We cleared up the messes in our building with Shareholder EmaiPower. Communication with the other Shareholders is vital, and by starting to, in a businesslike manner, ask direct questions, to both the board and MangCo, in Email, (cc: those not on email with hard copies, will create an Email trail -- which -- if your MangCo or lawyer is smart -- they will recognize and you will give the power BACK to the Sh.

What do your bylaws say in regard to the children etc. In ours, the sponsor nor thier family is allowed to live in the apartment. But, for SH, their children, parents and siblings may live in the apartment.

It takes courage -- but if you start to keep everyone informed, document everything and send out emials and hard copies to everybody -- you will get results. VP

actually i havent found any by laws, i have the proprietary lease and house rules, but i looked and never saw any bylaws.

In many of the co-op articles i have read, there was a nys court ruling that upheld the wording of the proprietary lease concerning the occupancy of shareholder apartments, specifically paragraph 14 of my proprietary lease states that the shareholder "AND" etc,
It doesn not say "OR"
The key word being AND.
i have read on quite a few NY co-op discussions that Boards have been successful in evicting family members that were living in the apartments without the shareholders due to the proprietary lease.
If i was buying an apartment here today, i would be thinking fraud, if i was told the building was 80 percent owner occupied.

in one case the occupant is a real problem , the non-shareholder occupant has caused extensive noise/ water flooding/ physical harassment for over 5 years for the downstairs shareholder. The board and management company refuse to do anything, i have heard them state at the annual meeting that it is this shareholders problem, not the buildings or co-ops
My take, is the occupant should never have been allowed to move in, It was known at the beginning that he was not the person that went to the interview, it was his mother.
A new twist was added yesterday, I spoke to the shareholder, he said that the mother/shareholder is a friend of the board member that does the interviews. i do not doubt the claim that the mother is a friend.

thinking back, there were quite a few prospective buyers who the board turned down. However after one or two board turn-downs, the board allowed these people to buy, who were never planning on moving in, since their adult children moved in.
All violations of the proprietary lease, and really screwed the building up as far as owner involvement.
doesnt seem like they did their fiduciary duty to the building, they just self dealt themselves to the detriment of the building.

Check the proprietary lease for objectionable conduct and document all incidents. You may be able to terminate the lease.

Thank you. Very helpful. Yes, I had forgotten, our prop lease does contain a clause about objectionable conduct:
Lessee’s Objectionable Conduct
If at any time the Lessor shall determine, upon the affirmative vote of two-thirds of its then Board of Directors, at a meeting duly called for that purpose, that because of objectionable conduct on the part of the Lessee, or of a person dwelling or visiting in the apartment, repeated after written notice from Lessor, the tenancy of the Lessee is undesirable . . . Although I think it would be extraordinarily messy (and, I think, divisive and not good for the building) to try to terminate the lease, at least there is some language that addresses objectionable conduct and perhaps gives us a little more leverage to document instances of the SH’s erratic behavior.

Oh, I meant to add: I think it would be great if we could terminate the lease. I just don’t think it would fly. It’s difficult enough to get people to join forces to call the SH out on his aggressive behavior.

But, if we have language in the prop lease that gives us a little leverage to at least document such instances — which really seem to be part of a pattern, not isolated — and could perhaps have the management company address the incidents in writing, that might be enough of a deterrent to curb the behavior. Knock on wood.

Our building just went through a similar problem: be aware it is very costly in legal fees to vote someone off the island. We received a legal bill equal to the mortgage of our building. All the articles about Pullman succeeding and finding the right wording in your PROP lease, who is right or wrong, does not seem to matter in the end. It sill costs a lot of money, depending on how unreasonable the offending party is and how much money they have to fight back. Good luck.

I completely agree with you, Newbie; see my response just above yours.

