While Condominium Boards can take some solace in the fact that New York has given them the liberty to enforce the terms of the Associations’ Governing Documents, New York City’s locals laws require a Board to be more aggressive in enforcing the Association’s policies. Two types of laws essentially give an individual tenant, renter or cooperative shareholder the right to keep a pet, even if there is a "no pet" provision in the lease, Declaration, rules, and regulations.

In New York City (Administrative Code of the City of New York Section 27-2009.1) and Westchester County (Laws of Westchester County Section 694), statutes commonly known as the "Pet Law,” give tenants in cooperatives and most condominiums, as well as other types of dwellings, the right to keep a pet, even if there is an applicable "no pet" clause in the Association’s rules and regulations and Governing Documents. The same applies for restrictions to certain types of pets or certain breeds.

Under the "Pet Law", if a landlord or Association fails to enforce the provisions of their restrictive provisions within three months of its knowledge of a Unit Owner’s open and notorious harboring of a pet, then the restrictive provision is deemed null and void. The Association may no longer enforce that particular provision.

Condominium Boards must also be sure to balance their restrictive provisions with applicable federal and state laws against discrimination. Just as a landlord must accommodate a disabled tenant or Unit Owner who requires a wheelchair, a companion animal must similarly be permitted, even if it goes against the Association’s pet policy. The federal Fair Housing Act and the New York City Civil Rights Law require that a housing provider give a "reasonable accommodation" to a disabled individual to use and enjoy his or her home by keeping a medically necessary companion animal. Failure to provide this “reasonable accommodation” in the form of a companion animal could expose the Association to severe penalties including the assessment of fines, compensatory and punitive damages in state or federal court, as well as fines which may be levied by such New York State regulatory agencies.

In sum, a Cooperative or Condominium Board in New York State is free to adopt a pet policy as they see fit, even those restricting and prohibiting certain dog breeds. However, when it comes to New York City and Westchester, Associations must be sure to comply with the “Pet Law” which requires the Association to take action within three months of discovering a Unit Owner has a pet/dog in violation of the Association’s rules. Failure to take action renders that policy void. Furthermore, Associations must always be sure to comply with all Federal and State anti-discrimination laws. Where a companion pet is needed to treat a disability, an Association’s denial of that companion pet could lead to severe consequences.

If you would like to discuss this client alert in more detail or how it may affect your community association, please contact Zain Naqvi at 609-895-7288 or by email at znaqvi@stark-stark.com

Mr. Byrne focused his presentation on relevant ethics-related definitions, guidelines, laws and authorities.  He also discussed various trade organization and other relevant ethical guidelines and standards.  Mr. Byrne was joined in the presentation by Irwin Cohen, A. Michael Tyler Realty Corp., Peter Von Simon, New Beford Management, and Stephen Beer, CPA, Czarnoski & Beer.

 

The presentation was held in New York City, Tuesday, April 12, 2011. Mr. Byrne focused his presentation on how condominiums and cooperatives can avoid and/or resolve conflicts through alternative dispute resolution, as well as be spared the acrimony of litigation. He discussed mediation, arbitration and ADR.

You can listen to the full presentation online here. 

In In re Brown, Bankruptcy Judge Donald Steckroth held that a debtor remained liable for post-petition association assessments in a Chapter 7 proceeding. This liability remained, even after the unit was abandoned by the Trustee and the debtor did not live at the unit, so long as the debtor held legal title. 
 

The matter was brought before the Court on the debtor’s motion to compel the Association to release monies levied in a bank account, post-petition, after the bankruptcy case was closed. As background, the Association had received a state court judgment for only post-petition amounts, and subsequently levied on the debtor’s bank account. Prior to filing the motion, the debtor requested the bankruptcy case be reopened so that she could list the Association as a creditor, since she had failed to provide initial notice to the Association. After the bankruptcy case was reopened, the debtor then filed the motion against the Association, claiming that the subsequent levy was improper.

2005 Amendments to the Bankruptcy Code
After extensive oral argument, the Court found that the 2005 Amendments to the Bankruptcy Code clearly widened the scope of non-dischargeability under § 523(a)(16). The statute provides that a chapter 7 discharge:                       

“...does not discharge an individual debtor from any debt...for a fee or assessment that becomes due and payable after the order for relief to a membership association with respect to the debtor's interest in a unit that has condominium ownership...for as long as the debtor or the trustee has a legal, equitable, or possessory ownership interest in such unit, such corporation, or such lot...” (Emph. added).

As such, the Court ruled that the debtor remained liable for post-petition assessments.

Know Your Collection Rights in a Bankruptcy Case
Unit owners often feel that once they file a chapter 7 bankruptcy case and vacate the unit that they are free from the duty to pay their assessments to the Association. This decision validates and supports an Association’s efforts to ensure owner payment of these assessments.

Associations should not “give up” when bankruptcy is filed. When an Association knows its rights, and has counsel experienced in representing Associations vis-à-vis bankrupt owners, it can successfully navigate an owner’s bankruptcy and recover unpaid assessments.

