenry,”
Kirsch says, “diversity in leadership enables a
greater understanding and ability to plan for
an association’s current and rapidly chang-
ing future needs. Staggering a board by age,
although a unique take on the situation, may
allow much needed collective perspective.
Whether to implement such a rule needs to
be made on a case-by-case basis based on
the operating documents and composition
of the association members and needs.
“Is this rule discriminatory?” Kirsch
continues. “Will it survive court scrutiny? It
may very well. The association is a private
corporation, and the purpose of the rule is
not age-based or based on any other type of
housing restriction, or discrimination cat-
egory. Rather, it is connected to a purpose
of the condominium, which is to protect the
equity and health and safety of the mem-
bers it serves for now and in the future. An
amendment is the most secure method to
adopt such a change. There are no cases on
point as yet, so we can only wait and see.”
Encouraging Diversity
Hakim suggests there are steps that can
be taken to encourage diversity in all direc-
tions. “A corporation or association could
amend its bylaws to require a certain level
of attendance at meetings,” he says. “Failure
to attend would be deemed an automatic
resignation. A younger resident with a busi-
ness lifestyle may elect not to obligate him
or herself, or resign. The converse might be
to amend how meetings are held, allowing
use of Skype, or teleconferencing via smart-
phone. That might encourage those who are
more technologically savvy but not physi-
cally available. You have both sides of the
coin. One side pushes to those with more
time, the other by adding different means
of attendance. That opens doors to younger,
more time-strapped people.”
Another avenue to more diversity, sug-
gests Hakim, is the use of term limits and
staggered seats. “Term limits are a great idea
to force new blood onto a board. Compla-
cency is still a problem, though. You don’t
want vacant seats, which could result if no
new potential members step forward.”
Scott Piekarsky, Managing Member of
the Wyckoff, New Jersey-based firm Piekar-
sky & Associates, concurs. “Some commu-
nities are turning to term limits to promote
diversity and get more board turnover,” he
says. “Older, long-serving board members
tend to want to stay on forever.”
“The best-run associations,” says Lom-
bardi, “are those that are dedicated to in-
creasing the value of the property.” He
doesn’t see any correlation between that
goal and the relative age of board members.
“Every person approaches the job of being a
board member with their own needs, ideas
and wishes. It’s a matter of dedication, not
age.”
At Loggerheads
In many communities, a lopsided age
balance on the board can lead to confronta-
tion. “In diverse communities – particularly
the newer ones – I’ve seen the differences
of opinion that can result from age differ-
ences on a board,” says Piekarsky. “If they
don’t have full facilities, like a playground
or a basketball court for the kids, there can
be vocal, growing families who want these
amenities, but the older residents don’t want
it – and the tug of war begins.” He cites one
community in which the older empty nest-
ers began moving out because the younger
tenants became so vocal, and the resulting
changes made them uncomfortable in the
community.
Interestingly, Piekarsky notes, this age
friction doesn’t limit itself to multi-gener-
ational communities. He says that in some
over-55 communities, the 50-year-olds are
fighting with the 80-year-olds. “The pool is
often at the heart of the problem,” he says.
In that particular setting, “older people
don’t want to deal with young kids. The pool
toys, the potential for the pool to become
contaminated by children in diapers...older
people don’t like it. In many communities in
Florida, they have adults-only swim times.”
He explains further: “Age stipulations in
pools can be a real legal problem though,”
under anti-discrimination laws, “despite
health risks and issues.” And clearly, when
the problem comes before the board for
consideration, a board skewed one way
or the other may find it harder than they
thought to arrive at a fair decision.
Some Cases in Point
Leonard T. Jordan, Jr., is the President
of Concord Village, located in Brooklyn,
New York. This complex of seven 16-story
buildings has 1,023 units. “The property
is very diverse, both by age and other de-
mographics,” says Jordan. The seven build-
ings are governed by one board with seven
members. He says the current board reflects
the age diversity of the property. Two of the
members are between 30 and 40; two be-
tween 40 and 50; one is between 60 and 70;
and two are over 70. “There are also many
subcommittees,” he says. “Almost everyone
BOARD DEMO...
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another party, how it got there, and what its
goals are will then be able to say with some
credibility to the unit owners that certain in-
formation must be withheld, if only so their
position is not compromised. Owners will
get it, and will likely be more appreciative and
more confident in the board as a result.”
n
Mike Odenthal is a writer/reporter with The
South Florida Cooperator.