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Sublet Policy - David Bryant Jun 10, 2007


I am a member of a newly elected coop board. Our previous board had no established policy on sublets. I have been tasked with finding out what a sensible policy on sublets is. We have several shareholders who have been subletting their apartments for years and resident shareholders are now complaining to have this changed. Any advice?

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Subletting and renting rules must be in your bylaws if you wish to enforce any prohibition.

Our co-op has a rule that there are absolutely no sublets.

You might be able to enforce something retroactively if your proprietary lease document stipulates that only those on a “proprietary lease / stock certificate” may live in the unit.

= = = = = = = = = =

We are now in the throes of converting our 500 unit coop to condo. (As I have previously noted in other postings, we do not have any underlying mortgage so our path is significantly less onerous than the path faced by others coops. Likewise, we have not shirked our responsibility to fund capital improvements.)

We have learned in NJ as a condo association, we must allow rentals, but we can impose restrictions. By the way, this requirement to allow rentals is not a legal requirement in Florida. States differ.

Our planned restrictions will include:
1. One must be an owner for two years before one can rent. This avoids buying for investment purposes to rent only.
2. There will be a minimum of two years on a rental. This avoids transient populations.
3. The condo owner must pay a fee to the condo association up front. This avoids, “oops”, they skipped and we want to rent again.
4. There will be a limit of 20% as to the number of units that can be on rental at any one time. This avoids becoming a predominantly rental property. Conversely, this still maintains an 80% owner / resident population. Of note is that until five years ago, the sponsor owned about 20% of the units and thus we did have a rental population with no adverse affects, as the sponsor screened all rentals. The sponsor slowly divested its units over the past five years.

= = = = = = = = = =

Separately, I have researched the question of rentals, and I have found that there are additional impositions that can be enforced:
1. There can be a limit as to the dollar amount for which a unit can be rented.
2. A surcharge can be imposed, if an owner wishes to exceed the 20% limit.

At this time, we are reviewing changes to our coop bylaws that will be carried into the condo association bylaws. So, all the above is under consideration.


= = = = = = = = = =
Are there any other thoughts for the originator of the question or to our conversion plans narrated above?

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> Join the conversation Comments (1)


Who are the firms that can convert a co-op property?


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.

In turn we are employing the services of a firm that has a long history of coop and condo sponsorship.

Note we are unique as our coop does not have any underlying mortgage and we have not shirked our responsibilities in funding capital improvements.

The firm we are employing is:
Arilex Realty Corp
1000 Portside Dr
Edgewater, NJ 07020
(201) 943-6030

If you elect to call Arilex, ask for Jimmy D. and indicate to the staff that Ted made the referral. I spoke to Jimmy this evening and indicated that I would be posting his firm’s name.

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We are very interested in talking to you regarding your conversion to condo. Could you give me a call?
212-505-2030 ext. 3007.

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XXXXXX CORP.
XXXXXXXXX AVE, NEW YORK XXXX

POLICY FOR SUBLEASING

1. Definitions. The following terms shall have the meanings respectively ascribed to them:
(a) Applicant refers to a person who proposes to sublease an apartment in the building owned by the Corporation from a Shareholder.
(b) Board means the board of directors of the Corporation.
(c) Corporation means XXXXXX Avenue Corp.
(d) Effective Date means June 26, 2003.
(e) Proprietary Lease refers to the proprietary lease between the Corporation and the Shareholders.
(f) Shareholder refers to a Shareholder of the Corporation.
2. Coverage of this Policy and Requirement for Board Approval. No sublease shall take effect or be valid without compliance with the sublet policy set forth herein, nor shall any sublease be valid until approved in writing by the Board as provided in the Proprietary Lease. This sublet policy shall become effective on the Effective Date with respect to subleases entered into on or after the Effective Date. This sublet policy shall not apply to any sublease duly approved by the Board which commenced prior to the Effective Date, but it shall be effective with respect to: (i) any extended or renewal term thereof commencing on or after the Effective Date; and (ii) any sublease which commenced prior to the Effective Date and which was not been duly approved by the Board prior to the Effective Date. The term “Subletting” shall include the occupancy of an apartment by any person not authorized to occupy the apartment by the provisions of the Proprietary Lease, whether or not any rent is paid by such occupant.
3. General Criteria For Subletting. The following provisions shall apply to all apartments other than those owned by holders of unsold shares:
(a) No more than thirteen percent (13%) of apartments owned by Shareholders, excluding apartment(s) owned by a holder of unsold shares, may be sublet at any given time (“sublet quota”).
(b) No Shareholder shall be permitted to sublet the whole or any part of his/her apartment until he/she shall have owned his/her shares in the Corporation for a period of not less than two (2) years prior to the commencement date of the sublease term. This requirement may be waived by the Board, provided such waiver is in writing.
(c) Except for apartment(s) owned by a holder of unsold shares, no apartment may be sublet for a period or periods exceeding two (2) years out of any five (5) year period. This limitation may be waived by the Board, provided such waiver is in writing.
(d) No Shareholder may sublet more than one apartment during any given one year period.
(e) Upon receipt of a completed sublease application, the Shareholder's request will be placed on a list and reviewed by the Board. Generally, Board consideration of sublet applications will be on a first-come-first-serve basis, subject to the sublet quota. If more than one Shareholder seeks approval to sublet his or her apartment, the Board may, in its discretion, give preference to a Shareholder who has historically sublet his/her apartment less frequently than others, but nothing in this Sublet Policy is intended to diminish or restrict the Board’s discretion with regard to the granting or withholding of consent, for any reason or no reason, or to impose such conditions as the Board deems appropriate in connection with the granting of any consent.
(f) No sublease application shall be considered by the Board in the event that the Shareholder is then in default of his/her Proprietary Lease, including without limitation breach of the house rules, failure to pay any maintenance fees, assessments, garage parking fees, repair fees, or any other outstanding fee or charge due.
(g) The term of each sublease shall not exceed one (1) year, unless extended with written approval by the Board. In addition, each sublease agreement must begin on the first day of a calendar month.
(h) Any proposed sublease must specifically state that it is subject to all of the terms and conditions of the Proprietary Lease and that it is subordinate to the Proprietary Lease. A breach of the house rules by a subtenant shall also be deemed a breach of the Shareholder’s Proprietary Lease.
(i) Each Shareholder subletting an apartment shall maintain a comprehensive homeowners type policy with an A rated insurance company, including (i) coverage of at least 80% of replacement value of the interior portions of the premises for which the Shareholder is responsible to maintain and repair under his/her Proprietary Lease, including the Shareholder’s improvements, fixtures, wall coverings, floor coverings, the finished surfaces of all floors, and all other of Shareholder’s improvements and installations, (ii) personal property contents insurance to cover contents contained within the apartment, (iii) other provisions that the Board may require, and (iv) liability insurance in an initial amount of not less than $100,000 (the "minimum amount"), provided that in their sole discretion, the Directors may, by resolution, increase the minimum amount of such liability insurance from time to time.

