You may have read the recent article in CAI’s Common Ground magazine entitled “Man in the Middle” about community association ombudsmen in Nevada, Florida, Virginia and Colorado.[i]
An ombudsman is defined as “a public official appointed to investigate citizens’ complaints against local or national government agencies that may be infringing on the rights of individuals.”[ii] In the community association context, an ombudsman is frequently called on to help resolve disputes between irate homeowners and community Boards of Directors/Managers. The Common Ground article depicted the mixed reviews that the ombudsman office has received in these four states.
What you may not know, however, is that there is legislation currently pending in the New York State Legislature that would create an ombudsman for community associations right here at home.
Identical bills in the Assembly (A00034) and Senate (S03152) propose the creation of a “cooperative and condominium ombudsman” and, while the proposed bill has been around since 2010 and has not been passed yet in either House, it is worth a look to see what may be in store for us on Long Island if the bill gains support and becomes law.
First of all, the bill repeatedly refers to “cooperatives and condominiums” – indeed the law is to be known as the “Cooperative and Condominium Ombudsman Act” – conspicuously omitting homeowners associations from the mix. Curiously, the proposed bill defines “condominium” as a condominium or a homeowners association. The bill was originally proposed by State Senator Liz Krueger of Manhattan, where almost every building is either a co-op or condominium, which may explain why homeowners associations are neglected, ill-defined and misunderstood by the bill. If the bill is to become law, it should be altered to properly recognize the homeowners association as a common form of community association throughout most of the state, if not in Manhattan.
The bill purports to have the ombudsman serve both individual unit owners and Board members by providing a “neutral, informative and accessible resource available to all parties.” Some of the outreach functions of the office would be to “educate and inform” community residents and Board members of their rights and responsibilities, prepare and publish educational and reference materials about community associations, and conduct meetings, workshops, conferences, etc. to disseminate information about community association living.
However, the ombudsman office is unlikely, in reality, to serve unit owners and Boards equally. Board members already have substantial resources at their disposal, should they choose to take advantage of them. Most Boards have the benefit of professional management, attorneys, accountants, and other professionals whom they can turn to for information and advice. Long Island community association Boards have CAI – both the national office and local chapter – as additional educational resources, and communities in up-state New York can take advantage of the Mid-Hudson and Western New York CAI chapters. New York City community association Boards have long been served by similar organizations, notably the Council of New York Cooperatives and Condominiums and the Federation of New York Housing Cooperatives and Condominiums, and a new CAI chapter in New York City is now in its formative stages.
It would seem, therefore, that community association Boards will not benefit greatly from the resources that an ombudsman might offer.
On the other hand, the office of an ombudsman could be a boon to unit owners who feel wronged by their community Board. These individuals often do not have the financial or information resources to do battle with a community Board and the ombudsman’s office might be well-suited to balance the playing field somewhat. The proposed bill directs that the ombudsman provide mediation, arbitration and other forms of alternative dispute resolution to unit owners, sponsors, Boards and even prospective owners (presumably whose purchase applications were denied by a co-op Board) and provides the ombudsman with the power to subpoena witnesses and documents.
Providing assistance to the unit owner who feels oppressed by his/her Board is not necessarily a bad thing.
We have all heard stories, and maybe even were participants once or twice in such a story, of a Board going overboard in its treatment of a unit owner who may have inadvertently violated a rule or regulation. We have also all heard, and probably lived through, numerous other instances of unit owners who seemingly go out of their way to challenge Boards at every opportunity.
Would an ombudsman office serve to encourage these chronic complainers by offering a sympathetic ear, quasi-legal advice or by compelling Board members to appear at an arbitration hearing, all at no cost to the complainer? Or will an ombudsman serve to deflate antagonistic unit owners by informing them that their complaints are baseless?
The proposed bill also indicates that the ombudsman will help resolve disputes between individual residents.
This is one area where community association Boards are often reluctant to get involved and are also ill-equipped to handle. Having an ombudsman to refer inter-resident disputes to could be a benefit to the warring parties while allowing Boards to avoid the fray.
The question must inevitably arise as to how our budget-strapped State government would find the funds to pay for the ombudsman and his/her staff as they criss-cross the state in solving the myriad of problems that may arise. Look in the mirror for the answer, although this may be one of the least objectionable parts of the bill. The office is to be funded by a $6.00 per unit annual fee, which seems not too onerous – certainly not for the multi-million dollar co-op and condominium apartments on Manhattan’s Fifth Avenue and Central Park West – but also not even for the more modest dwellings on Long Island and up-state. There are apparently enough condominium, co-op and HOA units throughout New York State that such an assessment could raise between four and seven million dollars annually for the ombudsman’s office.[iii] Presumably, his/her staff will be able to travel the State in style.
One last power of the ombudsman deserves mention by virtue of its incongruity. While most provisions in the bill deal with the generalized issues of information dissemination and conflict resolution, the bill specifically empowers the ombudsman to attend and conduct Board elections if 15% of the voters in the community petition the office. And all costs to have the ombudsman monitor the election are to be paid by the community. How anyone arrived at the threshold of 15% is a mystery, but it appears to be a blatant manifestation of what is only an underlying current in the balance of the bill – a bias toward supporting and advocating for minority interests within a community. Where else can 15% of the votes in any community dictate procedures and incur costs?
While the bill purports to create a resource for all in the condominium/co-op/HOA community, it may most prominently provide disgruntled unit owners with a forum to voice, and gain support for, their gripes.
While dissatisfied owners often deserve to have their voices heard and their arguments considered in good faith, the proposed ombudsman bill appears to provide too much authority to the office, with the potential to cause unnecessary expense and inconvenience for community Boards and Board members.
An ombudsman with the mission of disseminating information, offering mediation upon consent of the parties, and election supervision when requested by the Board or a majority of the voters would be an effective method of promoting fairness in community association governance. Mandatory arbitration, subpoena power and a 15% threshold for the ombudsman to conduct elections are all provisions that will cause substantial disruption and animosity within the community without any concomitant benefits. Properly amended, the proposed bill could become a useful resource for community association residents and Boards.
[i] Common Ground, Volume XXX, Number 1, January/February 2014, p. 18.
[ii] Webster’s New World Dictionary of the American Language
[iii] Memorandum in Opposition, Real Property Law Section, NYS Bar Association, May 5, 2011
