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Reminder: Time for Most Boards to Provide Their Annual Interested Transaction Disclosures

Under New York State legislation that took effect in 2018, cooperative and condominium boards are required to circulate an annual report to their shareholders or unit owners on the subject of contracts entered into by the board in which a board member has a financial interest. At least once per year, the board must submit a report to the shareholders or unit owners, signed by each board member, containing information on all contracts entered into or approved by the board where there was at least one board member with a financial interest in the transaction. The report must include a list of all such contracts, and for each contract, must identify the names of the other contracting party or parties and the amount, purpose, and term of the contract. The report must also record the dates of all board meetings at which the board voted on such contracts, including who was present and how each board member voted. If the board approved no contracts during the year in which a board member had a financial interest, this fact must be stated.

These reports are required annually, so boards that have not already approved and circulated their report for 2019 must do so during December 2019. Because significant areas of uncertainty continue to exist as to exactly which types of transactions must be reported, boards with questions about their disclosure obligations should consult promptly with their legal counsel.