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4. Application Procedures.
(a) Four (4) sets of a duly completed application to sublease must be delivered to the Board in care of the Corporation’s managing agent at least thirty (30) days prior to the first day of the month that the sublease term (or renewal or extended term, as the case may be) is to take effect.
(b) An application to sublease an apartment, or to extend or renew an existing sublease must contain the following:
i. A properly completed and signed application form;
ii. Permission to check the Applicant’s credit history;
iii. Copies of the Applicant’s State and Federal Income Tax Returns, and W2 forms for the two most recent years;
iv. Verification of the Applicant’s current employment stating position, length of employment, and salary;
v. Verification of Applicant’s current residence, including a copy of two months’ insurance bills, utility bills or credit card bills;
vi. Copy of three months’ most recent banking and brokerage accounts, together with a letter from each institution indicating types of accounts and the date(s) the accounts were opened;
vii. One business reference letters;
viii. Two personal reference letters;
ix. One letter of reference from Applicant’s current or most recent landlord (or its managing agent) stating length of residence and payment history together with rent receipts, cancelled checks/money orders on account of rent for the most recent twelve (12) month period;
x. The written consent of the Shareholder’s lending institution (if any) to the proposed sublease; and
xi. The fully executed counterpart original standard sublease agreement.
(c) Falsification or omission of information may result in the denial of the sublease application by the Board, and may also result in termination of the current sublease.
(d) All persons who will reside in the apartment with the Applicant must attend a Board interview. No person, other than those named in the Applicant’s application and the sublease, may occupy the sublet premises without prior written approval from the Board. Any such requests must be submitted to the Board in writing, along with a completed application form.
5. Fees.
(a) Each Shareholder to whom consent to sublease is granted must pay a sublet fee to the Corporation on the first day of each and every month of the sublease term, as follows:
i. 10% of the monthly maintenance for the first year or partial year of the sublease term, except as provided in (b) below; and
ii. 15% of the monthly maintenance for each additional year or partial year of any extended sublease term. For these purposes an “extended sublease term” shall include a sublease to a new sublessee if less than one year shall have elapsed since the expiration or termination of any prior sublease.
(b) The following fees must be paid to the Corporation at the time a sublease application is submitted:
i. A non-refundable $75 credit check fee;
ii. A refundable $500 moving deposit to cover possible damage to the building caused by the moving in or out of the subject apartment;
iii. A non-refundable $100 processing fee; and
iv. A non-refundable $250 interview fee.
(c) The following fees must be paid to the Corporation at the time an application to renew or extend an existing sublease application is submitted:
i. A non-refundable $100 processing fee; and
ii. A non-refundable $150 interview fee.

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We for the most part do not allow sub-let.

It is nothing but trouble. In fact if you have to many your insurance rate will go up.

Best bet for the bldg. unless absolutly necessary don't allow it.

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Thanks for your informative response,,, One more question... Is there a restriction on how many times an apartment can be sublet?

A number of years ago the Board relaxed the rules, and some of the absentee owners run B&B in our building. We now have board members who are intrested in changing the house rules.

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Habitatmag.com article archives has a treasure trove of info. Search the phrase Sublet Policies and sort by "Relevance". Good luck.

