The Limits of Board Powers What You Can – and Can’t – Do

It is not easy being a board member. There are meetings to attend, documents to review, decisions to make and neighbors to mollify. There are also a number of rules and regulations that must be followed in order to ensure that the individual and collective actions of a board meet all legal and ethical requirements. 

Fortunately in New Jersey, there are several laws that serve as guideposts. “The powers are always going to be enumerated in the bylaws,” says attorney A. Christopher Florio of Stark & Stark in Princeton. “What is also helpful here in New Jersey is the Condo Statute that aids us from a statutory standpoint—what additional powers there may be for the condo if they are not set forth in the bylaws.”

And, adds attorney Steve Troup, partner at law firm Tarter Krinsky & Drogin based in New York City, “In both co-ops and condos, [those powers are detailed in] the bylaws and the Business Corporation Law (BCL). In addition, it’s possible that a condo’s declaration of condominium may prescribe certain actions, but typically the declaration defers to the bylaws.” 

The definitions of board members’ roles tend to be “very general in nature,” says attorney Alessandra Stivelman, partner with the firm of Elsinger, Brown, Lewis, Frankel & Chaiet, PA, based in Hollywood, Florida. “For example, it may say ‘treasurer will handle finances,’ but those powers can be expanded as time goes on. There may also be restrictions in the document, such as the president cannot also be the secretary.”

There are few major differences between the rules and regulations that outline the powers of board members in co-ops and condos. There are “no differences between co-ops and condos, just the differences in each entity’s governing documents,” says Troup. “Even though the BCL does not state that it applies to condos, courts have long ‘borrowed’ from the BCL and applied the principles to condo governance in many areas” such as the business judgment rule and proxy issues.  

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Comments

  • Can a Board make a resolution pertaining to the inside of my condo in New Jersey..if the item is not mentioned in the Master Deed or The by-laws.