Per the rule, community associations could use revenue raised by new transfer fees for very narrow purposes, and would be regulated in how those with new transfer fees manage non-resident use of common property or elements. The rule has not yet been finalized or put in place, such that the public can still comment on it. This proposed rule, to the extent that it restricts how funds from new transfer fees can be used, does not likely adhere to established property law. Generally speaking, community associations have the right to raise revenue and use this revenue the way their owners and leadership determine. Until April 11, 2011, citizens are permitted to submit comments to the Federal Housing Finance Agency as follows:

- E-mail: Use the address, regcomments@fhfa.gov, and include the following in the subject line of the e-mail: FHFA Proposed Rule on Certain Private Transfer Fee Covenants, (RIN) 2590-AA41
- U.S. Mail: Use the following address to send comments by U.S. Mail:
     Mr. Alfred Pollard
     General Counsel
     Federal Housing Finance Agency
     1700 G Street, NW
     Washington DC 20552
     ATTN: Public Comments: FHFA Proposed Rule on Certain Private Transfer Fee Covenants, (RIN) 2590-AA41
- Federal E-Rulemaking Portal: Go to www.regulations.gov and follow the instructions provided to submit your comments electronically.

The related federal regulations can be found at 16 C.F.R. Sec. 681.  This "Red Flag" rule applies to "Financial Institutions" and "Creditors" (defined as "Covered Entities").  A "creditor" is one that "regularly and ordinarily in the course of business (as relevant to community associations and those who manage them) advances funds on behalf of a person, based on the obligation to repay (does not include a creditor that advances funds on behalf of a person for expenses incidental to a service provided by the creditor to the person.  A "creditor" also includes any other type of creditor as the agency (FTC) may determine appropriate based on a determination that such creditor offers or maintains accounts that are subject to a reasonably foreseeable risk of identity theft.  It is likely that the FTC would consider a community association, and a community association management company, to be a "creditor" for the purpose of the Red Flag rule. 
 

A creditor must develop a written program intended to prevent or mitigate identity theft.  This program must identify the red flags related to the accounts and/or information the creditor maintains.  It must detect the red flags within the program, respond appropriately to any red flags identified and/or detected and ensure the program is updated periodically to reflect changes in risks to customers, members and to protect them from identity theft.  "Red Flags" include:  (1) alerts, notifications and credit reporting agency warnings; (2) suspicious documents; (3) suspicious personal identifying information; (4) suspicious account activity; and (5) notice from other sources (i.e., law enforcement).  Management companies and their community association clients must consider the need for a "Red Flag" privacy officer.  They must review and analyze their dishonesty, errors & omissions, directors and officers and liability policies in relation to this.  Management companies should consider how their existing boilerplate contracts protect them, if at all.  Management companies should also ensure that their compliance with this - and their warnings/directions to boards - are documented. 

The November 14, 2010, presentation was part of the Council of New York Cooperatives & Condominiums' 30th Annual Housing Conference. The Council of New York Cooperatives & Condominiums (CNYC) was founded in 1975, and is a membership organization dedicated to the interests of housing cooperatives and condominiums.

You can listen to the full presentation online here. 

The September 8, 2010, presentation was part of the ASSOCIA Management "Snack & Learn" manager information and training program, made available to all of ASSOCIA's member companies via video feed. 

You can listen to the full presentation online here. 

The presentation was part of the ASSOCIA/RIVER Management "Boot Camp for Board Members" Program, held in Poughkeepsie, New York on June 7, 2010.  Mr. Byrne discussed reserve budgets and funds, and a community association's fiduciary duty in relation to reserves.  He also spoke to the attendees about the power of community associations to borrow money, the process involved with that and commitment and third-party opinion letters. 

You can listen to the full presentation online here. (13 MB)

Who must post sign.  Anyone who has one or more employees.
Content.  The content of the notice is prescribed by the Wage and Hour Division of the Department of Labor (DOL).  The sign exhibits the current federal minium wage and explains wh is eligible for it.  The sign must also include language explaining federal child labor laws and the overtime provisions of the federal Fair Labor Standards Act.  Under the act, employers are required to pay covered nonexempt employees a minimum wage of not less than $7.25 per hour.  This rate became effective July 24, 2009.
Location.  You must post the sign in a conspicuous place where employees are likely to see it.
How to get sign.  For a copy, contact the DOL at (866) 487-9243 or to go www.dol.govlelawslposters.htm.
Most recent version.  The latest version of this sign was issued in July, 2007.

EQUAL EMPLOYMENT OPPORTUNITY SIGN

Who must post sign.  Anyone with 15 or more employees.
Content.  The sign explains the various federal anti-discrimination employment laws, including the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and the Equal Pay Act.
Location.  You must post the sign in a conspicuous place where notices for employees and job applicants are generally posted.
Penalty.  The Equal Employment Opportunity Commission (EEOC) can fine you up to $100 per violation for not properly posting the sign.
How to get sign.  For a copy, contact the DOL at the above telephone number.
Most recent version.  The latest version of this sign was issued in August, 2008.