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Toxic Odors From Neighbor Building - BN Jun 09, 2007


Is it normal to be able to smell paint and other chemicals through the party walls between two buildings? Last January, the brownstone to our east had a sewer line pipe break in the basement and it flooded their basement and first floor. The smell was terrible and migrated into the halls of our building and into some of our shareholder's apts all the way up to the sixth floor. For the past six months we have endured a barrage of smells from mold killing chemicals are worried about the fact that this is even happening. How can we ensure no damage has been done to our wall in the course of their repairing their problem and what course of action should we take? We can't even find the address of the owner listed on the NYC DOB site. Thanks.

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Apparently you need an engineering company if you're looking for structural damages due to water penetration or other issues.

AdC

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There are lots of other ways to obtain the owners information. AdC is right in that you should have a professional look at the possible damage and access it.
Feel free to email me (ar0777@aol.com) your info and I will help you obtain the info you want. make surte you put habitat in the subject.

~AR

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West. Cty Management - John in Westchester Jun 08, 2007


Is there a firm in West. Cty someone can recommend for property management other than garthchester, barhite, maxx or hudson north that is worth their fee

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We use Stillman Management in Mamaroneck and are very happy.

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What are their fees per unit and what do they give you v. expectations for the fee to know what to recommend? After all, 99% of their contracts are just boilerplate. I don't mean to sound insulting, but I found out that I cannot expect top shelf when I only pay for less than french fries. The other day, it was quoted $2.00 a day per unit. In doing my math, I thought I was only paying 1/3 of that, but as I mention to the board if the $2.00 a day gets what I put in, it's worth it all the way!

AdC

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Duly Noted. In trying to gauge cost vs. quality, one would need to know who to call and then determine if they are worth their salt (to put on those fries) I am tired of having to choose from the same old companies time and time again.

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Perhaps it's a matter of talking to the president or owner of the company and request to have a managing agent PT dedicated to your building and find out how much they charge for the service. Unless the person is there in your building to take care of requests and supervise workers, etc., the type of service you may get may be shared.


I think we are kicking in Westchester the same, old bucket but in many instances it boils down to costs and what you will be willing to pay for the service. IN fact, you mentioned Bartheit. Many people think they are wonderful.
Others think that Stillman is okay and others above the cut. So what makes the discrepancy of opinion???

I think what we think we want to eath and what we get for dinner must influence how well we perceive the eating experience.

AdC
AdC

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Excellent points AdC.
Unfortunately I do not know anyone in that area and we are not fully launched yet. However please note:

Ensure your expectations are crystal clear before you even shop. Know what you expect from the management company, then lay it out... "I want X Y Z... from you, can you provide this in the manner we need?" if so, have it put into the contract. you do not have to accept the boiler plate contract you are given. You may now pay a little more, but you are contracted to recieve what you want and need. Do interview the agent (there are other posts on that), because (in keeping with AdC's analagy), we can go even to the best resteraunt in town, pay top dollar, but if the service stinks, we dont go back. AGAIN.. make your expectations clear.

~AR

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Sequoia Property in Mount Kisco

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WRG Management
420 Westchester Avenue
Port Chester, NY 10573
Tel: 914.939.9100
Contact Carol Benedict at cbenedict@wrg.com or visit their Web site at http://www.wrg.com

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Didn't WRG merge with Stillman a few years ago?

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WRG sold to Stillman approximately 6-1 year ago and they are no longer in Port Chester.

AdC

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I use to reside in a complex in Tarrytown until 2005, it was self managed when I left to move closer to family in California. They had several managers come and go over the past 30 years and finally they decided to hire the assistant manager as the property manager who worked with them for over 12 years. I tell you the place never looked better! Sales increased because the property was finally being managed the right way! As a homeowner who was the biggest complainer, I found myself making less calls and finally taking a deep breath that the property I am living in is finally being taken cared of. Well, the Board changed over the years and they hired a new homeowners association president who wanted to make changes she felt would matter. With a lot of hard work the President finally forced the manager out of a job doing all she can to get the board to rule in her favor. I now hear this board member served on other boards in Westchester and did the same thing and was finally forced to step down after other members saw what was going on. You can hire a contractor and check references, but when someone goes on the Board to monitor our investment, do they check out their background as well? I still keep in touch with some of my friends who informed me that the property is now being managed by a company and is going down hill. They have one placed their homes on the market. Some residents are getting together with the board to ask for this individual to step down. It goes to show you that the better your property is managed, the better it looks the better it sells. It only takes that one board member who looks out for their own interest not the residents. I do have to give it to the ones who take their jobs seriously they are the true volunteers who take their position on the board serious and it takes a lot of work and time. I applaud those members!

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huge savings on water - sally Jun 07, 2007


EVERYONE -

1) make sure to have your water bill carefully checked! We just got back, yes, $25,000. (the guy hired to review the bills got to keep 10% as payment)

2) also we had a plumber fix every single leak inthe building and review all plumbing in each apt and our bill went down dramatically!

3) if you have a commercial tenant, they should pay their own water bill. OUrs was using our water and we worked out a payment deal for past costs when we found out.

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Sally is right. Let me add one more suggestion:

4) If the water bill is currently "estimating" your building's water usage, buy a water meter. We did this and saved about 30% on our water bill. (The city was estimating greater water consumption than was accurate.)

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Sally, is the person you hired to review your water bills available for hire? If so, could you provide his info? Just curious, how many units is your building?
Thanks.

