Your sole responsibility, as a Board Member, is to consider any application to buy with no consideration to legally protected status, such as race, religious orientation, age, etc.

I assume you are a new member of your board and strongly urge you to read widely, deeply and quickly everything you can find about what it means - legally and otherwise - to be a member of a board of directors in a co-op. There are legal pitfalls aplenty, and you don't want to be the cause of any action through unfamiliarity with, say, housing law, as an example.

Thanks for your comments. I am aware of not discriminating against any applicants and FYI I am not Caucasian. However, if the board's responsibility was only fiduciary, then boards would never interview prospective buyers or subletters, right? All the info they would need would be in black and white in the board package.

Not necessarily Carol..

An interview many times reveals insights to the financial picture as well... do they plan on subletting in a couple months, is she pregnant then quitting her job to be a full time mom (cutting the current salary in half), lots of other questions and clues as to the posterity of the prospective shareholder and if they are a character match for your building (ie: they sing opera all day or teach piano in the afternoons... they hate kids and its a kid friendly building..)

Best
~AR

There are other safeguards....
What the board should always do with all cash offers is place a 2-5 year wait period on any refinances. This way, A buyer that would have shaky financials and would otherwise be denied, would be less apt to buy all cash with daddy’s money and then refinance and pay back in a year.
did the way i worded that make sense?

~AR

Thank you for your reply. If the sale went through for all cash with a 2-5 year moratorium on mortgage, it would be too late by then, wouldn't it? Sure, the parents couldn't be repaid immediately, but the building would be stuck with the deadbeat child, wouldn't it?

Yes, but u8nfortunately, if the rest of the sales package was ok, you just have to hope they mature well in the 2-5 years!
Still, the board must approve the refinance and any shareholder changes, so there is still some control.

On another note, if there is a refinance with the parents name on it, it may be beneficial in on sense because it is easier sometimes to collect arrears when a bank is involved (they usually pay the arrears to protect their interest)

Best
~AR

So the parents are paying for the apartment. This means they are gifting the apartment and thus one may ask that they file a notarized letter to that effect? Was a "gift" letter requested. Don't forget gifts are subject to IRS rules.

Are the parents gifting the maintenance? If yes, are they living in the apartment? If no, then in our co-op its not permitted.

Without going through ratios, let me assert that anyone buying a unit in our co-op must have a gross annual salary of $50,000. If two are in the apartment and both are working then the "base" it higher.

Regardless, one may not have annual expenses that exceed 30% of one's gross income. Thus in this case its $13,200 (maintenance) + assessments + electrical; costs + natural gas costs, education costs + + +).

If one moves into the building with or without a mortgage, our rules stipulate there is no new mortgage or refinancing within the first five years following the sale.

A poster here said if parents gift an apt (and mention was made of their paying the maintenance too) - that "one may ask that they file a notarized letter to that effect".

I was in notarization/mortage holding work for years. Many people mistakenly think that notarizing a document means that the signer agrees to comply with any promise made in the document or that any statement made in the document is true.

Having a letter or whatever notarized is verification that the signer is who he says he is - nothing more. It doesn't bind the signer to anything that he agrees to or states just by virtue of the fact that the document is notarized.

Ask for a copy of the IRS gift form....By the way we have sometimes asked an applicant to sign a form that allows us to obtain the 1040 etc. information direct from the IRS. We do this when there is a fish smell to the application. 99 of 100 times, the fish mongers refuse.

In our coop even if an apt is gifted the occupant has to have a documentable income. If the parents are going to pay the maintenance then they have to be co-purchasers with full Board pkgs submitted.

Great note!!

Dear Escape,

Your posting is timely. In an effort to de-risk our reserve funds and to tackle that note in the audited financial statements, our Co-op purchased several CD’s from Vanguard (all of our reserve funds are at Vanguard). They are all FDIC insured.

Over the weekend, I saw that three banks in Puerto Rico failed. We have CD’s at two of them totaling $72k. As a result of the FDIC insurance, I do not foresee any problem getting the funds back (perhaps we might encounter a small delay).

As a former Treasurer and current President, believe me that it is much easier going to the Co-op and the Board saying that we may have a small delay in accessing the funds than it would have been saying that the funds are fully or partially gone. I am so glad that we have that FDIC coverage!

