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He Said - She Said Disputes Between Residents

What is the Board of a Community Association to do when confronted by complaints made by one resident in the Community (the "Complaining Resident") against another resident in the Community (the "Violating Resident"). Typically, these complaints concern conduct by the Violating Resident which causes a nuisance or disturbance to the Complaining Resident. Most of our clients would prefer not to get involved. After all, these complaints often escalate into a "he said - she said" dispute between the Complaining Resident and the Violating Resident, and the Board is often hesitant to get caught in the middle. Moreover, the Board recognizes that the Residents have their own legal recourse against each other, namely, he or she can seek an injunction against the other Resident enjoining the conduct causing the nuisance or disturbance.

Unfortunately, it is not that easy for the Board to wash its hands of the matter. Most (if not all) Community Association By-laws and Rules and Regulations contain certain restrictions on the use of units within the Community Association. They typically provide that "no nuisance shall be allowed on the Community Association's property nor shall any use or practice be allowed which is a source of annoyance to its residents or occupants or which interferes with the peaceful possession or proper use of the property by its residents or occupants." They also typically provide that "no immoral, improper, offensive or unlawful use shall be made of the property." The Board has a fiduciary obligation to enforce its By-laws and Rules and Regulations. It should not take a blind eye to a complaint made by one Resident against another arising out of conduct which is alleged to be in violation of the By-laws or Rules and Regulations. The situation becomes somewhat complicated where the conduct complained of poses a risk to the health, safety and welfare of the Complaining Resident (the conduct alleged consists of violence or threats of violence or unlawful activity). If the Board fails to get involved, in the event that the Complaining Resident suffers injuries or damage to personal property at the hands of the Violating Resident, the Board may have liability to the Complaining Resident based upon its failure to enforce its By-laws and Rules and Regulations in violation of its fiduciary obligation to do so. As a practical matter, whenever a Complaining Resident has indicated a concern for his or her health, safety and welfare and that of his or her family, the Board should instruct the Complaining Resident to report the incident to the local police.

Under these circumstances, we advise our Community Association clients to conduct a thorough investigation of the complaints. This includes determining whether there were any other complaints lodged against the Violating Resident and interviewing residents who own homes in the vicinity of the home owned by the Violating Resident to determine if they witnessed the conduct complained of. The Board should also determine if any reports were filed with the local police department and, if so, obtain copies of all such reports. After a thorough investigation, the Board should determine, based upon what it has learned, if it should take further action. If the Board determines that it truly is a "he said-she said" dispute between neighbors and that the complaint has not been supported by any independent sources, then it can reasonably decide not to take further action.

However, if the Board determines that it should take further action, we advise our clients to require the Residents to attend a meeting of the Board. The Board can then conduct a hearing at which it can question the Residents and any witnesses. If the Board is overly concerned with the contentiousness of the situation or would feel more comfortable having legal counsel conduct such a proceeding, the Board can have legal counsel present at the meeting who can question the Residents and witnesses and a stenographer who can transcribe the proceedings of the meeting. Following this practice has the added benefit of preserving the record of such proceeding. Once the hearing is concluded, the Board should have enough information to determine what action, if any, it should take against the Violating Resident which may be available under its By-laws and Rules and Regulations. Such actions include, but are not limited to, imposing fines for past and future violations or enjoining such conduct by commencing a court proceeding. In the case of a Cooperative Corporation, the Board may take steps to terminate the Violating Resident's Proprietary Lease.

Importantly, if the Board conducts a thorough investigation and a hearing, it is likely that any action (or inaction) which the Board may decide to take will be protected under the Business Judgment Rule, and the Board will have fulfilled its fiduciary duty owed to the Complaining Resident. The time, effort , cost and expense of doing so will be well worth it.

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