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Habitat Magazine Business of Management 2021

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Coop renovation - dan Nov 19, 2021

Hi all, looking for a bit of direction here. I am planning to do some renovations to my recently purchased coop. My architect indicates that the DOB provided a form that building management should complete and return, however building management says it is not the correct form. Just from looking at the form, (DHCR, relating to rent controlled units), it appears to be something that the building would complete if they were doing the renovations. However I’m a single shareholder, so I’m not sure that it should apply to me. I’ve tried DOB but not having much success there, so I’m hoping that someone on this forum might be able to provide some direction.

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Hi, I believe the NYC DOB form you need is the PW1. Section 26A of that form is for co-op signature, where the co-op attests that they have reviewed and approved the proposed project. In order for the co-op to evaluate the project, you should be prepared to submit plans, references, licenses, budgets, tenant protection plans, covid safety plans, etc. -- whatever materials the co-op needs to feel comfortable with your proposed alteration in order to sign the PW1. That said, based on what you wrote, you may wish to reconsider your architect. Co-op renovations are unique given that shareholders do not own their walls or inside them (check your lease), and technically do not even own their units (instead, own shares in the co-op). An architect who does not understand this (apparently yours does not, based on the forms given to date) may not be sufficiently knowledgeable about co-op alterations to successfully complete the project.

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Board president wants all owners to vote on building issues - Elisa Nov 16, 2021

I live in a small condo. Several years ago there was a large assessment and many owners were upset at the cost. The Board President now wants all financial decisions to be voted on and approved by all owners. However, our By Laws state that financial decisions are the responsibility of the Board. How can I convince the Board President that we must restrict these decisions to Board members? Otherwise, we will never have another maintenance increase or assessment approved and the building will decay. As it is, it's been several years since we had a maintenance increase and we have been financing repairs through our reserve fund and of course the reserves are now much lower than before.

> Join the conversation Comments (2)

How do the other board members feel about the president's odd position? Assuming the president is in the minority, that's the end of the matter. If a majority of the board has voted to raise maintenance or impose an assessment, the president has no override power.

If a majority of the board feels the same way, then it's trickier. At least in our Proprietary Lease (we're a coop), maintenance is "as determined by the Board of Directors." This grants power to the board to make the decision on its own, as is customary. However, I don't read this as a *prohibition* of using a shareholder vote to make the determination. I do agree it's a bad idea that abrogates one of the primary responsibilities of being a board member.

On the other hand, I'm not a lawyer, so you may want to consult one.

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Have your co-op attorney, accountant, and/or managing agent talk to the board president to explain the need for a maintenance increase each year, and why not raising maintenance is a really *bad* idea. Maybe the president will listen to professionals.

If your president is intransient and still wants a shareholder vote, have your professionals attend the next shareholder meeting to give the same presentation. This may sway enough votes to get an increase passed.

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> Join the conversation Comments (1)

Why do you feel Steven424 that the maintenance has to be raised every year.
Money can be raised by raising all amenities and sales of the apartments. Also the building can also have a yearly assessment, raising the maintenance is not the answer. Finding a way of lowering cost and cut building expenses would help.
The problem is the condo owners, they complain about the high assessment, why do you think they will except a yearly raise in maintenance. Everyone is moaning about the decision that the President wants everyone to have a say in running the building since they know best.
Let the owners write to the board about their concerns, no one I repeat no one should contact the building lawyer or accountant that is the Executive Boards job. Have a Happy and safe Thanksgiving

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Sponsor Renovation - SL Oct 22, 2021

Hi. We have a few apartments in my building that are still owned by the sponsor/holder of unsold shares prior to the conversion to a coop. He states that he is not required to have a licensed contractor to do his renovations.

Some back story. He is selling apartments now when the tenants move out, and opening walls, knocking down partial walls, redoing tiling, replacing kitchen cabinets, installing dishwashers, sanding and refinishing floors, replacing moldings, etc. Large amounts of debris are being removed.

It is a very old building, and the other shareholders are required to have licensed contractors for such renovations. The sponsor states that it is not construction and does not require a licensed contractor.

The board has had multiple conversations with our managment company to clarify that the renovations are being done properly (according to NYC law, and we asked that proof of license/insurance/workman’s comp and applicable permits be obtained. The sponsor is still oy complying and becomes very verbally abusive and threatening when questioned. We are trying to ensure the safety of our building and tenants.

He is now threatening me because I asked the managment company to make sure the applicable paperwork is in order before work is done.
According to NYC.gov a licensed contractor is required for such work. The sponsor is insisting it is not.

