Community living—the very basis of co-op, condo and HOA life—is based on the idea of trust. In a community of potentially hundreds or thousands of residents, every resident can’t be involved in the making of every decision. Too many cooks can potentially spoil the proverbial broth. No decision would ever get made in a timely manner.
To make those decisions in a timely and efficient manner, communities elect a board of directors to represent them, and vests that board with the responsibility to make decisions that will affect the entire community. Election to the board is an example of representative democracy, not elevation to tyranny.
The Importance of Transparency
“The problem with not being transparent,” says Scott Piekarsky, a managing member at the Wyckoff-based law firm of Piekarsky & Associates, LLC, “is that most people will think something is being hidden – and you don’t have trust, what’s worse? You want to be able to trust your neighbors. If you can’t trust them, that’s not a place you want to live.”
Administrative transparency, says Sima Kirsch, a co-op and condo attorney based in Chicago, “is one of the elemental building blocks that helps create a successful association.” The negative impact of an opaque, inaccessible board, she adds, “is anarchy, infighting, ill will, unbecoming behavior by board members, lawsuits, and sometimes even fear of physical reprisal.”
“It’s important for boards and shareholders to be able to communicate,” says Julie F. Schechter, an associate attorney specializing in co-op representation with Montgomery McCracken Walker & Rhoads LLP, a law firm that has offices in New Jersey, New York, Pennsylvania, and Delaware. Communication enables shareholders “to express whether there are issues or suggestions which they might have, because without hearing from the residents how would board members know what needs to be done?”