That’s why I think some sort of social pressure could be so effective. Continuing to ignore the behavior or sweep it under the rug sends the wrong message. It reinforces the behavior and in fact makes us complicit in it. Most people in the building dislike or fear this guy but he has a core of three or four loyalists who enable him. If one of these otherwise intelligent people were finally to step forward and call him out and/or if the management company were to send him a letter, that could perhaps be effective in curbing the behavior. Absent that, I think he will simply continue to operate according to his own rules. Worst case scenario, things could escalate.

On the one hand I want to say that he can’t control his behavior. On the other, though, he seems to act one way in a one-on-one situation, and a different way when more than one other person is present. That suggests that he has some idea of what most people consider right vs. wrong and is at least somewhat capable of modulating his behavior. He still acts erratic in the presence of several people, but there doesn’t seem to be any threatening language or intimidating behavior in those cases. Which is perhaps why most people tend to characterize him as merely “abrasive”. He’s far beyond abrasive, alas.

As this chain has progressed it sounds more and more that this is a problem requiring a political/social solution rather than a legal one. It does not sound like there are grounds for a termination, even if you have the funds and the stomach for the battle. That being said, I don't think that inappropriate behavior should be tolerated and it should be documented in a letter to the offender. Keep in mind that the victims of his abuse may not feel comfortable with being named but they should be encouraged to go on record.

We have had similar instances with threats between shareholders that even had witnesses. We presented our attorney with the information who strongly recommended that the victim file a police report. Unless the victim of the abuse is willing to file a complaint you are limited in what you can do. I personally do not believe in making empty and idle threats, so once again documentation is critical. When I reach the point of making a threat, I have every intention of following through with it unless the behavior changes. Otherwise they quickly learn that there are no consequences to their abuse and there are no reasons to stop.

It's important to bear in mind that all the documentation in the world and witnesses may not help circumvent a horrendous legal and psychological nightmare that can go on for years in your co-op. You may not end up recouping your legal costs either, because sometimes you don't get to go to court and get the unit back sans the offensive shareholder. There could be a settlement that is not enough to cover your legal costs. I'd be curious to hear any other Board Talk experience involving terminating a lease and if they in fact covered their expenses. I'm not saying that nothing should be done about the offending SH, but it's not a clear cut path from the first OB letter to a Pullman eviction and your co-op may be in for a costly surprise.

Yes, West Cty Board Member is correct - most leases have a clause citing "Objectionable Conduct" which outlines what actions the board and the shareholders may take. What constitutes "Objectionable Conduct" is not specifically defined so it is critical that you document everything and provide copies to your attorney. If you have witnesses to the behavior, have them provide a written account. I do not know what type of behavior this shareholder is engaged in; however if you feel threatened, file a police report.

This type of behavior occurs more frequently than you may realize and there is no quick solution, but carefully building a case through documentation is critical. Of course if the board is unwilling to take any action, that makes it more difficult but an email, whether they like it or not, IS a record. Why is your board afraid to stand up to this particular shareholder?

Thanks so much for your response, Prez.

Why are most board members afraid to stand up to this particular SH? Wish I knew. He was the board president for a few years a while back and still seems to believe he has some position of authority or even ownership over the building. He has a very paternalistic demeanor which rubs most people the wrong way but perhaps appeals to those who have father-figure issues or who are exceptionally insecure and vulnerable to that sort of thing. Also, heaven help us, he is on the community board, so perhaps people tend to view him as being particularly plugged into the local power structure, or as having some influence.

And I think most people, myself included, simply want to lead quiet lives and are reluctant to get drawn into the firestorms that often seem to surround this guy.

The current situation is quite complicated. The resident who tried to alert one board member via email that she had had what she called a “frightening” encounter with our former board president is actually a sublessee, not a shareholder. From what I am able to determine, the incident appears to have been retaliatory: the sublessee told several people in the building, and also the former management company and the realtor handling her lease, that she had been told by former board president that the co-op’s sublet policy did not apply to her situation, that the shareholder who owns the apartment had effectively been grandfathered in because he already had an agreement in place when the new policy was introduced. Although it wasn’t particularly controversial at the time, for various reasons too complicated to go into, this has suddenly become controversial. The former board president now denies having said this and, by all accounts, is quite upset that the sublessee relayed her understanding of the situation to others.

