As you may recall from one of our previous newsletters, a new New York State law was enacted, effective January 1, 2018, which requires cooperative board members involved in interested transactions to provide disclosure of these transactions to the owners in their associations. (Here is a link to the previous newsletter http://lasserlg.com/new-disclosure-requirements-board-members/ )
On April 18, 2018, Governor Cuomo passed an amendment to this new law specifying that the law also covers condominiums. Although the wording of the April 18, 2018 amendment probably should have been more detailed, it seems clear that the intent of the law is to require condominium board members to disclose to the condominium’s unit owns on an annual basis whether any board members have engaged in interested transactions with the condominium. An interested transaction is a contract or business transaction with the condominium association in which a board member has a substantial personal financial interest. (E.g., a board member’s contracting company doing work for the condominium association.) We recommend that condominium board members and property managers consult with legal counsel to ensure compliance with this new law.
(Note: although the BCL and NPCL generally only apply to cooperatives and homeowners’ associations, it would be prudent for boards of unincorporated condominiums to follow the same procedures.) The responsibility for compliance with these new legal requirements falls upon the association. Therefore, as a practical matter, managing agents and board presidents should try to ensure compliance by their associations.
In order to comply with these new legal requirements, at least once each year the association must:
One practical way to comply with these new disclosure requirements would be to distribute the annual report together with the annual meeting notice which is sent to all owners each year prior to the association’s annual meeting.
About the Author Stephen M. Lasser is the managing partner of Lasser Law Group. He has
focused his practice on real estate as both a litigator and a transactional
attorney for approximately 20 years. Read More
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