First published: Oct 2022
You say toMAHto. I say toMAYto. The bylaws say….
Voter participation matters. When it comes to board elections, an informal practice, no matter how long-standing, or widely accepted, is not controlling authority. At the end of the day, the express language of the governing documents will determine permissible board election procedure. In this case, the common interest among residential unit owners was over 70% and the sponsor’s interest was less than 30%. However, due to the residents’ reliance on past, informal voting procedures, and a lack of participation by all residential unit owners in the formal election, the sponsor’s votes, while not controlling, ultimately became determinative.
Mazumdar v. Bd. of Mgrs. of Strivers Gardens Condo
BACKSTORY Strivers Garden, built in 2005, is a Harlem condominium with two mid-rise towers, 169 residential units, and three sponsor-owned commercial units. Its bylaws prohibit the sponsor from controlling the board or electing a majority of the board members, but permit each unit owner, including the sponsor, to cast one vote for each .0001% of interest in the common elements attributable to their units. The sponsor’s common interest attributable to its commercial units is 27.164%.
The residential unit owners claimed that, prior to 2019, the board observed a long-standing practice of strictly monitoring sponsor votes, and even disqualifying sponsor votes when they were used to elect more than three of the seven board seats. The residential unit owners claimed that there were many years where the sponsor did not participate in the elections at all, and that the residential unit owners typically relied upon an informal primary system to determine board election candidates and winners.
AND THEN In 2019 that all changed. According to the residential unit owners, after the board president and his slate of candidates lost re-election in 2019, they refused to relinquish control of the board, and instead invalidated the election results, holding a second election, where, for the first time, the sponsor’s 27.164% voting interest was cast and counted, causing the president and his slate of candidates to win re-election in perpetuity.
ENOUGH IS ENOUGH After the 2021 board election, seven unit owners took the matter to court on behalf of all residential owners. They commenced an Article 78 action seeking to amend or vacate the board’s election results and to exclude votes cast by the sponsor. They claimed that six out of seven of the elected board members, including the board president, would not have won re-election but for the sponsor’s disproportionate voting interest. They also claimed the election results did not reflect the majority vote of the residential unit owners cast at the election, and thus amounted to a sponsor-controlled board, in violation of the bylaws.
IN THE COURT The residents lost. The court relied upon the express language of the bylaws which clearly defined and permitted the sponsor’s voting rights, but did not specifically define the meaning of “will not elect a majority of the Board of Managers.” The court interpreted the meaning of “will not elect a majority” to indicate that, so long as the sponsor’s common interest was less than 50 percent, the sponsor, by its majority vote, could not elect a majority of the board. The residents have since filed a notice of appeal.
COUNSEL for the unit owners: SMITH BUSS & JACOBS, Emanuela Lupu, Ryan Kaupelis / For condo board and board president: BOYD RICHARDS PARKER COLONNELLI, Bryan Mazzola, Stacia Ury, Nicholas Iannuzzi / For sponsor: GOLENBOCK, EISEMAN, ASSOR, BELL & PESKOE, Michael Devorkin / JUDGE Lynn R. Kotler
