Page 10 - WFL Cooperator Fall 2019

10 THE WESTERN FLORIDA COOPERATOR —FALL 2019 FLCOOPERATOR.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... continued from page 1 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 Western Florida Cooperator.