It's hard for a long-time board president to feel at ease about retiring, especially one who did most of the work. Many board members are capable, offer ideas, etc., but they are content to let the president coordinate and do everything. Designate more work or ask them to volunteer for a task - overseeing a project, writing a memo to residents, etc. Make use of their skills and talents. Let them know you won't be on the board much longer and give the dedicated ones a chance to step up to the plate.

Some presidents don't want to disclose that they'll be retiring. This often happens if there's a fear of SHs with personal agendas taking over or where no one seems interested in being on the board. Another way to start making a transition is to talk to SHs you think would be good board members. Encourage them to run. Tell SHs who are CPAs or other professionals how valuable their service on the board could be for the coop.

Also look for prospects who are "people" persons, no matter what work they do. It's good to have board members who can deal well with SHs. Some people are good with numbers, coming up with new ideas or formulating strategies for the future but they may not be good communicators. The board as a whole should communicate, keep SHs informed, etc, and having one or more board members who can do this on a one-to-one basis with SHs in an open, receptive manner is always a plus.

I've retired from several boards after a long term of service. I've sought out good replacements before I retired. Sometimes they're not easy to find but it's worth the effort. None of us want to put a lot of ourselves into something and worry about how it will be handled in future especially if we still have a big investment in it.

To Cathy who asked about retiring from her board: no one is indispensable and your coop will go on without you. But it can be hard to let go. One last suggestion. Before you retire, try to ensure some "continuity" for your board. In time people learn, but it's a big mistake to turn over governance to a team consisting only of SHs who don't really understand what a coop is yet, have been in a building for only a very short time and/or have no one with experience to help them learn and move in the right directions.

Bravo, BP! Great answer.

In fact, what you describe is eerily close to how I became president of our co-op. The former president recruited me onto the board, where I spent two years learning a lot and taking on a couple of projects that interested me. At the beginning of the third year, right after the Annual Meeting, the former president announced he was stepping down and asked me to replace him. He had told NO ONE of his decision in advance, so we were all somewhat startled.

The former president remained on the board for a final year to ease the transition, which was very helpful. I would suggest that the original poster do the same.

Now there's some good advice. One of the most interesting things BP says is something that leadership and management books all say to do but almost no one does, which is to get a variety of types of people on a team. Too often, boards (and corporate offices) work on how buddy-buddy people are. Obviously, you don't want a misanthropist in the mix, but having board-members who aren't like you helps to generate new and different ideas. Like BP says, you want a people person, a numbers person, a details person, a big-picture person, etc. You can't have all one kind.

I don't see any law that states that multiresidential buildings must upgrade their outside aerial antennas to HD.

The issue is one of PR by the Board, i.e., to satisfy the minority who does not have cable or other form of paid TV compatible with HD. For your info, there are indoor HD antennas that may be purchased and could be effective.

Finally, if the board is not agreable to upgrade the antenna, then I would suggest that the users of the central antenna pool their resources and upgrade the master antenna of the building. After all, those who currently pay for cable, FIOS or other private network are probably least interested in changing back to the master antenna. In fact, this may be more equitable, since this small minority are the only ones who will use the system. This will not tax the rest of the residents not interested in being connected to a handful of channels.


AdC

http://www.nytimes.com/2008/05/11/nyregion/thecity/11disp.html


http://tv.about.com/od/accesspries/tp/topHDantenna.htm

HG - Read the article "Smoke Gets in Your Eyes" on p. 26 of Habitat's November 2008 issue or on their website. A few years ago a coop tried to ban SHs from smoking in apts. It caused problems, but things are changing.

This article says that some coops are making a transition to a "non-smoking building" by prohibiting smoking by sublet tenants and/or new SHs, but grandfathering existing SHs. It sounds like a good way to get this started.

My coop has 8 apts per floor. Our floors are small, and people in 5 of the 8 apts on my floor smoke. Some people also smoke cigs and "other substances" in the stairwell. I have 2 air purifiers but the odor is still awful and permeates my furniture, clothing, etc. I dread winter because sometimes I have to turn off the heat and open windows to get the stench of smoke out. We have smokers on other floors so it's a building problem.

HG, read the Habitat article and talk to your coop attorney. There are some things you can do.

Thank you for your info, I will read the Nov HabMaz ... However,is there anyone who has actually taken action.. tried to change the bylaws, gone the legal rt?

We in our CoOp are not in favor of too many restrictions, but we have a number of elderly and others with helth problems, this could be a health issue.
HG

HG - The Habitat article mentions buildings that have, or plan to, amend their by-laws regarding smoking.

our building has had problem shareholders with smoke and other "substances" permeating common areas and units for years. There have also been problems with smoke coming from our co-op
s private balconies and yards. What's frustrating is it's been easier to get landlords and tenants next door to us to curtail the smoking when it migrates to our buiding, and our own shareholders take a miliant stance and abuse their fellow shareholders. The smokers of whatever were problem shareholders/ difficult personalities in other ways such as arrears, lifestyle and hygiene issues.(I am not saying all smokers are difficult, but ours have been!). By not nipping the "other substances" issue in the bud by calling the police--it is illegal in NY- Rockafeller Laws substantiate calling plice--we shot ourselves in the foot. However, the cigarette smoke problem is now being addressed by our attorney in the scope of a larger complaint and we've been told that secondhand smoke is no longer an ambigious area. Read the Poyce case at 22 west 15th street. A Board and owner were deemed at fault for not making good faith efforts to curb smoke from entering another unit subleased by a couple from the owner. Apparently, this has set a precedent and smoke is being considered to be dangerous to health in the same way chemical and other noxious odors are. It is not just atributed to "this is NYC and noise and smoke are part of living here."

