The New York City Council had a very ambitious legislative agenda in 2017, and the New York State Legislature weighed in as well. This column highlights several important laws enacted in 2017 which impact co-ops and/or condominiums, and the steps that boards and managers should take in order to comply with the same.

Disclosing Potential Conflicts of Interest

Effective Jan. 1, 2018, the Business Corporation Law (BCL) was amended to add a new section requiring all co-ops to provide annual reports to their shareholders/apartment owners disclosing any contracts made by the board on behalf of the building in which one or more board members are “Interested.” Generally, a board member is “Interested” when he or she is a party to (or is a director or officer of an entity that is a party to) or has a “substantial financial interest” in the contract. See BCL §713; see also Talel, “Conflicts of Interest—A Broker on the Board,” N.Y.L.J. (July 5, 2017, pg. 3, col. 1). The required report must: describe the contract; identify the party with which/whom it was made; state the amount and purpose of the contract; disclose the record of board meetings regarding the contract, and how each director voted regarding entering into the same; and state the date until which such contract “would be and remain valid.”