{"id":4302,"date":"2017-10-01T14:49:27","date_gmt":"2017-10-01T14:49:27","guid":{"rendered":"https:\/\/bpslaw.com\/staging-site\/?p=4302"},"modified":"2022-02-17T14:51:30","modified_gmt":"2022-02-17T14:51:30","slug":"new-york-imposes-new-conflict-of-interest-rules-for-co-op-condo-and-hoa-boards","status":"publish","type":"post","link":"https:\/\/bpslaw.com\/staging-site\/new-york-imposes-new-conflict-of-interest-rules-for-co-op-condo-and-hoa-boards\/","title":{"rendered":"New York Imposes New Conflict of Interest Rules for Co-op\/Condo and HOA Boards"},"content":{"rendered":"

In September 2017, New York State amended the New York Business Corporation Law (\u201cBCL\u201d) and the New York Not-For-Profit Corporation Law (\u201cN-PCL\u201d) to require additional disclosure by \u201cinterested directors\u201d of Cooperatives, Condominiums or Homeowners Associations, i.e. directors who have a direct or indirect interest in a party to a financial transaction approved by the Board.\u00a0 The new law requires the following:<\/p>\n

    \n
  1. Once each year, the Corporation shall provide a copy of BCL Section 713 or N-PCL Section 715, whichever is applicable, to each member of the Board.<\/li>\n
  2. An annual report must be prepared and signed by each member of the Board listing all contracts in which any Director had a financial interest, the purpose of the contract, the amount of the contract, the identity of the recipient of the contract award, the date of the meeting, which Directors were present at the meeting, how each Director voted, the date the contract became valid and the length of the contract.<\/li>\n
  3. If there were no contracts during the year in which a Director had a financial interest, the report must be issued and signed anyway.<\/li>\n
  4. The report must be sent to the shareholders at least annually.<\/li>\n<\/ol>\n

    The law does not apply to any other business or not-for-profit corporations.\u00a0 For reasons no one understands, no similar law was adopted for Condominiums created under Article 9B of the New York Real Property Law (\u201cRPL\u201d), which is the law under which most condominiums are created.<\/p>\n

    There have been strident complaints from real estate housing trade groups that the law was proposed, voted on and signed by the Governor with no hearings and minimal, if any, debate, that the law is poorly drafted and covers transactions in which potential conflicts are fully disclosed and the interested director does not participate in the discussion or vote.\u00a0 Remedial legislation is possible, including making the provisions applicable to Condominiums created under the RPL, but repeal of the disclosure and reporting requirements is not anticipated.<\/p>\n

    The law takes effect January 1, 2018.<\/p>\n

    For more information about this advisory or to discuss related matters, please contact\u00a0<\/span>James W. Glatthaar<\/span><\/a>, a member of the Litigation, Co-Operative and Condominium, Construction and Real Estate Practice Groups by email\u00a0<\/span>jwglatthaar@bpslaw.com<\/a>\u00a0or by telephone: 914-287-6159.<\/p>\n","protected":false},"excerpt":{"rendered":"

    In September 2017, New York State amended the New York Business Corporation Law (\u201cBCL\u201d) and the New York Not-For-Profit Corporation Law (\u201cN-PCL\u201d) to require additional disclosure by \u201cinterested directors\u201d of Cooperatives, Condominiums or Homeowners Associations, i.e. directors who have a direct or indirect interest in a party to a financial transaction approved by the Board.\u00a0 […]<\/p>\n","protected":false},"author":6,"featured_media":3573,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[75],"tags":[],"class_list":["post-4302","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-co-operative-and-condominium-law"],"acf":[],"yoast_head":"\nNew York Imposes New Conflict of Interest Rules for Co-op\/Condo and HOA Boards | Bleakley Platt<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, 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