You never know when a bank is going to fail until after it does fail. In my opinion, all co-ops/Condos and Con-opts need to make sure that all of their funds are FDIC covered immediately. The only exception would be to have the funds placed in similarly guaranteed investments like U.S. Treasury Bills/notes or agencies. Also in my opinion, I would not even invest in municipals at the moment due to all of the trouble our state and local governments are having.

Here is the link to the news article: http://www.washingtonpost.com/wp-dyn/content/article/2010/04/30/AR2010043003084.html?wprss=rss_business

Steve

WOW!

~AR

Income is not the goal. Protection is the objective. All our reserve funds are in T-Bills. There is never a problem of liquidity or access.

Contact an ADA advocacy organization for advice and referrals.

This is just wrong, wrong, wrong.

The board of Lido Towers is behaving both illegally and immorally. As RLM says, it's time to contact a lawyer -- AND the press. Once you get an attorney involved, if the board doesn't start behaving like human beings, then it's time to get the newspapers and TV cameras in.

Uncaring board vs. a frail woman in a wheelchair. I'd love to see that all over the 6 o'clock news.

Shame on you, Lido Towers board.

contact united spinal org, they are in queens

This does not make sense do not allow this to happen.
They should fix the problem after it has been corrected, have your ceiling opened up so it could dry out so there is no chance of any mold to grow. e-mail me if ou would like to talk some more.

if the leak is in the area betweenthe apartments, it would be the co-op responsibility to repair it.
in many cases if the leak is in the primary plumbing, meaning the flushomotor or connecting pipes ,in my case it is the co-ops responsibility, but not all.
exterior leaks are not that hard to fix.
i guess the issue is , is it the coops responsibility or the share-owners and where exactly is it leaking from? even a flushometer leak could be negated by a bucket until fixed

Find it funny that you should ask where is the leak coming from (how do I know) also outside leaks are easy to find???. Let me break it down simply for you. In most Coops I know of, outside the wall = shareholder, Inside = Coop. You need to follow up if you want it fixed. Only then can you address liability. A good super/plumbing Co should be able to find out very quickly. Document take photos,call management etc, like I previoulsy said.

Another RM

In the Coop that I manage I have never been restricted from carrying out repairs. However for what it is worth here is my two cents on what I would do. Two choices here. If you want to be nice or not....

1. Document everything,take photographs and get a letter from the Coop and shareholder assuring you that the repairs will be carried out when your upstairs neighbour take care of his issues so to speak. Taking care of it means that the ceiling damage once repaired will not be noticable.

2. Same as above documentation wise, but write the Coop/shareholder saying you want the issue resolved right away. If they drag there feet threaten legal action.

ANR

it is the big bending pipe connecting the toilet to the waste line.

The pipe you may be talking about is called the lead-bend and a plumber will have to cut out the exisiting one if it is leaking and will have to gain access to the apartment which the toilet is in and the one below it at the same time.

If it is only the flange or the wax gasket on the lead-bend then he may only need access to the apartment which the toilet is located.



Good luck!

Suggest you print and show this to the Board.
Cooperative Ordered to Purchase Apartment
http://cooperator.com/articles/1582/1/Cooperative-Ordered-to-Purchase-Apartment/Page1.html

Here's the listing for the above unit:
http://www.trulia.com/property/3002097063-2077-Center-Ave-Fort-Lee-NJ-07024

The co-op still can't sell the unit for the hugely discounted $770,000 price after paying over a million to buy it.

And, don't forget all the residents are forced into underwriting the "unpaid" maintenance and taxes for the vacant unit owned by the co-op because of the Board's actions or inactions.

Do you think a $300,00 loss (if they even sell it) a multi-year payment of taxes and underlying building maintenance and legal fees are worth it? And the building has been "holding" the apartment for 2-1/2 years with no buyers in sight. Let's see -- maintenance + taxes at perhaps $4,500 a month for 30 months is another $135,000 out the window.

Do you think the board acted properly and discharged its fiduciary duties properly?

What is your judgment?

