New York's Cooperative and Condominium Community

Habitat Magazine Business of Management 2021



Worst Case

Read this article in the digital edition.

Carolyn Hahn
127-129-131 West 96th Street Owners Corporation
Upper West Side, Manhattan


My first 11 years as board president of an eight-unit co-op in Manhattan’s East 20s were less a compliment to my skills than a reflection of the Last Man Standing school of co-op governance. I inherited my position on the board by default from the departing seller, who seemed oddly lighthearted as she left the closing. In retrospect… well, everything’s clearer in retrospect. But let’s start out with two hard-won lessons I learned as a board officer for most of the last 22 years, both of which came from “The Little Co-op That Couldn’t.”

Our building was converted to a co-op in 1984 and went through several years of rapid flipping. Real estate values always go up, we knew. When I bought in 1989, the market had already crashed, and my fellow shareholders who had married and needed to sell gave up and sublet. Those of us who still lived there were the board.

To us, each threat was equally mystifying. The iron pipe bringing water in from the street was badly rusted. It could go at any moment and we would have to pay $5,000 to get it fixed. The developers who converted the building had looted the underlying mortgage, and the maintenance, high to begin with, had only one way to go as expenses rose. Our J-51 tax abatement would expire someday and, worst case, we’d never be able to afford the taxes. We debated suing our commercial tenant, who had a sweetheart lease from the developer that had him paying $325 a month until 2014, but, worst case, we could lose and have to deal with the resulting acrimony forever. Also, he alone controlled access to the basement, which housed our boiler, so, worst case, he could blow us all up.

Permutations on this theme were endless, including the saga of Yoshi’s apartment, on which he stopped paying maintenance (goodbye to one-eighth of our income). The bank took over his mortgage, then that bank merged and sold it to a bank in Buffalo, which, like the first bank, declined to pay the monthly maintenance. One day, a few months later, I started up the stairs to see someone coming out of the apartment with a sheet of drywall. He introduced himself as the new owner of the unit, down from Buffalo, where he said he’d bought the unit at auction for $20,000 from the bank (our apartments were now officially worthless). He was starting some renovations and hoped to quickly flip it, possibly even before he closed with the bank for the actual purchase.

A few days later, a letter arrived for each of the resident board members. Crisply professional and signed with a flourish, a subletting ex-board member excoriated the board for allowing this situation to occur. The new guy hadn’t even closed yet – he didn’t own the apartment! He couldn’t just start renovations! One member of the board, a young medical resident who had grown increasingly sleepless and cranky as his residency progressed, reacted to the letter by immediately resigning his position on the board via crisply professional letter, also signed with a flourish.

By the mid-’90s, the board was down to me and the two non-resident spouses of shareholders. The attitude at that point was that everything had to be decided based on a simple test: could it be put off or did it need to be fixed right now?

In the late ’90s, the building’s metal and concrete staircase began to rust badly, a situation that grew steadily more severe. “Worst case,” said one of my fellow board members, “all three floors wouldn’t collapse at once, so the person would only fall that one flight.” I lived on the top floor, so I was in a good position to test out whether that was actually the worst that could happen. We debated whether to replace all the stairs or just the few that were nearly eaten through with rust. The stairs did collapse, finally. Nobody was hurt, but the entire three flights of stairs had to be replaced.

In 2000, we sold the building. The worst-case scenario for us – that we’d be there forever – never happened. I subsequently found an apartment in a 17-story building that was immaculate, with a staff that was polite and attentive. There was a solid reserve fund. My apartment was smaller, but I could afford the mortgage and the much lower maintenance. Within two years, I joined the board, not because of my great financial acumen (of which I had none), but because board membership isn’t about superstars – it’s about being there to help solve the constant problems that come up.

And worst case: you don’t have to reinvent the wheel. Other co-ops have been there, done that. Learn from them.

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