Written by 7:31 am Wealth Building Views: [tptn_views]

My Co-op Board President Is a Lawyer Representing Sellers. Is That Allowed?

Q: The chairman of the board of my cooperative is an actual estate lawyer and sometimes represents partners within the sale of apartments within the constructing. He says he quits when buyers for his clients undergo the board approval process, but I do know he doesn’t. When I purchased my unit he represented the sellers and after I went to the board he was there to ask me questions. Is it legal? Are there any laws against this type of behavior?

AND: The president of the management board of a cooperative can legally work as a lawyer for partners selling their premises within the constructing. But simply because something is legal doesn’t suggest it’s idea. Such an arrangement leads no less than to the looks of a conflict of loyalties.

“It’s just a picture of impropriety,” said Julie Schechter, an actual estate attorney and partner on the Armstrong Teasdale law firm in Manhattan. Sellers may decide to hire him as a substitute of one other lawyer because they consider he’ll give buyers a bonus through the board approval process, even when that is not true. “Whether it actually gives you an edge or not, it gives you the impression that it might. And you never want that.

Even if the CEO withdraws from the appliance process, the arrangement stays problematic. A member of the management board has a fiduciary duty towards the cooperative. But as a lawyer, he has obligations to his client. And these two responsibilities may not at all times overlap. Let’s say a salesman remodeled a rest room without informing management or obtaining the right permits, and he tells his lawyer about it. “Now as chairman of the board you’ve gotten an issue because you realize that an illegal alteration has been made to the constructing,” Ms Schechter said. “So where is your loyalty?”

You can write a letter to the board expressing your concerns, but that won’t do much. “It’s like scolding someone for doing something naughty,” Ms Schechter said. “If they do it consciously, they probably won’t respond.”

Another option: Apply for a seat on the board or find an ally within the constructing who will. Spend the months leading as much as the board election rallying support in your cause by arguing that you just are running on an ethical leadership platform. It would require quite a lot of commitment in your part, but it might help change the management culture.

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