Allegedly, the former board president cornered the sublessee a couple of weeks ago in the building vestibule, blocking her from exiting the building. He allegedly raged at her and said that she had caused him great harm and had made him “look bad” by telling others that they had had this conversation. After she started crying, he then supposedly told her: “Look, it’s not you that the board is after, it’s the owner of the apartment. You and your daughter are just caught in the crosshairs.” She said that, given the context, she found this metaphor very upsetting and communicated to the SH that she wanted to exit the building.

Because she is a sublessee and not a shareholder, she didn’t know whom to turn to about this and was afraid that reporting it could further jeopardize her situation in the building. Admittedly if I were in her position I wouldn’t know what recourse I had, if any. I suppose she could go to the police, but let me tell you: in an atmosphere of drug dealing, violent muggings and illegal gun sales, I dare say the police have bigger fish to fry.

A fellow board officer was quite emphatic that unless the SH pointed a gun at the sublessee, we shouldn’t follow up on the sublessee’s mention of an incident. This colleague also accused me of having an agenda because I recommended that the board at least make some sort of notation of the reported incident. As a shareholder myself and as someone who has a financial stake in this co-op, I am appalled to hear about such things going on in the building and find it, if true, unacceptable. Note that I am careful to say “if true”. But because I and others have been on the receiving end of this guy’s attempts to intimidate and bully, I can’t help but lean toward believing that what the sublessee reported is, indeed, true.

If objecting to this sort of behavior in our co-op and wanting to at least document it means that I have an agenda, well…

The Pullman decision rears its head yet again. Yes, it's true that you can terminate a shareholder's lease and shares for objectionable conduct if your Proprietary Lease permits it. Sometimes a shareholder vote is required (the Pullman and Lapidus cases); sometimes a board vote alone is sufficient (the Michael Davis case and your own situation, to judge from the lease excerpt you quoted).

The good news is that you will ultimately recoup your legal fees once the objectionable shareholder is ejected and the apartment sold. The bad news is ... well, practically everything else. By all accounts, it's a long, horrible process that can drag on for years. You never EVER want to do this if you have any alternative. And you don't want your building to become known as a place that kicks out people unless you have a really good reason.

The critical issue if you're even vaguely considering a Pullman-style eviction is documentation. And more documentation. You can't have enough. The Michael Davis board-only eviction was upheld largely because the documentation was both compelling and voluminous. The board had tried for years to work with Davis, documenting every step meticulously. They finally gave up and booted him out.

If your board wants to sweep this under the rug and refuses to document anything officially, you might start doing it yourself, as you've already done with your iPhone. You might also talk to both your board and your attorney about the consequences of deliberately concealing a known problem. I'm not a lawyer, but it seems like the board could be in a lot of trouble if this aggressive shareholder ends up hurting someone and the board was aware of the issue but tried to hide it.

As I’ve said a couple times now, I would never try to head down the Pullman path. Quixotic, too expensive, too divisive.
. . . it seems like the board could be in a lot of trouble if this aggressive shareholder ends up hurting someone and the board was aware of the issue but tried to hide it.
Agree; this is a real concern and this is why I recommended that the board at least make a notation that a building resident had alerted a board member to a potential (alleged?) problem. Just a little note, with a date, nothing more, in case another event occurs in the future.

We just passed a House Rule that there can only be three pets to an apartment. In our research we discovered that there are NYState laws protecting pet owners who had pets before rules were passed. They are automatically granfathered in...
HOWEVER
also in this law, if anyone has a NEW pet for more than three (or six, I cant remember) months -- and no one complains, it is automatically granfathered in. This is all on the NYState DOB site... This law was passed due to landlords harrassing tenets (usually elderly) who would rather move than part with their pets. As uncomfortable as it is, if you feel strongly about this issue and your neighbor gets a new pet -- you have to turn him/her in. (I own three pets) PS: Pets make happier neighbors: VP

I say sensitive to act, because kids at some point in their growing years will pester their parents for a dog.

