New York Cooperative housing corporations and incorporated common interest community associations are subject to stipulated requirements and remedies contained in the New York Business Corporation Law or Non-for-Profit Corporation Law and case law applying and interpreting these statutes. New York Condominiums are also governed by the New York Condominium Act, Article 9-B, Real Property Law (the “Condominium Act”).
An annual meeting of shareholders and unit owners (collectively “Owners”) is required by the New York corporation statutes. See CLS Bus Corp Law Sec. 602(b); CLS N-PCL Sec. 603(b). The annual meeting is important to Owners to both elect corporate management and obtain information concerning corporate finances and affairs. However, the rights of Owners with respect to regular and/or special meetings of the board of directors or board of managers (the “Board”) are limited.
In some states the common interest community and corporation statutes require regular and/or special board meetings to be open to all Owners. This does not allow Owners to participate in the discussions or vote, but it does allow them to receive first hand information regarding the operations, finances, management and matters which are of concern to the Board. There is no statutory right in New York granted to Owners to attend board meetings in either the Condominium Act or the applicable corporations’ statutes. The board meetings need not be open unless this requirement is imposed in the Articles of Incorporation or By-laws. Unless otherwise restricted, any action required or permitted to be taken by the Board or any committee thereof may be taken without a meeting if all members of the Board or the committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the members of the Board or committee shall be filed with the minutes of the proceedings of the Board or committee. See CLS Bus Corp Law Sec. 708(b).
There are certain decisions that require Owner approval such as amendments to the governing documents, election or appointment of officers and removal of a member of the Board for cause. However, the Board is authorized to make day-to-day management decisions that are binding on the corporation without the need to ratify said decisions at an open meeting or without approval from the membership. Such day-to-day management decisions include, but are not limited to, hiring employees, including management companies, bringing litigation on behalf of the corporation, making expenditures for repairs or improvements of common elements, establishing house rules, and fixing monthly maintenance fees as well as special assessments. The Owners have a right to inspect the minutes of the meetings and can therefore obtain information regarding Board’s decisions from a review of same.