Ensure there is a paper trail for your complaint. If you didn't write one before, then document the first day that you complained in the new letter. Send letter to: managing agent, president of board and co-op attorney. Be clear, be forthright, be complete, etc. And ask for a written response as to "When will the identified leak be repaired in its entirety?

CALL A LAWYER.

You are kidding right? Never heard of that right-off!

donate to me I will write it off!!

Could one, two or more posters who are using the name "Anonymous" please change to a different name? It's confusing to know who's asking questions and who's providing answers when several posters all have the same name.

Would appreciate it. Thanks.

There is no deduction or "write off" if you voluntarily give money to your coop. Your coop is not a charity. Frankly, it's probably not even a "Not For Profit". Most coops are just regular corporations that just have a balanced budget. And if there's profit, the reason you don't pay taxes is there is usually a huge loss carryforward based upon the depreciation of the building.

There is a numerical code under the date it is an the individual code for each contributor, thus you will know who is writing even if they change the name from time to time.

One needs to understand the definition of a not-for-profit corporation and a non-profit corporation. Co-ops are the former, charities are the latter..

We have been told that 90% owner occupied is considered a good investment. The reasonsing behind this is that live-in owners will vote FOR improvements and care about the daily maintance of the Building. And since they are not making a profit, as are subletters, they care more about keeping the cost down..IE: Maintance...

You may want to consider substancially raising sublet fees, not only to discourage subletters,,, but to make money for the building.
VP

I live in a building where they don't even charge sublet fees nor do they know who's subletting or not. We have a building full of renters and it seems shareholders just do as they please when they want to sublet. Management doesn't check the board doesn't seem to care or check? What do you do in a situation like that. We have people in our building we have never seem before. That's quite upsetting when we could be collecting money and dissuade this from happening.

Yonkers -- See my >>Reply to Yonkers<< 4/23 post. If your Lease says SHs OR their children, etc., the children can live there alone. If it says SHs AND their children, the SHs must live there at the same time - but if SHs haven't lived there at the same time you've set a precedent, trying to prevent this in future will be near impossible, and courts most likely wouldn't rule in your favor on this.

Anonymous -- If your mgmt and board don't care or do anything about sublets, you have no sublet fees, and you have a lot of residents you don't know, you have to replace your board with SHs who will take remedial action. As long as you have a board that does nothing to correct these problems, nothing will change. Also, mgmt works for the board/coop and if mgmt is as negligent on this issue as your board is, a new board that will set things right should also change the mgmt company.

Read your Bylaws. Ours states that an apartment cannot be sold as an investment, and the owner cannot sublet for two years after the sale.
Check to see what the Bylaws say about changing bylaws. Also, the MangAgent works for YOU. You may want to remind him of this. Also, as an owner, you are allowed by law, to see the records of ownership. The MangAgent is required to make available to you, and you may check in person the stock-certificts. YOU are an OWNER, and have the right to know who you are in business with.
Most of all, start the Eamil trail. Get as many Emails as possible, and communicate with other shareholders. Keep it business-like and non-peraonal. As oppose to statements ask question? IE. Is it legal to.....?

They wont like to put things in writing, but Email is your most powerful tool. VP

op here, always a problem logging in.thanks for the response.
i requested a copy of the shareholders list, was told by the manging agent i was not authorized, i told him i dam well was, he said he had 20 years experience, yada yada, i had the shareholders list within a week. about a year later, another long term shareholder, called and asked for the shareholder list, the manging agent told her he she was not allowed to have it, she fought with him, since i had prepped her and she got it.
this shows the type of characters i am dealing with , every rock i turn over i find bs, self dealing or manipulation. i am very worried i am going to find a lot worse.
i think this past annual meeting 2009 they wanted to pass a unannounced change through. the managing agent put up flyers all over the building about giving your proxys to a baord member if you were unable to attend.
i know that the correct wording is give your proxys to a shareholder. this was the first time in over twenty years, that "boardmember" was used, all manipulation. The annual financial report for the june 2009 annual meeting arrived 3 days after the meeting. For over 20 years we always had the financial report well before the annual meeting. however the year before we had a big discussion over 27,000 zero drop error, that the board president still refuse to state when it was discovered. i have a good suspicion that he never informed the other board members or the treasurer
so i guess in 2009 he didn't the financials discussed.
To the other poster, read your proprietary lease, ch 14 . if it says the shareholder and son, grandparent, thst means the shareholder still has to live there. If it says "or" then they can live there without the shareholder. Most say "and"
out board president states that the grandparent and children can live ther without the shareholder, he makes up his own rules as he goes along. i have too much on my plate , and the few new resident shareholders , seem to be scared to do anything.
i think one tactic may be to inform the shareholders who are legally subletting and paying sublet fees, to give them the info, maybe they will decide why should they pay if 15 other people are not paying. The unsold share people just want lower prices so they wont care.
i did see a payment that i need to check into in the new mortgage we obtained from the bank that the owner of the management company is on the BOD, and the pres of the coop board is an investor. according to the laws , the president of the co-op board should not have voted. i am sure he did vote.