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Objectionable Behavior from a New Board Member - Board Newbie Jun 06, 2007


Any ideas on how to address a chronic objectionable behavior issue with someone who got himself elected to the new Board due to the large amount of shares assigned to his unit? The outgoing Board was ready to send an attoney's letter to the person about smoke and noise coming from his apt and decided to wait until the new elections. Now we have the problem shareholder on the Board. We have a majority within the Board who want to resolve this problem, however. The Shareholder has refused for years, to take adequate measures to soundproof and stop migrating smoke which fills the lobby and penetrates other apts. We have never tried legal avenues before. Should we speak to the Board member first or send a letter? Can he even be on the Board if he is in violation of the house rules? Help! Thanks, BT

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That's going to be a tricky situation, BT.

I suggest speaking with your corporate counsel first. You need to know where you stand before asking the guy to do something.

Find out what he can be asked to do, in what time frame, etc., under your propreitary lease and the law. (There's plenty of case law on smokers -- do you read The Times's Real Estate section?)

Then ask the person nicely, not at a board meeting. Presumably that won't work, so it should next be brought up at a board meeting so the smoker can see that it's all of you vs. him (have with you copies of letters complaining about him) . If that doesn't work, you'll have to have a letter sent. Remember, the lawyer works for the board president (so I hope the smoker isn't the pres!), not individual members of the board, so the smoker can't have the lawyer fire back.

Is this person an officer too (secretary, treasurer or vice president)? Our by-laws allow the board to strip an officer of his/her office by majority vote. NOTE: This is NOT stripping him/her of membership on the board; that probably requires a votes of the shareholders. But it's something you can do to send a message that his behavior is not proper.

I'm curious to see what other suggest ... they are probably better ideas out there.

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Please explain "lawyer works for the board president". Does not the lawyer work for the entire board of directors?

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That's a good question. Let me preface this by pointing out that I am not a lawyer, just a board member who works with one. So before you make any decision, consult your lawyer first.

Here's what I mean. Our board recently needed to hire a new corporate counsel (our previous one raised his rates too high for us). We interviewed several lawyers. One of the questions we asked was, "What is one of the biggest mistakes boards make?" One of the replies was "infighting."

The lawyer went on to say that in a case where the board doesn't agree on an issue that involves the lawyer, the lawyer has to follow the president's instructions.

So even if the board wants to do X, and the president tells the lawyer to do Y, the lawyer has to do the latter. (Doing so, of course, sets up the board president for a coup.)

Again, I'm not a lawyer, so don't take this as case law. In the example of the original question, I was pointing out that if the smoker is the board president, the board as a whole may be limited in its legal options -- because the board president could block them. Which would be an abrogation of his/her fiduciary duty, but if the person is addicted to nicotine, he/she may not see things clearly.

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Thanks for all the feedback. We have 2 co-presidents (it is a really small building with lots of problems so they are splitting it). The problem person is secretary. We are not really talking about cigarette smoke, though there are small smaller issues with that within the building. It is pot smoke. Just to re-cap, management sent a letter last year whereupon the behavior got better but it always reverts. A shareholder spoke to him directly about the smoke and was sent a note apologizing saying a new air filter was bought. While that has lessened the odor for now, it will come back. The bass noise is always audible in the lobby and halls and travels through the floors and walls into the shareholders units above. He is only on the Board to protect himself, and probably assumes we will be in this confused position about how to deal with it.

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If the offending shareholder is a heavy pot smoker, why wasn't the illegality of this used as leverage to get him to be more compliant? Couldn't this be used now?

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I generally agree with AdC and Steve with an exception - that if the board wants to do X and the president wants to do Y, the coop's lawyer has to do what the president wants.

The lawyer doesn't work for the board, the president, any one board member, any shareholders or management. He works for the coop - the apartment corporation. He is not duty bound to do what the president wants. His job is to work in the best interests of the coop as a whole. If he believes that what the president wants doesn't accomplish that, he isn't duty bound to comply, and he can't just do what he wants either.

Much of a lawyer's job is advisory. If a board disagrees on what to do in a particular case, he should advise them as to what's legal, proper and best for the coop. He shouldn't just do what anyone wants. If a board (including president) can't agree on something that will be in the coop's best interests, he shouldn't do anything until they can agree on this. Some lawyers may not follow this precept but this is what they should do.

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For your info, as a board president, if I have a disagreement with the board, i.e., I think one way and the majority another, I ask the attorney to speak with the board (all members) and go over the situation. Everyone gets the education and the benefit of the doubt.

But it's not me and my lawyer. As you well stated, it is the co-op legal counsel. The day I want to pay for my personal advice, I will count my pennies and open my pocket.

AdC

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Glad you agree, AdC. A coop attorney works for the coop. We had a Sh who wanted to sue two board members. He claimed they OK'd a new coop fee that he couldn't afford to pay and they knew he had financial problems because he told them so in private as "friends". Our attorney said he couldn't address issues for individual board members and they'd have to get their own attorneys to handle it. (The Sh eventually dropped the whole thing.)