Can someone help clarify the situation?

Thanks

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It's my opinion, without knowing the ins-and-outs of your building and your rules, etc. that even if a sponsor doesn't "require board approval" for alterations, they should still be abiding by the House Rules as it pertains to work hours, utilizing insured and properly licensed contractors and obtaining any required permits from the city as may be needed.

With that being said, if you are not seeing this happen and illegal construction is taking place due to any of these factors, the due diligence that the incoming purchaser should do may point some of this out - especially if improper modifications to the apartment were made.

The Board could always go after the new Shareholder to obtain the correct permits and documentation from DOB, etc., where needed and since the issues run with the shares, and not the shareholder, they could require the new shareholders to file and modify the records / work to ensure full compliance.

Long story short, even if they don't need permission, they still need to follow all of the rules.

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Agree with Mr. Levine. Sponsorship has nothing to do with construction requirements. If shower bodies and light switches are moving, the fact that it is a sponsor apartment does not make illegal plumbing and wiring magically safe.

Call DOB / 311 and register a building complaint. They'll send someone over. Not sure how to STOP the work, though you could suggest that if the work doesn't have permits etc. then it may have to be redone. Last thing he needs is a finished apartment that is determined to be inhabitable. Have to be forceful with this type of person, push as hard as he is pushing.

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Superintendents in Coops - Paul P Oct 08, 2021

For a coop with 140 apartments how many Superintendents
are required ?

By NYState/NYCity law is it a certain ratio established related to the number of Supers/Apartments ?

> Join the conversation Comments (1)

There are two areas of NYC laws that touch upon this. You are over 9 units, so the first definitely applies to you: The first is the Housing Maintenance Code, Article 13, and it states that "a building of 9 apartments or more" is subject to the requirements.

The second is the Multiple Dwelling Law Article 3/title 83, which states "a dwelling with thirteen or more tenants."

Both articles state either/or... a 24 hour janitor or housekeeper or a janitor can reside in the building or a janitor can reside within 200 feet of the building (or the agent or owner lives in the building).

If you have a responsible party for the Coop that lives in the building (the Board President, or the like) who can be responsible in an emergency, you can most likely satisfy the requirements of the Fair Housing Maintenance Code, which is quoted at the top. I would put that person on the Multiple Dwelling Registration of the building as well.

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Fee for Exterminator - mr.gardenz Oct 07, 2021

As a multiple dwelling, is a co-op responsible for regular exterminating services?
Can a co-op charge back shareholders for this service?
Can a co-op waive the charge for resident shareholders but charge for non-residents who are subletting with the Board's approval - or rent regulated tenants of a Holder of Unsold Shares?

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Coops may not arbitrarily place legal fees on your monthly bill - DM Oct 01, 2021

They cannot charge you for their own legal fees unless they have prevailed in a court action. Just thought I should remind people of this.

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If a co-op incurs legal fees during the normal course of their operations, and the board votes a onetime assessment in the amount of those legal fees, I believe the board has the authority to collect the pro-rata amount of the assessment from each unit in the form of a debit on the monthly maintenance invoice.

Prevailing or not in the legal action has no effect on the board's power to authorize and collect an assessment.

If your Proprietary Lease says different, the board must follow the terms of the lease.

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It does not relate to my point.

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I apologize. Could you restate your point so I get it? Maybe offer an example?

Thanks.

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No apology is necessary but I don't want to confuse readers.
This concerns legal fees being art arbitrarily placed on a shareholder maitenance statement that are otherwise the responsibility of the coop - fees that may relate to issues concerning that specific apartment but are not because of an actual default with a court determination. Thsi could otherwise lead to abuse and misuse by the coop. If a shareholder consults an attorney because they have a bad board or the coop is discriminating against them or that are being harassed by staff, etc. then those fees are the responsibility of the shareholder. Unless the shareholder commences a full court action and prevails.

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"The general rule in New York is that each party to a litigation is responsible for its own legal fees, unless otherwise provided by statute or contract. The typical co-op lease’s reimbursement clause limits the coop’s recovery to reasonable attorneys’ fees and disbursements incurred in instituting an action or proceeding based on a default by the shareholder, or while defending or asserting a counterclaim in a proceeding brought by a shareholder.

Unless the recovery of attorneys’ fees and disbursements is specifically provided for in the lease clause, courts have held that a co-op does not have a right to recovery. It is common for a board to incur legal fees relating to a shareholder default or a violation of a lease without ever beginning any legal action. Legal fees for consultation with counsel, preparation of demand letters, and counsel’s communication and negotiation with a shareholder or a shareholder’s attorney may all occur before a lawsuit begins. However, these pre-litigation fees and costs are not recoverable under the standard lease provision.