Yonkers &#150; Your coop has a lot of issues. Are you on the board? If so, talk to the coop attorney. If you had 80% resident SHs who weren&#146;t holders of unsold shares/investors, why do you have so many now who sublet and don&#146;t pay sublet fees, and why do some have &#147;permission&#148; to sublet and pay sublet fees?

This is one issue, but any SH who lives or lived in the coop isn't a holder of unsold shares/investor. If they sublet, they must pay sublet fees or any other fees SHs are subject to, and comply with all policies, rules and procedures SHs are subject to.

You can&#146;t resolve all your issues alone. Try to get a few resident SHs to work with you Non-resident SHs may not too supportive, especially regarding paying sublet fees, etc. Your &#147;team&#148; (you and the SHs you get to help you) should look for people to run for the board. It sounds like your board (the president?) is a major problem. Voting the board (or the president) out, or at least getting a board majority that will insist on seeing financials, vote down questionable things, etc. is probably a needed first step. Talk this up before your next annual meeting/election. You said you have the SH list. Have your team compose a well-written, clear, positive letter to all SHs telling them the coop&#146;s financial stability has been deteriorating and it&#146;s time for change to turn things around.

If you have tangible proof of board misdoings it's to your advantage, but don&#146;t say outright the board or president is &#147;shady&#148; or doing anything illegal if you can&#146;t prove it. Talk up the coop&#146;s problems, but don&#146;t just focus on them. If, as you said, you have repeated assessments, etc., your SHs know the coop has problems. Focus on solutions.

Some SHs don&#146;t get involved in the coop because of careers, family, etc. and don&#146;t have the time and energy for it. That&#146;s true in all buildings. But others think trying to change things won&#146;t do any good (because of the board/whatever). Convince them things can be changed to everyone's benefit.

It isn&#146;t easy to win over apathetic SHs, but it can be done. I admire you for wanting to pull your coop out of the hole it seems to be in. I don&#146;t know if my reply is of help, but go for it, and good luck!

To escape from Yonkers - we have practically the same problem in our coop which is an original - We have many relatives, children, parents occupying the apartments and the Owner left years ago - The problem is that a board member who controls the board keeps stating that rentals are illegal per corporate documents but that is not true, and that relatives are not renters - However rentals are allowed when approved by Board so we have the renters but no fees and worse no documents which would protect all the parties and also we are not allowed proxies - Some board members have challenged her but her people do not understand - however if pressed I wonder what the rent stabilization board would say about what is being charged because I believe some of these rentals are paying all the assessments and increases that the shareholders are charged and they are usually 8%+ to a year when we had 25%+ which would be against rent stabilization law, and the others who just rent, what are the Owners charging and also the NYC Dept of Finance who gives us the credits on our RE taxes for abatements to those apartments when the Owner is not in apartment,(afterall it is the apartment and the Owner who have qualified for those -does anyone have ideas as to whether this approach to the board would make a difference

NYARM.com

Contact Margie Russell at NYARM (212) 216-0654

If you have any type of water leak the building should take care of this prompltly as this is in their best interest from a financial point and a prevenative maintenance one. If you rent in a COOP, then you really need to speak to your landlord regarding your maintenance issues. If you were in a rental building where all of the apartments were rental then yes your maintenance issues should be addressed by the building staff in a timely manner.