A friend who's on a board in another coop had problems with three Shs who openly told lies about him to get themselves elected. He wanted to sue and asked his coop's attorney for help, but the attorney said no because he only works for the coop. (He got his own attorney and sued the three Shs for liable. A few Shs appeared in court for him to attest that they were told the lies, that were easily disproved, and the three Shs had to pay a hefty financial penalty.

A coop attorney works for the coop, plain and simple.

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In my case as a board member I have written correspondence to the lawyer asking for explanation of board presidents "law expertise" & it has been over two months & no response from lawyer. I guess our coop lawyer does not know that he works for the entire board of directors and the shareholders as a whole.

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Obviously, you did not read my paragraph from my original posting. This is the answer you are looking for. I have corrected some mistakes in quoting:

"Over the years, what I have objected from some ignorant (not to call them ILL-INTENDED board members) is their calls to the co-op counsel, insurance brokers or other professionals to consult [their] the particular board member's own point of view or TO raise issues that reflect their own point of view WITHOUT BEING DELEGATED BY THE BOARD TO DO SO. This is AS IMPRUDENT AS the PRESIDENT acting on his/her own. Unless a board member is empowered by the board to do the contacts and report back, individual actions send the signal of a weak, divided board or the wrong decision. Thus, to act as a board, all participate, all volunteer, all work in the measure of their talents and all live by the decisions of the majority; the minutes will reflect the desenting vote."

NOW, if you find that certain opinions of the president regarding legality are wrong, you challenge it in front of the other board members and request that the "legal opinion" be clarified with the co-op attorney. If you find the other board members to go with you, no big deal for the president to say, OKAY, let's consulted. WHO VOLUNTEERS to do the calling and report back to the board? Otherwise, to send an e-mail to the co-op counsel with the question with copy to all board members will do. If you have no e-mail, then the person who does have one will make copies of the co-op counsel's asnwer and distribute.

The case is closed!


AdC

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I don't think that the lawyer only represents the President by law - according to New York State Law - It is the board, not an individual that makes policy - which makes sense because then why would you need 9 people and a vote - Our lawyer says he represents the board - however that is not true

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Actually, this isn't correct.

The co-op's legal representative works for the entire Board. Generally, the Board will interact with the lawyer only through one person, in order to avoid confusion (and keep the bills low) -- but, for example, if the president and Board are at odds, and the president is in the minority, the legal agent must represent the majority's decision, not that of the president alone.

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First, the president is the speaker of the board, but has no other power than being the speaker and sign contracts on behalf of the board. Of course, the president is expected to lead, to provide vision and to PERSUADE. The president cannot make decisions on his/her own that amounts to tons of money, although in emergency situations and run of the mill issues, he/she will be approving routine work.

One thing I learned from our counsel is as follows: "The Board serves at the pleasure of the shareholders; the directors including the president serve at the pleasure of the board." In other words, a president gets the vote of confidence from the board and his/her function is to serve the board.

A president shows his/her ignorance by taking major responsibility on his/her shoulder on behalf of the board. A president must learn the VIRTUE of PRUDENCE. When big money is involved, and actions may be questioned, a president should use his/her INTELLIGENCE AND PRUDENCE to pause and read the above definition. THEREFORE, those who advocate for e-mails, telephone calls, etc. will find fertile ground here: the PRESIDENT will not only CONSULT via these methods of communications what board member think, but will call for a face-to-face meeting. WHY??? Because a PRUDENT president wants dialog, discussion and a VOTE or resolution of the board before diving into the pool.

Over the years what I have objected from some ignorant (not to call them ILL-INTENDED board members) is to call on their own counsel, insurance brokers or other professionals to consult their own their point of view or raise issues that reflects their own point of view. Thi is AS IMPRUDENT AS the PRESIDENT acting on his/her own. Unless a board member is empowered by the board to do the contacts and report back, individual actions send the signal of a weak, divided board or the wrong decision. Thus, to act as a board, all participate, all volunteer, all work in the measure of their talents and all live by the decisions of the majority; the minutes will reflect the desenting vote.

AdC




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Paid heed to this situation:

"The outgoing Board was ready to send an attoney's letter to the person about smoke and noise coming from his apt and decided to wait until the new elections. Now we have the problem shareholder on the Board.

Should we speak to the Board member first or send a letter? Can he even be on the Board if he is in violation of the house rules?"

1. Each time something like this happens nip it immediately. The worst thing boards do is do nothing. Silence has condemned the the "do nothing," "the nice guys/gals", "the uninvolved."

2. If the person was objectionable, bring it to the attention at a meeting, etc. Now, it is "tolerance" or become enemies. After all you all tolerated it for years and even allowed the person to be elected.

3. At this point, board members should discuss the issue openly with management as a witness and assume the consequences of how the person is going to take it.

4. If you are in majority, the person will have to comply. But probably will never cooperate and become adversarial and resentful.

Good luck!

AdC

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totally agree with AdC. This kind of behavior must be nipped in the bud, and shown early on that it is not acceptable. Now the board , and the building, seems to be held hostage to this outrageously inconsiderate neighbor!

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Just reporting back on new Board member with history of objectionable behavior. At our first Board meeting, the atmosphere was tense. No one wanted to lead the discussion about the noise and smoke (which has subsided considerably since he voted himself on the Board). A Board member took him outside before the meeting and seems to have gotten assurances of good-natured compliance. Could it be a new leaf? As new shareholders have moved into the building there has been a shift to Zero Tolerance and we think the Problem knows it. Also knows a lawyers letter was poised to go out. Any comments on how this was handled? Thanks all for your input on the situation.