As you stated you have dog policies but do/will not enforce them, here lies your problem. You either address the issue or forget it. In my Coop we have so called "house rules" but they mean nothing as when it comes to enforcing them our board are toothless.

Best of luck,

Bob

We have had a flip tax in place for the past 18 years and it has paid for virtually all of our capital improvements over the years so I am a great believer. Since every share must be treated equally, ours is based on dollars per share which I think is the fairest way to implement it.

The only sales that I would grandfather are those that are already in the pipeline when the the flip tax is proposed; however you could consider making the effective date far enough out that anyone wanting to sell just to avoid it could do so.

Your right a housing investment is major decision of time, money and effort. When one chooses to purchase shares in the cooperative, they agree and accept the proprietary lease, house laws, and by-laws that govern shareholders and the corporation. At the time of purchase, a shareholder accepts the theoretical and applicable differences between owning property in a house, condominium property and shares of a cooperative.
Under NY State Business Rules, Board of directors is granted wide ranging powers to govern the corporation – focusing on equitable treatment of shareholders. Policy and governing document updates are controversial.
This year we updated our sublet policy as well - to include a time limit and fee; it was a change that had not been made since the 90’s. We didn’t grandfather anyone; rather we allowed a phase out over two years until the new rules were implemented for those with current sublets, meaning they received 2 years + the time limit. I want to avoid hypotheticals, to stay focused.
We made the policy change consistent with our governing documents. Our bylaws Article I states – the primary purposes of the corporation is to provide residences for shareholders who shall be entitled solely by reason of their ownership of shares to proprietary leases … We wanted to meet this standard, while allowing some flexibility by allowing more time, but not grandfathering. We wanted to set a new policy that would be consistently followed, allow all shareholders the same opportunity and terms for subletting, and to minimize legal and financial issues for the corporation as a whole.
On Grandfathering – it’s a difficult proposition. Board’s change, managing agents change, requirements change. As a board member, a goal we strive for that treats shareholders equitably is consistency in polices. Think of all the policy’s in effect in a co-op, from the move in/move out, - Parking – laundry room – sublet and pets, etc… If these policies are updated and grandfathering occurs for each policy – managing the corporation (which the board was elected to do) becomes considerably more difficult and time consuming.
Those not happy about the decision, should reach out to the board/managing agent and see if they will meet with you to discuss your concerns (no guarantee), sometimes there are factors behind a policy change which are not communicated clearly if at all. (If you want specifics let me know)

I fully agree with this person on this bad clause being abuse by certain dictator who sat on coop for years claiming granfather clause as if they are entitled to privilege exclusively for them. for example at Sherwood Village B the coop Secretary established her own rules by unilaterally increases the amount of money ppaid when a shareholder is moving out but will exempt her when she decided to sell herself once I find out I told every shareholder who is concern to do the same that she did so we all can fall into the same category put up a sale disclosure even though we are not selling so we can get on the grandfather rule she has created to exploit our coop.Today because of all her bad rules for the past twenty years our coop is in the worst condition financially.She had a member of the Board who was selling her shares sitting on the Board interview of the new prospective tenant while discussing issues pertinent to the sale, because she uses these people as monkey to make them believe that they are part of her bad process while she is defrauding our coop.The same secretary has been on our coop Board for over twenty years and she refused to step down so the coop can grow without her stupidty,we the shareholders received our tax paper this year with the statement stating mortgage interest we had no mortgage on the Coop we have a loan that the secreatry and her cohort took and are having problems with the bank to provide our financials statement,for 06 -07 which was done this year by another accountant without full knowledge of our funds just so to satisffy the Bank Almagated which has provided the loan and we all think these people should be in jail for falsifying our record to the satisfaction of the bank.In 2010 we have just received the financials for the year 2006 2007 The coop board in my building together with the management of it make Bernie madoff look like a small ponzi schemer even though he was the biggest shark around.The politician need to help the shareholders and stop their nonsense of referring decent citizen who vote for them and work hard to pay their bills and their taxes to the New-York State Attorney general office who is much busy trying to go after Wall Street when these Board of directors in NY Coop are conducting themselve like a group of third world dictactor like The Chavez Of Venezuela. The Politician need to get involved and have these corrupt board and management company prosecuted to the full extent of the law People invest in a coop if it is good for Cooper Town and stuy it is good for all New-York housing sector of New-York City and Queens in particular have the most coop concentrated in the five boro.Even the Boro President is mute on our issue of corrupt Board members her office was notified the DA office was notified the AG office was notified habitat for all their writing about Coop were notified and what happen if you are a liar and a deceiver you get away practically free yet we all talk about honesty and it seems to me honesty is about self.

