Sheila Terrace, 37-30 73rd St.
Jackson Heights, Queens
The first real sign of trouble came in March of 2009. My wife and I were relatively new to the co-op and we found ourselves in the middle of an election. There were two different factions running for the board of our 86-unit Queens building. The vice president, who represented the majority of the board, asked me to sign a proxy for the annual election. He also advised me not to give a proxy to his opponent. I kindly told him (and all others who approached me for the same reason) that he would not need my proxy because I would attend the annual shareholders’ meeting to vote for myself.
At the annual meeting, there was a lot of discussion about the latest financial statement not being ready and a missing $90,000 check from the co-op’s operating account written to the management company. Despite the apparent mismangement and the missing money, the election results seemed to show the vice president had a lot of clout. His slate of candidates easily won, and as one of the two independent observers of the ballot count, I could tell he had gotten the majority of the proxies.
Things were quiet for the next few months. In August, we heard whispers about supposed financial improprieties and large amounts of debts the co-op owed. My ears perked up. I went to secret meetings, held by dissidents on and off the board and I learned more. We decided to try and remove most of the current board. To do that, we managed to get a majority of the shareholders to sign two petitions. One was for an informational meeting and the other was the call for a special election to remove five of the seven board members. We accused those board members of corruption, theft, and other skulduggery.
Later, I would learn that there was the fear by some on our side that proper notice hadn’t been given to the non-resident shareholders. Part of the problem was the management company would not cooperate with the secretary and wouldn’t give her the addresses of the non-residents. The result? An hour before the removal meeting, a notice was sent to all shareholders that a deal had been worked out by the board and a dissident faction (within our dissident group! Talk about never being satisfied!). We didn’t call off the meeting, however. The removal vote still went through, and, with more than 50 percent of the shares represented, the five board members were overwhelmingly voted out.
Another special meeting was called in October and our group was elected (even though the ousted board members and their supporters did not participate). The former secretary was chosen as president and I was picked as secretary. But we hit a road block when we were not recognized by the old board. Instead, the holder of unsold shares (who has a permanent spot until he has less than three apartments) orchestrated an agreement for three of the old board members to resign and be replaced by three from the dissident faction.
This didn’t sit well with us. We were, after all, democratically elected. In late November, the newly elected president and I, along with about 30 of our supporters, began a lawsuit to get recognition for the new board and also to obtain an order that would stop the appointed board from refinancing the co-op’s mortgage to replenish a depleted reserve fund. Although we lost (on a technical point), all six of our candidates easily won in a new election. I was selected as the new president. This time, we were seated.
That was in April. Within a month, we had discovered, at the least, widespread mismanagement by the previous boards, and, at the most, outright theft of funds by the old management company (for example, property taxes and water/sewer charges were sometimes not paid for as much as a year). Because of that, we have been extra diligent on all expenses and charges and have attempted to cut costs everywhere while raising fees and revenues where possible.
We have a long road ahead.