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Upkeep of Super's Apartment? - Ms VooDoo Jun 06, 2007


Who is responsible for the basic upkeep of the super's apartment? Does the super normally make his own repairs (caulking shower area, plastering wall cracks, replacing broken window panes, etc.) as long as the corporation purchases any materials he may need?

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While there are no hard and fast rules on this one, I believe the superintendent wound perform some of the basic repairs in his/her apartment. Obviously there are situations where outside professional help may be required (plumbing back to the riser, electrical problems). In addition a lot depends on your relationship with the superintendent. If you have a very good super you may be willing to go the extra mile to help out. If not well.....

Finally, when the apartment becomes vacant for whatever reason (super moves on etc), it is probably best to go in and view the apartment to see what maintenance needs to be done as part of the upkeep (painting, sanding of floors etc)

Hope this helps

FN

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Thanks, FN. The super's apartment was repaired and renovated 6 years ago at a cost of $13K, before we hired our current super. He hasn't taken very good care of it and now wants us to hire an outside contractor to make repairs that were caused by his own negligence. For example, if he had addressed minor things at the outset, like using caulk in the tub surround, there would not be water damage on his living room wall.

I guess my question is, how much responsibility (monetarily and otherwise) does the super bear? We are not too keen on spending a lot of money (again) to fix his place up if he is not going to maintain it.

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this is the sign of a bad super. not worth keeping. start getting him out. serisously.

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While I agree with Sally (a little)I am of the opinion that you should first talk to your superintendent if you haven't already. Explain that he/she is responsible for the basic upkeep and if there is an issue that needs to be addessed regarding the apartmentyou are available. Start a dialogue and log/keep a record of when you had conversations. The rule of thumb which is very basic is, if there is a problem regarding the apartment it should be addressed straight away rather than later. A caulking job today that costs $20 (caulk etc) could end up a year from now as $500. (shareholder below has water marks on the ceiling and walls etc).

Hope this helped,

FN

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Right of first refusal purchase - rfs Jun 05, 2007


Have any of your condo boards exercised their right of first refusal purchase in recent memory? If so, what were the circumstances and did this prove to be a tremendous financial burden on the unit owners? This is one of my great fears about living in a condo building, but I know I have to be prepared for this in the future.

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I don't live in a condo, but here's a link to an article about a Manhattan condo that used its right of first refusal to deny the sale of apartments to a group home for the mentally disabled.

The group home sued and won.

http://www.nysun.com/article/54635

If nothing else, this is an example of why we don't need Councilmember Montserrate's bill to pass -- existing laws work!

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For condos you don't need the law, but Coops do need it

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I'm afraid I have to disagree with you, George. Co-ops are covered by the same laws as condos.

That said, there probably are co-op boards that discriminate; ours is not yet a perfect society. But if a board member told you why that couple's purchase application was denied, she's not going to say, "We don't want children/Hispanics/gay couples in our building." Instead, she'll say something like, "Their financials weren't up to our standards," or "They don't have steady incomes because they're artists/freelancers/new to the area."

The same thing would happen under Bill 119. But that's only one reason the bill is unnecessary.

The State of New York already identifies 14 protected categories against whom discrimination is illegal. They include race, religion, sexual orientation, military service, familiy status (whether you have kids or not), marital status (cohabiting instead of being married) and others. Turning down someone for any of these reasons makes a corporation guilty.

The office of the attorney general of New York, Andrew Cuomo, investigates and prosecutes these cases. One thing that means is that the aggrieved party need not hire her own lawyer -- the state picks up the cost. Another thing that means is the defendant has a bulldog bringing charges against it. New York's attorneys general have a recent history of going after even the biggest and most respected corporations.

If you, George, or anyone else reading this, know of any co-op, condo or landlord that has violated this state law, please call the Attorney General's office at (212) 416-8000, or visit his web site: www.oag.state.ny.us. We need to put an end to housing discrimination, and your phone call can make a difference.

Proposed Bill 119 creates no further protection for the 14 categories. There is, however, one additional group of people who will enjoy protection under the bill: Real estate agents.

Yep, the real estate agent of the buyer would be entitled to make a complaint AND to win damages.

So who's really being helped here? It's not the people of color or the people with children. They're already covered and protected. It's the real estate agent who wins! (Don't get me started on the new specialty that would enrich lawyers for years to come.)

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Evaluating the adequacy of a building's insurance coverage - rfs Jun 05, 2007


When trying to determine whether your building has adequate insurance coverage to protect against all sorts of disasters, what measures do you use?

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1. Have you met with your insurance broker to go over your coverage and know what are you covered for in the event of specific disaster(s) or losses?

2. Do you have total or partial replacement coverage?

3. Is total insurance coverage required because of the nature of your construction? How much would total TRUE replacement add to your premium a year? This may be considerable and perhaps out of reach, but you make the final deicison relating to the exposure that you wish to carry.

