Our coop did not have its 2020 annual meeting and election of Directors. We were supposed to have voted to fill two seats last year but instead, those Directors continued to serve for an additional year even though all of our Director seats are three-year terms per our Bylaws. Now it is time for our annual election in 2021 and there will be another seat open for election this year. Can we just skip the 2020 annual meeting and election and just run all three seats in 2021 for three-year terms and just skip the 2020 annual meeting since we are already in 2021? Sincerely, Concerned Board Member Dear Concerned Board Member: No. All states require cooperatives to hold their annual meeting on the date set forth in the Articles of Incorporation or Bylaws or as soon as thereafter possible. Some states permit specific time leniency for scheduling but no states simply permit a corporation to “skip” an annual meeting or election. The Members have a right to have their annual meeting and annual election, even if it is tardy. Failure to hold the annual meeting within permitted times or even finding an alternative means for holding the annual meeting could result in a lawsuit against not only the cooperative, but individual Directors as well for failing to fulfill their fiduciary obligations. Knowing that there is a risk to the Cooperative, the Board must look to correct as soon as possible. Understandably, the Cooperative chose to adjourn the meeting because of continuing group meeting restrictions, however, the obligation to exercise due diligence to explore alternatives is a continuing fiduciary obligation of each Board member as well. This could result in not only a court interfering with the Board’s business judgment but could result in a finding that the Board acted in bad faith, neglected its duty, breached its trust and acted contrary to the corporation’s purposes. Your Bylaws indicate that all terms are for three-years however you have incumbents who sat an additional year because their seat was not put up for election due to COVID. The absence of the meeting does not also translate to a reset of the term because essentially what has happened is an appointment was made to the position that would have been vacant but for COVID. Appointments only sit until the next annual meeting and then that seat term will only be for the balance of the remaining term, i.e., two years. The Board at this point can either combine the 2020 annual meeting and election with the 2021 annual meeting and election, or, hold 2020 first and then hold 2021 perhaps later in the summer. Either way, your membership will be voting to fill two seats for a two-year term and one seat for a three-year term. Should the Board wish to explore meeting options, they really need to consult with the cooperative attorney for legal options and to show due diligence in their decision making process. Very truly yours, Co-op Counselor

Our Cooperative maintains its own insurance policy covering the buildings, exteriors and common areas. After some recent requests for replacements and repairs, and instances of units suffering damages, our Board of Directors is concerned with finding ways to trim costs in paying for damages that occur within the dwelling units, while ensuring that adequate insurance policies cover both the exterior buildings and common areas, but also everything within the units. Are there any ways that the Cooperative can save on having to go out of pocket to cover damages that would otherwise be covered in a traditional homeowner’s insurance policy?

Most housing cooperatives, along with other corporations, now must come into compliance with the reporting requirements of the Corporate Transparency Act (CTA). Passed by Congress in 2021, and effective as of January 1, 2024, the CTA is intended to protect national security and identify those who would use shell companies and other organizations to hide or benefit from their ill-gotten gains.

Closed sessions are for the discussion of matters that should not be disclosed to non-directors because of privilege or confidentiality. Closed sessions are an invaluable tool for Boards to conduct business for the Cooperative but only if the tool is used properly. In many states, closed sessions can only be carried out if there is a statutory provision applicable to the reason for the closed session. Such reasons include pending or potential litigation, employee matters, confidential matters involving members or sometimes, matters that are of such a sensitive nature that discussion during the open portion of the session is impractical.

On September 17, 2020, a Michigan Court of Appeals panel unanimously held, in Riverbrook v. Fabode, that trial courts are “… required to consider reliability of methods employed by counselor as expert, as well as her final opinion in letter that tenant required an ESA because of a disability, before determining whether owner of mobile home park had refused to make a reasonable accommodation as required by the FHA.” Riverbrook v Fabode, No. 349065, 2020 WL 5580152 (Mich. Ct. App., Sept. 17, 2020). In Riverbrook, the trial court erroneously rejected the landlord of a mobile home’s evidentiary challenges to the reliability and methods of collection of the tenant’s medical documentation to support ​his reasonable accommodation request for an Emotional Support Animal (“ESA”). Because of the Court of Appeals ruling in Riverbrook, Housing Cooperatives seeking information from members in reasonable accommodation requests for emotional support animals, are now permitted to ask for reliable disability-related information. Although these reasonable accommodation requests should be considered on a “case-by-case” basis, Riverbrook provides additional guidance for what information Cooperatives may seek when considering the request.

Most co-ops offer different types and sizes of units including 1 to 3 bedrooms with various floor plans and square footage combinations. As is often the case, members desire to move from one unit to another. There may be many different reasons for moving such as an increase in family size or a unit with a better view or access to green space or parking. But in some cases members will want to move from their unit to another unit for accessibility purposes or because they have a disability and another unit will better enable them to enjoy the privileges of cooperative living than their current unit.