I am a renter in a co-op bldg & my apt is not a sublease apt. Can the co-op board continue to keep going up on my rent until i can no longer aford to pay it?

Regarding the water leak, you are correct. My co-op board is dysfunctional. If you only knew the half.

adt: If you're a renter in a rent-stabilized apt - not a sublet tenant in a coop shareholder's apt - the coop has no right to collect rent, maintenance or whatever they elect to call it from you, let alone raise it.

The coop can only deal with a shareholder's coop financial matters. If you don't pay your rent, only the landlord who owns the apt you live in can go after you for it, and he's the only one you should pay it to. Similarly, if a sublet tenant doesn't pay rent to the shareholder of his apt, the coop can't go after that tenant. The coop can only collect maintenance from shareholders. If a shareholder can't pay his maintenance because his sublet tenant doesn't pay his rent, that's an issue the coop has to resolve with the shareholder.

Also, if you live in a rent-stablized apt, your landlord can't raise your rent whenver, or as much, as he wants to. Per NYC law, a landlord can only raise your rent 3$ with every 1-year lease or 6% with every 2-year lease.

adt. where is the landlord/owner of your apt? Why isn't he collecting your rent? Unless we don't have all the facts here, stop paying money to the coop and talk to your apt landlord.

Who are you renting from? If it's the sponsor -- where you would be under rent control or rent stabalization laws -- you should check with the DOB. Otherwise, if you are renting from an owner, you should have a sublet contract -- and they can charge anything they want.

Again, whomever owns the apartment is responsible for dealing with the water leak. Either having it repaired or notifying the Coop board.

I found out, because my bldg is under nyc hdfc, which is a housing program that is owned & operated by some of the tenants that are shareholders they can do what they want. A certain percentage of the apts have to be rented & another percentage are coop. The board can go up any amount they want on the renters & also charge what they want for the rentals. I thank you all for your responses.

Is the Coop your Landlord? If not, you have to take up your issues directly with the owner of your apartment.

If you rent from an owner -- its the owner who is passing the increses onto you -- and it is leagal for a Coop to have Sublet fees -- mostly to discourage owners from trying to run rental businesses in a coop.

If you have leaks etc, again its the responsiblity of the owner of the apartment. The OWNER has to contact the Coop or if the leaks etc, are not covered in the coop agreement, the owner is responsible for the repairs.

The Coop has the right to charge sublet fees. The idea of a Coop is NOT to live in a rental building, and in most coops, sublets are not allowed.
VP

Hello! My Co-op owns about 10 rental units. We obtained them after the Sponsor went bankrupt and we sell them when the renters move out. Rent goes up every year based on what the rent control board sets. I don't recognize your initials adt and so I hope you are not in my complex however if you have a leak, report it to the super. In resident/super relations and if you are not already doing this, I have found that a small tip either at the Holidays or on a small per service basis often helps (the same with other trade-people). If they do not respond within a reasonable amount of time, call the Managing Agent and/or a Board Member. Then if no response, call 311. If you live in 31 Nagle, 37 Nagle or 14 Bogardus Place, shoot me an e-mail and I will see to it that you get your leak fixed.

Good-luck!

wow
I see many violations and unlawful practices here. May I ask how many units the sponsor owns ( % ) ? How many seats does the sponsor control on the board ?

The building went co-op 1983
There are 57 apartments 29 are still owned by the sponsor and 1 is allotted to the super.
There are a total of 5 board seats.
Sponsor has 60% of voting stock, and has two members on the board, -- two are guaranteed by the prop lease so long as the sponsor owns 25% or more of stock and guaranteed at least one board seat so long as the sponsor holds 1 or more shares in the cooperative.

Our building uses cumulative voting, giving the sponsor a looming influence over the board.
I was voted in by the people last year. The reason for my posting is that I have approached several people about joining in an attempt to make further change, and they agreed that unless the board operations become more transparent and they will be able to participate in a meaningful way, they don&#146;t want to join, hence my original posting.
Under my insistence we have some major accomplishments &#150; we hired an engineer to conduct a building survey, improved the financial data provided in the financial reports, even they come so late.
There is much to do, at least If I can have a level of comfort that the board will proceed in good faith and be in compliance of the law, or governing documents, or at least some sense that we are following a process used by other boards, it would make a world of difference.