4. What about specific insurance for specific equipment, pollution issues and other coverages?


Regarding replacement coverage: Insurance in buildings is usually based on partial destruction, not on total loss. Of course, total loss is only a problem of certain types of constructions, location due to threats of terrorism, or other conditions.

The cost of replacing a building deals with construction costs per square foot. If you know the total square feet of the building and the typical construction costs per square feet, you may have the cost of replacing the building as it exists today in the event of a TRUE total loss, even when the present building does not meet the present standard codes. Once your establish the figure, you may set yourself to find out if you need total TRUE replacement or a significant amount under "total loss."

AdC


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Thank you so much for your informative response. Your advice will help when we scrutinize our building's insurance, which I hope will be soon. I am particularly concerned about what the flooding of the sub basement ( for example from a monster hurricane) could mean to crucial equipment.

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What drainage and equipment do you have in place to draw your water out from the building? Do you presently have a problem when it rains under flashflood conditions?

We have PROBLEMS too, and we are not talking about a very large, deep sub-basement. However,interestinag enough, things were cheap when the building was constructed. You will laugh if I tell you that the "drainage" consisted in opening the doors of the lobby (which is below street level) to let the water floor the elevator shaft!!! So, drainage is extremely poor and we cannot do much after revising the subject numerous times.

Getting adequately sized sump pumps that can be displaced or in place to handle water under flooding conditions is critical in our case.

Before the rain or the storm hits your building, you should start finding answers, so you may not have to engage scuba divers to look for equipment. That would be too late!!! Finally, your insurance will help with any major damages after you have done all your due diligence.

AdC

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Posting minutes - Nancy Jun 04, 2007


We're interested in finding out how many boards are posting the board minutes on their web site. If you have, has it helped to increase communication in the building?

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Some Boards distribute minutes to shareholders, while others do not. I do note that shareholders like it better to be informed, but be prepared to answer to them when they question why the Bopard made certain decisions.

I do not believe it to be a good thing to post them on a site, unless it was in a secure area where individual shareholders would have to log in to access the files. You do not want anyone viewing these, this can be dangerous.

Good Luck,
~AR

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HOw pathetic they are at times! I have read many years' worth of monthly board meetings and they prove what we know already: history repeats over and over and over...

Philosophy apart, I would say that minutes must be "sanitized" to leave out certain sensitive areas that we all know... staff issues, shareholders and tenants relations, even when minutes may only refer to apt. number and not names for arrears, water penetration, accidents, alterations, violations, etc.

As AR mentions, minutes may be dangerous if not addressed in their right context.

I would rather spend more effort and still address operations in a more focus manner so that decisions made by the board are enlightened by way of background and reason behind the decision. In other words, I am looking by buy-in of the shareholder population if the decision is to affect financially or quality of living.

AdC

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If you're looking to improve communication within the building, let me suggest a newsletter insted.

That way you're putting out the information you want, in a friendly way instead of the spartan, direct language of the minutes.

The newsletter need not be fancy -- just a page of updates distributed whenever you like. It could also include reminders (the managing agent's phone number, when to take out recyclables) and other things you like.

We've been doing it for a few years in our building and the residents love it.

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Steve makes a greast point. Any building that we have that puts out newsleters, is a happier, more informed building, with less potential to stop a Board member in the hall to ask questions.

~AR

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apt. insurance - group discount. anyone? BP? - sally Jun 01, 2007


we are considering making an amendment that all residents in the coop (inc. the sponsor's market-rate rentals) must have renters or coop insurance. as an incentive, we would like to negogiate a group discount with an insurance company (for example, if anyone uses Travelers, they get a 20% discount) - has anyone done this?

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It sounds like a noble effort that may not be worth it. These are my immediate reactions:

(1)You have to re-bid every year the insurance so that you stay competitive with the rates offered by various insurance companies.

(2) Individual shareholders may receive a greater discount if they have a car and other insurance that may qualify them. Similarly, some individuals may get umbrella policies for cars, boats, co-op that will go beyond the basic.

(3) Co-op insurance has different components: liability / personal. Some may think that their personal component should not be more than $10K while others may wish to take added personal for valuable objects such as work of arts, jewelry, antiques, etc.

(4) There are insurances that offer the additional assessmsent coverage in the event of total destruction of the building and need to additionally assess for reconstruction if a total replacement insurance is not in place for the co-op.

Good luck if you feel your efforts will be compensated!

AdC

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Insurance companies do not wish to assume the burden for an entire building. As a matter of fact, they have sophisticated systems that discern how much coverage they’ve written for a property and then they reinsure via any number of reinsures.

Thus, it would seem unlikely they would bid on an entire building.

In my case, I have my homeowners, auto and a mega-million umbrella policy with one carrier. For this, I obtain a discount.

Again, one carrier is unlikely to offer all residents a similar “discount” as it leaves the carrier quite exposed.

Let me ask another question; why even burden the board with this work? In my view, there are many more areas for board concentration than saving shareholders a few dollars which they soon will soon overlook.





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Sure someone can cancel after showing us the policy, but at least they had insurance once.

Last May 2006 as I was traveling on the west coast, our building manager called to tell me they were entering my apartment as a compensator failed and water had percolated from the 18th floor to all apartments in the same line(s) below.

