A board decides the building needs a rule change. Somebody drafts it, the board votes, and it goes into the house rules.
Six months later a shareholder's attorney points out that what the board changed was properly a by-law matter — and the board did not have the power to change it.
That is a recoverable mistake and an avoidable one. It turns entirely on knowing which instrument governs what, and who can amend which.
The statutory position for a co-op
The vast majority of New York cooperatives are organized under the Business Corporation Law, which puts by-law amendment under BCL §601.
The initial by-laws are adopted by the incorporators at the organization meeting. Thereafter — subject to §613 on limitations on the right to vote — by-laws may be adopted, amended or repealed by a majority of the votes cast by the shareholders.
That is the default. Amendment is a shareholder function.
When a board can amend, and why it still is not the last word
A board may amend by-laws only where the certificate of incorporation, or a by-law adopted by the shareholders, so provides — and then by whatever vote is specified there, which may be a higher threshold than the statute otherwise requires.
So the power is derivative. It exists only if it was granted.
And here is the part boards most often miss: any by-law adopted by the board may be amended or repealed by the shareholders entitled to vote.
Even a validly board-adopted by-law remains subordinate. The shareholders can undo it. That asymmetry is deliberate — it is the design of the statute, not a gap in it — and understanding it changes how a board should approach a contested change. A by-law pushed through by a board over shareholder objection is not settled; it is pending.
Confirm your building's position with counsel. Some co-ops are organized under the Cooperative Corporations Law rather than the BCL, which changes the citations.
What by-laws may contain, and the ceiling above them
By-laws may contain any provision relating to the corporation's business, the conduct of its affairs, or the rights and powers of the corporation, its shareholders, directors or officers — provided the provision is not inconsistent with the Business Corporation Law, any other New York statute, or the certificate of incorporation.
That last limit is worth pausing on. A by-law cannot override the certificate of incorporation. Boards drafting amendments occasionally discover a conflict late, after time and legal fees have gone into the drafting, because nobody read the certificate first.
Read the certificate before you draft, not after.
Condominiums work differently
A condominium is not a corporation, so none of the above applies to it directly.
Amendment procedure comes from the declaration and by-laws under Real Property Law Article 9-B. In practice that commonly means a specified percentage of common interest, and amendments to the declaration generally need to be recorded.
Read your own documents, and take the procedure to counsel. This is one of several places where carrying the co-op answer across to a condo produces a confidently wrong result.
By-law or house rule?
This is the distinction that prevents the problem in the first paragraph.
House rules are typically within the board's power to adopt and amend, which is why they are the instrument boards reach for — and the mechanics of doing that well are covered in drafting and enforcing house rules.
By-laws generally are not.
An attempt to achieve through a house rule what properly requires a by-law amendment is on weak ground, and it is the acting-beyond-authority ground that removes the deference a board would otherwise enjoy.
Establish which instrument governs the change you want before anyone drafts anything. It is a single question to counsel and it saves the whole exercise.
Plan the vote, not just the text
Boards underestimate how long an amendment takes, and the reason is usually not drafting. It is quorum.
An amendment generally needs a shareholder vote. A building that struggles to reach quorum at its annual meeting will struggle more for a special purpose — and a failed vote is worse than no attempt, because it puts on record that the proposal was put and not carried.
So the proxy work matters as much as the drafting: solicit early, on a form valid under the by-laws, track returns against the threshold, and know where you stand before the meeting rather than on the night.
A workable sequence
- Define what you actually want to change, in substance.
- Ask counsel which instrument governs it — house rule, by-law, or declaration.
- Read the certificate of incorporation for any conflict or amendment provision.
- Confirm who has the power and at what threshold.
- Draft with counsel.
- Plan the vote and the proxies before scheduling it.
- Record the adoption properly in the minutes.
Skipping step two is how boards end up amending the wrong thing. Skipping step six is how good amendments fail.
Where a managing agent carries this
Knowing which instrument a proposed change belongs in, getting the question to counsel before drafting begins, running the notice and proxy process so a vote actually reaches quorum, and recording adoption properly is part of co-op board management and condo association management.
If your board is about to change something and is not certain it has the power, schedule a consultation or call 718-568-9278 — and ask counsel first.
This article is general information, not legal advice. Amendment authority and procedure depend on your governing documents and on which statute your corporation was formed under. Consult the board's attorney before drafting or adopting an amendment.