Non-Resident Board Members – How Do They Affect Operations?

October 26, 2017

The Cooperator
By A.J. Sidransky

For many reasons, common-interest communities such as co-ops, condominiums, and HOAs prefer that the people living in the community’s units be the actual owners of those units – rather than renters, or subtenants, or relatives of the owners. The conventional wisdom here is that owner-occupants have a more deeply vested interest in the overall health and smooth operation of their community than non-resident owners, because it’s their actual property – not some faceless landlord’s. Same goes for board members – it seems pretty obvious that someone serving on their building or association board will be more effective and engaged if they actually live in the building or association, and not several states away.


Board of Directors: Who May Serve?

According to Phyllis Weisberg, an attorney with Montgomery McCracken Walker & Rhoads, which has locations in New York, Pennsylvania, New Jersey and Delaware, at the state level in New York and elsewhere, “There is no residence requirement to serve on the board of a co-op or condo.” Rather, “One must look at the bylaws.” Weisberg also points out that for co-ops in New York, which are subject to the BCL—the Business Corporation Law—there is no residency requirement unless provided for in the community’s bylaws.


Weisberg also points out that the logistical issues that might have made it difficult or impossible for a non-resident owner or shareholder to participate meaningfully in board activities and administration are no longer really much of a problem, thanks to video and telecommunications capabilities like Skype and FaceTime that allow board members to actively participate in meetings and other board functions from pretty much anywhere in the world. “People don’t need to be close enough to attend meetings,” she says. “They can participate by speakerphone,” or other technologies. “Some boards today meet entirely by conference call.”


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