While the building assumed some expenses, I was required to use my own homeowners insurance to:
1. Remove my furniture from the living room, dining room and foyer as the entire parquet floor (monolithic) required replacement.
2. Then, at my expense, I was required to discard all carpeting and underlayment.
3. Then, after the parquet floor was replaced at co-op expense, I was required to replace the carpeting and underlayment (don't forget the 80% rule).
4. There were some wall stains, so I needed to have part of the wall painted.
5. Finally, I needed to have someone move all the furniture into the living, dining room and foyer.

My tab was about $19,000 of which insurance paid about $11,000. Yes, we bought a better grade carpet.

Ain’t I glad I had insurance?

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then you will be notified if the policy is canceled. This is the same as when a shareholder has a contract do your and you get a certificate of insurance with the coop named as additional insured.

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I require shareholders to provide proof of insurance, which they are responsible to obtain on their own. My reasoning is that when 2A leaks on 1A due to personal negligence (bathing 3 kids at once), the coop is not responsible for this repair. I can then, without argument from or between the shareholders, inform them that this is a situation for their own insurance companies to work out. Management and the board are free from arbitrating this shareholder - shareholder event. Of course I follow up to ensure an amicable resolve.

Mortgage companies require continued insurance on the investment. Your manager should have a copy on file from the closing; you can have him/her just maintain a spreadsheet, and annually remind shareholders to send the updated proof.

On another note, it is illegal to force renters to purchase insurance. I always "highly recommend it" and assist in pointing them to a broker (we use The Registry – same company used for credit/background checks). The rational is the same as with the shareholder.

All that said, I agree with the other posters, in that the Board should not take on this responsibility (and added possible liability if something goes wrong). Use your manager if you do this, and have it be a management policy, not a Board policy.

Good Luck
~AR

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The Board is about to address the issue of all shareholders needing proof of insurance and we have a concern about a unit that was bought from foreclosure years ago. They might not even have a mortgage that requires insurance as they may have paid cash. They have a rottweiler. We have heard many carriers do not issue policies for households that have certain breeds of dogs. How can we ensure that they get insurance if that is the case? How can we be sure that these shareholders tel the insurance company that they have a rottie? If they don't disclose this fact, and there is ever an incident with the dog, can't the Co-op be held liable for any injuries or claims arising from an incident?
Thanks all.

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Those questions are better suited for your insurance broker.

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I resent your kind of thinking - so parental. you better find out the legality of such a requirement first. I am not sure AdC is correct.

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and do fine shareholders that are not compliant. Though to be honest I have not querry counsel about legality and do not know of any shareholder that has tested this.

Jack

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Sally, I agree with AR. Shs should get their own insurance. The prop mgr can keep a spreadsheet and send Shs an annual reminder at renewal time. Our Shs send our prop mgr a copy of each renewal, at least the page with effective dates so we know it's kept up. Our apt sale package includes a form (to be signed by a buyer applicant and notarized) agreeing to get insurance and send a copy of the policy (or a letter of confirmation from the insurer that it's forthcoming) to our mgmt office within 30 days of apt closing.

As AR said, it's illegal to require renters/subletters to get insurance. Our Shs who rent insure interior elements of their apt (floors, appliances, all fixtures that come with the apt), and they recommend to their renters that they get insurance to cover their personal belongings in case of fire, water damage, etc.

The board should stay out of insurance issues, and as AR said, the prop mgr can advise a Sh if s/he has to deal with another Sh directly to settle a problem and just follow up to make sure it's resolved.

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"it's illegal to require renters/subletters to get insurance."

Well, you are not dealing with renters or subletters, but with shareholder or sponsor(s)if more than one, who sublease. Therefore, the shareholder who owns the unit is always responsible for liability insurance.

So, directly, you may not impose on renters, but on the shareholders of the sublease unit!!!

AdC



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thanks everyone for yoru input.
I am not sure it is legal to require shareholders to maintain insurance - where can we check? i want to be 100% sure of facts. thanks!
despite the fact that you can amend it or put it inthe bylaws - bottom line - is that legal>?
sometimes the board has to get involved if structural elements othte building are involved - like the floor structure and electric between floors and any original components of the building like the original floor. that is all coop responsibility. except if there is a case of neglegence like the upstairs neighbor leaving on a tap - in which case veryone's insuracne co. should be notified inc. the coops.

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You may enact a resolution of the board and demanding liability insurance for $ X value and $X for personal insurance.

Liability insurance is for damages caused to the structure and other shareholders' apartments due to negligence or accidents on the part of the shareholder. Example: You had a water overflow in your toilet tank; your dishwasher hose got dettached from the elbow under your sink, a painter fell in your apartment and had no insurance of his own; you left a window open during a storm and water penetrated your apartment and the one below, you started an accidental fire that ruined a portion of your apartment, your heat vent is defective and water came out and affected the ceiling of the apartment below or your own apartment, you decided to spread a cement slurry to place tiles in the kitchen, but the slurry was too thin and ended up in the apartment below, etc.

So, individual insurance is excellent for shareholders to buy peace of mind if something were to go wrong under their responsibility.

Finally, it has nothing to do with the responsibility of keeping the buidling infrastructure by the co-op, except that shareholders and co-op sometimes want to pass the buck to the other and conflicts ensue.

AdC


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