There are also legal disputes that do not involve defaults and may not even necessarily arise from a shareholder’s wrongdoing. Unfortunately, boards are not able to recover legal fees for these either under the standard lease provision.

Even if legal fees are incurred in a litigation, and even if they arise from a shareholder’s default, New York courts require that the co-op be the prevailing party in the proceeding in order to recover legal fees. This requires the successful party to win on the central claims in the litigation in order to obtain substantial relief, even in a settlement."

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Proxy Forms - DP Sep 23, 2021

Does anyone know if it's legally required to have a space for a coop's SHARES on a Proxy form? When I was on the board, we always included a line for that. The one I received this year (from a new Mgmt. company) does not include it. Thanks.

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Most cooperatives allow one vote regardless of how many shares the unit has. Unless your co-op has cumulative voting which is one vote per share, it is not necessary to have the number of shares on the Proxy/Ballot. A provision in your occupancy agreement and house rules will explain your voting procedures.

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The official number of shares per unit should be maintained by the Board Secretary and/or Managing Agent. A line on a proxy form where the share count is supposed to be filled in by the shareholder is meaningless because it is often inaccurate or wildly exaggerated.

I've seen a number of different voting schemes, and as far as I know, the Bylaws are the authoritative source for determining how votes are counted.

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We also have a line for number of shares on our standard proxy, but the presence of the line isn't terribly important. The apartment has a fixed number of shares and this number is easily verified, regardless of what the shareholder writes on the line.

Concerning the prior comment by "NYC": in the great majority of coops, voting is *absolutely* weighted by shares. One vote per unit is rare in coops. In standard voting, if your unit has 100 shares and your board has seven members, then each person you vote for gets 100, regardless of whether you vote for one person or seven. With cumulative voting - which is only allowed if your coop's Certificate of Incorporation permits it - you can pile up your votes on fewer people. Continuing the example, you could vote 700 shares for one person instead of 100 shares for each of seven people.

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Thanks Carl, that's what ment. Your explanation was much clearer. one ballot per unit, one vote for each candidate. I come from background n corporate proxies where the shares are a necessity on the ballots.

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Sale in delay - MARISA Sep 15, 2021

I’m selling my coop unit, I signed already the buyers offer, but the board members of the complex are postponing and postponing the personal new buyer interview , due that they have leave for vacations and the buyer is in one hair to quit. I spoke with the manager, the President is the one out till October, and they said the vicepresident can’t do the job, that has to be the President with two more members. What can I do???? I’m losing money. Please help with advise

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Based on the scenario you describe, the attorney representing you in this transaction should be all over the board and managing agent to shake this free and move it forward.

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Drain pipe leaking into apartments - emkharts Sep 10, 2021

There is a drain pipe that has been leaking into our garage since early July. The management put buckets under the leak to catch the water. They never came to inspect apartments running along the pipe. This holiday weekend I noticed water damage on my kitchen wall and ceiling that the pipe runs alongside. My ceiling is brown, paint bubbling and water dripping. The manager called me on Sunday as I left a message with service and I told her my ceiling has water damage and I was told the super will be back on Tuesday and will call me to come look. Tuesday I take off work to be home and super never shows up, I find out at noon from the Porter that he didn't come to work and nobody called or notified me. Wednesday I stop at the management office and the woman in charge is defensive when I complain about not being notified that she wasn't in because of Jewish holiday and didnt know that super was out but she had left him a note and I should have called the office. Today is Friday, 6 days since management has been notified and I have heard nothing about what they are doing to fix this pipe. They have allowed this leak to continue for 2 months and now I feel there is mold growing on my ceiling and they are in no rush to address it. It is still leaking. Is this not total negligence on management part? How can I deal with a property manager who doesn't want to address real problems?

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Before going any further with the MA, I would suggest you take copious amounts of photos of every bit of damage visible. Don't just take close-ups, but take a few "establishing" shots that show the damaged area(s) in the context of each room. Make sure to include shots of the area of pipes where the water is dripping from.

Then, call your private insurance carrier (not the co-ops insurance carrier) and open a file. This will set the wheels in motion for an adjuster to visit your apartment to take their own photos and measurements. You may be asked for a copy of your proprietary lease. Give it to the adjuster.

Once the adjuster files his report, your insurance company will decide how to proceed. If the damage is truly caused by a common element (common drain pipe) you may not have anything to do as your insurance will handle it.

