Everybody sometimes disagrees with the decisions of their condo or co-op board.  Maybe the choice to rearrange the garbage receptacles out front seems  ridiculous, or the ongoing clattering of machinery on the roof is driving the  top-floor residents nuts, and the board seems determined to let it fix itself.  These are the kinds of inevitable complaints that every board has to deal with  sooner or later, and most manage to handle such issues with prudence and  aplomb.  

 But what if the board does things that seem to be beyond the pale—perhaps even illegal? Where do boards’ powers end? The board is the governing body of the association, and there are  certain boundaries and limitations that they should operate within.  

 The Law Says...

 How are boards' powers spelled out? How do boards know what they can and can't  do under law? 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.”  

 “With all of these associations, co-operatives included, the boards are  essentially running a business. They are established most of the time as some  sort of corporation. Mostly here in New Jersey, non-profit is what we run into  with them,” explains attorney Judith A. Fallat of Denville.  

 The legal term known as the Business Judgment Rule provides boards with some  legal protection. Essentially, courts won't second-guess a decision made by a  board of directors, so long as it's authorized to act for the condo or co-op,  and the decision was made in good faith with the best interests of the  corporation in mind.  

 Co-ops vs. Condos

 Co-op boards have more powers in certain areas than they do in condos and HOAs. “That is a function of the actual ownership of a co-operative. The cooperative  owns the property and the individual owners own shares in the corporation.  Typically, you see more powers in areas relating to buying and selling these  units. Boards get to approve buyers, usually they're looking at financial  information because the way these shares are held, there is an underlying  mortgage that the whole co-op is responsible for so the financial viability of  the potential purchaser is of special concern to co-op boards, ” says Fallat. In addition to the right to purchase, the co-op boards also have  the ability to approve sublets, she adds.  

 Co-op boards generally do not have restrictions on how much they can spend for  alterations, improvements and repairs. Condo boards do have limits in the  bylaws. For instance, they cannot spend more than $100,000 in a given year, or  more than $5,000 on a given project without resident approval.  

 Safety & Security

 Security is a top priority for co-ops and condos. Many choose to install  security cameras, have doormen or guards, or require guests to sign in with a  staff person in the lobby or entry area before being allowed into the building.  Because these measures are meant to protect residents and the property,  generally speaking, the board has the right to such decisions. “The board is responsible for the security of the property so they can make  decisions as needed,” says attorney Dean Roberts of the firm Norris McLaughlin & Marcus PA with offices in New Jersey and New York. “Residents do not have an expectation of privacy in common areas, hallways,  lobbies, or laundry rooms, so any security measure installed there is usually  reasonable.” Roberts continues to say that security only can become a problem if say, a  camera is pointed at the interior of a particular unit or targets individual  owners or shareholders.  

 Fallat adds, “In terms of condos in New Jersey, the Condominium Act here very broadly requires  the association to exercise its powers and discharge its functions in a manner  that protects the health, safety and general welfare of the community. All the  board's actions arise out of that backdrop. The same is true of, really, any  community association established in New Jersey.” This gives the board very broad powers regarding the protection of the  association.  

 In general, larger buildings may have more security because they can be more  susceptible to breaches. For example, a large high-rise would have more stringent measures such as a 24/7  door person, and even electronic controls on all doors leading into the core of the building  that require an electronic key card. Many high-rises also have security cameras  at all building entrances and exits, and procedures that require residents to  come to the lobby to accept deliveries of food and similar items. Some  buildings even require telephonic resident authorization before a visitor is  allowed to pass through the door leading to the core of the building. Whereas,  a smaller community would just have locks or maybe a buzzer system.  

 Florio adds that in certain situations the installation of security measures may  require a vote, depending on what the infrastructure is going to cost. “You always have to be concerned about what is referred to as a capital  improvement. If the capital improvement has a dollar-amount sign that you  cannot go over, if it's a new capital item that is going to have to be budgeted  for and reserved for, then you are going to need membership approval.”  

 Access to Units

 Situations may arise in which the management or service provider may need access  to a resident's unit to fix a leak or check on a electrical problem. In what  situations does the owner have right to privacy and when can their unit be  accessed?  

 “The least intrusive method that can be used to achieve the goal is best,” says Fallat. “So if a board is doing inspections to ensure compliance with rules and  regulations, it should be done during reasonable times with sufficient notice.” Boards should give residents enough notice to afford them the opportunity to be  home, or to leave the key with someone else, she says.  

 Roberts adds that boards are required to give “reasonable” notice before entering a unit. The by-laws usually specify what the exact time  frame is. If the situation is an emergency, affects other units or common  elements, the board has the power to enter immediately.  

 Releasing Information

 The co-op or condo board has on hand many resident records such as personal  information, financial statements, delinquencies, complaints, comments, just to  name a few. While certain members of the board and management are able to view  this information, not all third parties have access to it.  

 “In New Jersey, if you look at Title XV, there is certain language there that  allows certain information to be given out. A lot of folks will use that to say  'we want to know the names of everyone that owes money, their unit number and  how much they owe.' That is the one request that comes up a lot for me,” says Florio. “There are different interpretations and I don't expressly think that they are  entitled to it, but if there is anything that is going to potentially put our  client at risk from a member, even if it is factually true what we are going to  give out, I'm going to tell my client that they will not disclose that  information. I'm not going to give out any information about what people owe.  I'm not necessarily going to give out information about mediation that took  place unless the parties agree. If it is a reasonable request, I'm going to try  to get that information to them that is both securing the privacy of the  individual and addresses in a reasonable manner.”  

 Board members should use caution when discussing information, actions and  decisions relating to the building or other members during executive session.  Roberts describes board executive meeting discussions with the saying, “what happens in Vegas, stays in Vegas.” “Board members need to realize that they will be learning a lot of personal  information, which they cannot disclose or talk about amongst themselves once  they exit the meeting. You don't know how many times I've had board members  talking about a particular person they have just discussed at a meeting and it  turns out that the person is right there in the elevator with them. Boards need  to exercise confidentiality.”  

 Condo and co-op boards are put into place to make sure the association runs  smoothly. While board members have the power to make decisions regarding many  association operations, they have to make sure not overstep their boundaries  and intrude on the privacy or security of residents.   

 Maggie Puniewska is a freelance writer and frequent contributor to the New  Jersey Cooperator.