By Beth M. Gazes, Esq. & David L. Berkey, Esq.

With summer just around the corner, Boards of Cooperatives in New York City should consider adopting a Summer Recess Period pursuant to the Cooperative Application Timeline Law now, and should consider doing so well in advance of the summer months to ensure that prospective applicants are aware of the policy prior to making submissions. 

Under the new Law, Boards must adhere to strict timelines when presented with a purchase application.

The Law provides a small number of extensions, including a Summer Recess Period, but only if the Board formally adopts such a policy.

Since lawsuits by purchasers and sellers are typically grounded in claims of discrimination and breach of fiduciary duty, Boards should be diligent in ensuring that their Summer Recess Period is properly adopted at a meeting and memorialized by a writing that can sufficiently withstand judicial scrutiny.

While a seemingly mundane task, some Boards may want to plan now, especially if they do not hold regular meetings. Liability can turn on whether the Board's action was authorized, warranting special attention to ensure that the resolution was properly adopted.

A properly adopted Summer Recess policy must be approved at a board meeting and documented in writing to withstand potential legal scrutiny. A sample resolution is provided here. This is particularly important given that disputes from purchasers and sellers often involve claims of discrimination or breach of fiduciary duty. In such cases, liability may hinge on whether the board's actions were properly authorized. 

Click here to read more about the NYC Co-Op Application Timeline Law.

Since lawsuits by purchasers and sellers are typically grounded in claims of discrimination and breach of fiduciary duty, Boards should be diligent in ensuring that their Summer Recess Period is properly adopted at a meeting and memorialized by a writing that can sufficiently withstand judicial scrutiny. A sample resolution is provided here.

If you have questions about your Board's methods of governance, or whether your notice of Summer Recess is sufficient, please feel free to reach out to Beth at bmg@gdblaw.com or 212-935-3131.