Most co-op and condo governing documents underscore that self-dealing by board members is prohibited. However, there are some important practices to employ to further prevent any claims of a breach of fiduciary duty, Brick Underground reports.
Annual disclosures about conflicts of interest are legally required under state law. This means the board must prepare a report each year, to be shared with unit-owners or shareholders, disclosing the contracts or transactions in which any board member had an interest. This report will generally be signed by every director and will include the names, addresses amounts and reasons for contracts with vendors or service providers.
“It can be provided to residents each year when the annual financial report is issued,” says Lauren Tobin, an associate at the law firm Woods Lonergan.
About the Author
James Woods, Managing Partner of Woods Lonergan, holds more than 25 years of experience in corporate, real estate, and business legal matters. His expertise in handling negotiations, litigation, jury trials, and all forms of alternative dispute resolution spans multiple areas, including corporate, real estate, and commercial litigation. James actively represents dozens of Cooperative and Condominium Boards and serves as counsel to many Corporate Boards. Prior to founding the firm, James proudly served as an Assistant District Attorney for Nassau County and handled both jury and bench trials. With experience that also covers sophisticated transactions and complex acquisitions, James also serves as counsel to several domestic companies in a range of industries and commercial arenas, including real estate, insurance, banking, transportation, and construction. If you have any questions about this article you can contact attorney James Woods through his biography page.
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