Grandfathering usually applies only to stuff that's already in place at the time the new policy is passed. If you decide to prohibit wet-over-dry renovations, pre-existing installations are grandfathered in. If you want to ban pets, you can't force people to get rid of pets they already own, but you can stop them from getting new ones. If subletting is no longer permitted, current subletters may remain until the end of their subleases, but no longer. An amorphous desire to sublet at some time in the future wouldn't be grandfathered, even to people who bought their apartments with sublet possibilities in mind.

It's a fundamental principle of co-ops that House Rules are subject to change at any time, and the Proprietary Lease may be amended by a supermajority vote of the shareholders. Everyone who buys into a co-op agrees to these terms as a condition of purchase. Policies change -- sometimes for the worse -- but as long as these policies are administered even-handedly, shareholders are bound to obey them.

(I can't help but think of people who moved to the United States around 1900, enthusiastically noting that income taxes were prohibited by the U.S. Constitution....)

It's a fundamental principle of co-ops that House Rules are subject to change at any time, and the Proprietary Lease may be amended by a supermajority vote of the shareholders. Everyone who buys into a co-op agrees to these terms as a condition of purchase. Policies change -- sometimes for the worse -- but as long as these policies are administered even-handedly, shareholders are bound to obey them.
Great way to explain it. Thank you.

Inasmuch as possible, document all instances of egregious behavior.

It is not in the shareholders’ best interest for one person to be making all of the decisions.

Carry out as much board business as possible via email. It is efficient, allows one person to communicate with several people at once, and leaves a timestamped record that can be referred to long after the fact in case of any confusion or divergence of personal recollection.

Those who are above-board and transparent in their dealings have absolutely no problem with documentation.

Insistence on purely verbal communication, ex parte private discussions, resistance to documentation — these are red flags, usually indicators that all is not on the up and up.

Document, document, document.

We have similar problems - in our coop which is an original coop, our Occupancy Agreement stated that subletting is legal upon approval of the board; however many, many years ago at an Annual Meeting the now Secretary who was President stated that subletting is illegal and nothing could move her. Now the problem is and for a long long time is that we have so many renters without legal agreements, between the lessor, lessee and board that 1) when maintenance has not been paid for years and years, in one case because there is no legal owner and we have massive legal bills to try to recoup this amount,2) renters have garage spaces, exactly what rights to these renters have - we have no documents or rules to put this into effect which is harmful to the shareholders - so what does anyone suggest in this situation

If the sponsor sold to the apartment to an investor who has never lived in the unit, then the investor is a "Holder of Unsold Shares" and may sublet to anyone in the world until the end of time without board approval or sublet fees. Sorry about that.

We have problems keeping lifeguards and want to get rid of them completely. Is this a good idea?

It's my understanding that swimming in a ccop/condo pool is prohibited when a lifeguard isn't on duty. (City pools must have them.) Check your by-laws or ask your attorney. Even if not legally required to have one, you should. A key responsibility for a coop/condo is resident safety.

What if an adult is alone at the pool and has an accident, gets a cramp while swimming, etc.? Would you let young children or teenagers use the pool without a lifeguard on duty? I'd be very concerned about that, and I think your owners would be too.