JOB SAFETY AND HEALTH PROTECTION SIGN

Who must post sign.  Anyone with one or more employees.
Content.  The sign explains that employers must provide their employees with a safe work environment, free from recognized hazards, and they must comply with Occupational Safety and health Administration (OSHA) regulations.
Location.  You must post the sign in a conspicuous place where notices for employees are generally posted.
Penalty.  The law sets no fine for not posting the sign.
How to get sign.  For a copy, visit the OSHA website, or call the local OSHA office - (800) 321-6742.
Most recent version.  The latest version of the sign says “OSHA 3165-12-06R” in the lower right-hand corner.

EMPLOYEE POLYGRAPH PROTECTION ACT SIGN

Who must post sign.  Anyone with one or more employees.
Content.  The sign explains that under most circumstances employers cannot require their employees to take a lie detector test.  In rare and controlled circumstances, the act permits polygraph testing of certain employees who are reasonably suspected of involvement in a workplace incident such as theft or embezzlement that resulted in specific economic loss or injury to the employer.  In these instances, the lie detector tests are subject to strict standards for the conduct of the test, including the pretest, testing, and post-testing phases.  An examiner must be licensed and bonded or have professional liability coverage.  And the act strictly limits the disclosure of information obtained during a polygraph test.
Location.  You must post the sign in a conspicuous place where employees are likely to see it.
Penalty.  The Secretary of Labor can bring court action to restrain violators and assess civil money penalties up to $10,000 per violation, including failure to post the sign.
How to get sign.  A copy of the sign can be obtained from the DOL.
Most recent version.  The sign was last updated in June, 2003; “WH Publication 1462" appears in the lower right-hand corner.

FAMILY AND MEDICAL LEAVE ACT SIGN

Who must post sign.  Anyone with 50 or more employees.
Content.  The sign must explain that covered employers are required to provide up to 12 weeks of unpaid, job-protected leave to certain employees for certain family and medical reasons.
Location.  You must post the sign in a conspicuous place where notices for employees and job applicants are generally posted.
Penalty.  The Wage and Hour Division of the DOL can fine you up to $100 per violation for not posting the sign.
How to get sign.  A copy of the sign can be obtained from the DOL.
Most recent version.  The latest version was revised in January, 2009; “WHD Publication 1420" appears in the bottom right-hand corner.  This latest version incorporates a rule that became effective on January 16, 2009.  The rule provides for special military family leave for employees to care for a related service member or employees who need to manage their affairs while the family member is on active duty in support of a contingency operation.

UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT SIGN

Who must post sign.  Employers of service members returning from a period of uniformed service, including those called up by the reserves or National Guard.
Content.  The sign explains the reemployment rights of individuals who voluntarily or involuntarily leave employment positions to undertake military service or certain types of service in the National Disaster Medical System.
Location.  You must provide the notice by posting it where employee notices are typically placed.
Penalty.  There are no citations or penalties for failure to post the sign.  However, an individual could ask the DOL to investigate and seek compliance, or file a private enforcement action to require you to provide the notice to employees.
How to get sign.  View online here, or call the DOL at (866) 487-2365.
Most recent version.  The latest version was published in October, 2008.

The outcome of this association's suit reminds us of an association's need to consider federal law when dealing with issues that have been regulated by the federal government, such as telecommunications, fair housing, bankruptcy and mortgages.  Further, the outcome  is also further evidence of the questionable value of agreements made with municipalities to protect community values, in lieu of direct action by those communities themselves. 

Some of the proposed regulations are as follows:

1. Projects consisting of three (3) or fewer units will no more than one (1) unit encumbered with FHA insurance.  Projects consisting of four (4) or more units will have no more than 30% of the total units encumbered with FHA insurance.
2. The new regulations require that at least 50% of the total units must be sold prior to endorsement of any mortgage in the project.
3. Transfer of control of the association shall pass to the owners of units no later than:  (i) 120 days after the due date 75% of the units are conveyed to unit purchasers; or (ii) one (1) year after completion of the project evidenced by the first conveyance to a unit purchaser.
4. A final certificate of occupancy is required as a precondition to project approval.  Temporary certificates of occupancy are not permitted.
5. No more than 25% of the property's total floor area in a project can be used for commercial purposes.
6. No more than 15% of the total units can be in arrears (more than 30 days past due) of their assessments.
7. A current reserve study must be no more than 12 months old.
8. Existing condominium project approvals will expire two (2) years from the date placed on the list of approved condominiums.

These lending guidelines were to be effective October 1, 2009.  The effective date has been twice postponed however.  The current effective date is December 7, 2009.

For justification, the proposed law's drafters provide that in the "past, unscrupulous or untrained property managers have bilked cooperative shareholders of millions of dollars in elaborate schemes of fraud."  Other justifications are provided as well.  Stark & Stark's Condominium & Cooperative Group will continue to track this proposed law, as well as all of those that affect New York's condominiums and cooperatives.