What you shouldn't do is wait any longer to contact your insurance company. Two months is a long time to go unreported, and if there is mold you need to have it taken care of right away.

Good Luck!

--- Steve, a/k/a The Borg

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Than you Steve for the advice. I did take many photos and a video of water raining down from the pipe into buckets in the garage directly underneath my kitchen on the day I found the damage.
I also contacted my insurance the day after the super inspected my apartment. They suggest I also contact the building inspector and threaten legal action with an attorney since the management company has been aware since July and done nothing to find the source of leak and allow apartments to sustain damage. I was told by the Super that an apartment 1 floor above in adjacent line also has damage in bathroom so the management has been aware of leaking into walls and allowed it to continue. They also suggest that the management company will try to suggest that they are only responsible for replacing the drywall even though the wall cabinet above my stove may need replacing as the damage is all along the side wall that my cabinets are attached to. That entire side wall is damaged and my stove, wall cabinets will need removal to replace it. They suggest that if I file a claim, even though it is the building responsibility, it will count against me and my premium will rise. I just changed my insurance company in June after 20 years with allstate with 0 claims. This is very frustrating as this management company does not communicate at all and believes they have no responsibility to tell me anything.

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> Join the conversation Comments (1)

What about your board? Contact the President of the management co? I’ve contacted my management co President when I didn’t receive proper service or response?

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Thanks but the President of the management company is the person I spoke to their first time who "left a note" for the super. She is the worst person to deal with and the one who tells everyone that they are not responsible to do anything for you no matter what the issue. The board does whatever she wants. The board has been the same people for 20 years.

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My only suggestion is to discover WHO it is that is really standing in the way of solving your problem. Management is often slow to respond, but Management generally follows the Board's lead when it comes to spending money on repairs, etc.

BTW, this Weds. pm–Thursday is also a Jewish holiday... the most holy day on the Jewish calendar, so.......

I've had a similar experience in my coop. I moved into a beautiful gut-renovated top-floor apartment. Within a month, the rains came and every time it rained, it rained into my BR (for years). I had to lay down tarps whenever I left the apt. It took years before they fixed the roof (very expensive, no small task) and years more before they finally fixed my ceiling. I sent photos with each rain and each time the surrounding wet area grew. Now, there's a new wet spot in the LR and I don't relish starting the fight all over again, especially b/c the Board now is even worse. ; (

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> Join the conversation Comments (2)

Thanks. I'm sorry to hear about your issue. That sounds serious and wouldn't that be a health issue to allow your ceiling to be wet for years. Mold is serious. That is what I am worried about with my ceiling. It is brown. And I've noticed small bugs flying around lately, like gnats. I'm sure it's coming from the wetness in the ceiling.
I understand it was a big Jewish holiday this week but there are non Jewish employees in the office who should be handling things.

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There is something called the Warranty of Habitability which basically states that the owner of a property (or in the case of a co-op, the common areas of a property) has a legal obligation to maintain what they own in habitable conditions. This includes being free of leaks and especially mold and vermin.

It sounds like the co-op boards are in violation. So what to do. I would first contact my private co-op/condo insurance carrier. Most have a provision that in the event of damage or other casualty they will pay to make your apartment habitable and then go after whoever is obligated to pay. Most likely the boards. This is a general statement and may not apply in all situations. But it is the least expensive.

The next option is to file a formal complaint with the Dept of Buildings. They'll probably send an investigator so they know what they're involvement is. This can be a very protracted process.

Your final recourse is to hire your own attorney. Expensive, but the most thorough solution. If you prevail you can probably get your attorney's fees reimbursed.

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Prevailing Wage Law - Carl Tait Sep 10, 2021

Now that the Prevailing Wage bill has been signed into law by Gov. Hochul, how are coops and condos with live-in supers planning to deal with this? In many buildings (including ours), a significant part of the super's compensation is a rent-free apartment. But non-cash compensation seems unlikely to satisfy the requirements of the new law, especially when no explicit value has been placed on it. I have not heard any guidance on this so far. Thoughts?

One possibility - assuming it passes legal muster (I'm not a lawyer) - would be to make the rental value explicit by charging the super rent while paying a higher salary to cover that rent, meeting the requirements of the new law. This would of course be burdensome and ludicrous for everyone.

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I don't think there is a one-size-fits-all answer to this question, and it is a very good one. I feel your best option right now is to contact an attorney who specializes in real estate and co-op/condo law. They'll probably tell you that until there is regulatory clarification or case law, no one knows. The reason for seeing an attorney is to get advice on what you should do *now*, so you don't run afoul of what may be coming.

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