Thanks again, I appreciate any thoughts or feedback.

Cumulative voting gives you "the minority" an advantage actually.

You must inform the shareholders about the situation and rally them around a group willing to take over the board. With three out of five members, a quorum is reached. By the way, no decision can be made by a board without a quorum or majority. Meaning you can and should hire a new independent management company, a new attorney and a new accountant.

The sponsor shouldn't be in control of the building after all those years. By law, although a little unclear, a sponsor must sell his apartments at a regular pace.

But most importantly, you must take control of the finances of the building. You can't have a sponsor manage your building. There's a big potential for fraud and conflict of interest.

If things get ugly with the sponsor, you could also hire an attorney to represent you and protect your interests.

David G &#150; If 29 of your 57 apts are still sponsor-owned, half your residents have no say in any coop matters because the sponsor still has the shares for their apts. You said your Prop Lease gives him 2 board seats as long as he owns 25% of the shares and 1 board seat as long as he owns 1 apt. Change will be very difficult if he still has so much control &#150; and manages the bldg too.

The first change I suggest is trying to amend the Prop Lease to change those terms. Check your Prop Lease and by-laws, or have an attorney do it. Don&#146;t take the sponsor&#146;s word for what they state. A shareholder vote is usually required to amend a Prop Lease, but some allow it with a board majority vote. If 3 of your 5 board members can vote to do this (2 obviously won&#146;t if the sponsor has those slots), you could get out from under the sponsor&#146;s thumb. Then it would be easier to make a lot of other changes. I think it&#146;s worth looking into this possibility.

You can arrange to have meeting done via a conference call. You can use SKYPE for the call and do it for free.
Also, all of your documents can be scanned into your computer and distributed to the full board.
Again it's relatively inexpensive and easy to learn.
You can feel free to get free advise from me regarding the above.
Barry

The Managing company works for you -- the Board! Your are paying them! If they cannot meet with you at the building -- (and it sounds like you have many other reasons) you should fire them. You will be overwhelmed with M/C who want to take their place.

Years ago, when we realized that the Board was not going to fire an unpopular M/C -- we wrote the S/H and this forced the board members who were resisting, to come around. Tell the S/H in a business-like manner how the Bylaws are being ignored, and the building is being run.

EmailPower: Collect S/H Emails, and start communicating directly with the Shareholders. Start a revolution!

Oh Boy, and I thought my building was the only one with underhanded practices. I agree, rally the s/h, email them, memo's if needed under their door. In my building many s/h are apathetic because of all the factions involved. Our board is divided, as stated cummulative voting gives a majority to one group. S/H must speak up and rally with you guys, especially the people on the board trying to do the right thing. It's difficult, we have board members that circumvent the By-Laws, we are still fighting like mad, it's a tough and frustrating situation. Some people join a board because they want control i.e., power, some for their own agenda, the board members who really care and work for all usually have the most difficult time. But again, Rally the S/H, let them know everything that board members do, how they vote on issues and how you vote on issues that will affect them and their pockets, etc. Managing agents, if not good, can also be a source of problems, we have that issue also. Good Luck.

It is my opinion (and don't we all have one) that the only way your Coop/Condo etc can be a success is if all are on board for the betterment of the property and do not have their own agenda. (Board,agent,super,staff etc working together)
Amen, Bob

You are correct, that's the only way to make it work it just doesn't happen that way. People, including Management, have their own agenda most of the time.

Start the Email trail,,, the Sponsor, ManCo and lawyers really take notice when things are in writing. Keep it business-like, nothing persoal and simple, dont accuse anyone of anything. Ask questions in your Emails: IE: Isnt it against the ByLaws to .......? Is ... a good thing for the S/H and fiscally sound?

AND CC everybody..Everybody. People trying to play-sneaky, dont like transparacy.

ALSO, we finally ralled the S/H when we pointed out that its thier Main that could go up, that its THEIR investment...This will take time, but once they see the trend, you will begin to see results.
VP

We were in the same boat
What we did was we hired an independent management company We hired Impact Real Estate Management One of the owners is an attorney. We legally we able to gain control from the sponser.