I'm a assistant resident manager in a high end luxury building for a major developer in the city. When we have a problem like this, 1st line of defense is to make sure you seal up all the electrical outlets, caulk the base boards/molding make sure the windows are sealed properly. Also the smoker has to ventilate his/her apt properly. What you need to do is look at the lease/ house rules to verify that this is in writing. If this is not in the house rules make an amendment to the house rules with a stipulation, which will mean a violation, then the board/owner will decide what the outcome will be. Remember, your all neighbors in a community, try diplomacy first, see the the resident will cooperate to cease or move the smoking to one room instead of the entire apt.

When I hear people talk about cigarette smoke penetrating their apartment from another, I always think of odor = smoke. My question is a simple one: What kind of cigarette, tobacco or other form of pipe provides smoke that infiltrates long after the person has stopped smoking? Do people see real smoke, that blue puff that comes out of someone's mouth or is it the odor that remains in the air, clothing, hair, etc that disturb people?

Unfortunately, I tremble when I hear smoke, because it takes a lot of people puffing to make a cloud that may invade other apartments.

Would someone clarify for me or am I a bit confused?

AdC

My feeling is that the smoke from cigarettes is the physical form that contains the poisons and carcinogens and migrates from one apt to another and the "odor" is what is the proof that these molecules are permeating another unit. I'm sure a scientist could break it down more but according to the people that make the hepa air cleaner I bought to clean the migrating cigarette smoke from my unit, smoke particles are large and require a special absorbant charcoal filter to trap the particles. However, I read that the gases that precede the actual smoke odor are more noxious than the smoke. Does this answer your question?

The explanation is great, thank you. But, without being facetious, I would like to ask you: Don't you think that the smoke emitted by a single cigarette smoker smoking will not dilute over distance due to air volume in the room? How much of this smoke is going to migrate to another apartment through electrical conduits, baseboards and holes?


Similarly, I get the aroma of cinammon bread from an industrial bakery located 5 blocks away from the apartment parking lot. Is the smell of cinammon proof that cinammon is present in the parking lot in significant quantities? What about the smell of fried fish in a hallway? Does it proof that particles of fish and penetration of fish is in the hallway?

Don't get me wrong, smoke travels, but it takes a small army of cigarette smokers or a discotheque full of people to generate the type of smoke that would invade apartments.

This is where I question whether odor (not to penetrate another person's apartment) = smoke.


AdC

The explanation is great, thank you. But, without being facetious, I would like to ask you: Don't you think that the smoke emitted by a single cigarette smoker will not dilute due to the air volume in the room? How much of this smoke is going to migrate to another apartment through electrical conduits, baseboards and holes?

I get the aroma of cinammon bread from an industrial bakery located 5 blocks away from the apartment parking lot. Is the smell of cinammon proof that cinammon is present in the parking lot in significant quantities? What about the smell of fried fish in a hallway? Is this proof that fish particles are now present in the hallway?

Don't get me wrong, smoke travels, but it takes a small army of cigarette smokers or a discotheque full of people to generate the type of smoke that would "contaminate" and eventually invade apartments through exhaust systems and crevices.

This is where I question whether odor (that should not penetrate another person's apartment) = smoke.


AdC

Fish "particles" will not give you cancer, or, hopefully, set off asthma or other serious allergies. The reason secondhand smoke is being taken seriously in courts these days is because the surgeon general has legitimized the serious health issues caused by secondhand smoke/odor etc. It's not akin to strong perfume odors (which can cause allergies)or cooking odors though those can be restricted under the "unreasonable odors must not permeate other units or common areas" clause in house rules. Secondhand smoke has been proven to cause cancer and that has evolved into an actionable violation that has been upheld in the courts.

And, yes, the smoke/odor from one cigarette can and does migrate through floors/outlets. Our Board has checked out complaints of this nature and we've seen one cigarette produces this insidious smoke that travels and is very evident in adjacent units.

You sound angry. Yet, you cannot convince me that smoke from a lonely smoker is not diluted in a large volume of air and that the odor does not indicate presence of smoke.

Sorry, but the topic becomes rather emotional and statement repeated of what is well know: secondary smoke causes cancer; but, is odor too? I think this is a new one!
AdC

I lived in a building where a resident lived on the lobby floor across from the elevator. She was a chain smoker and rarely left her apartment. The smoke/odor was horrible. When she opened her door smoke would escape to the common hallways. The rug and the outside of her door were brown from nicotine stains. We put a deodorizer in the hallway and advised her of the complaints that were being received from other owners. She was receptive to the complaints and tried to smoke near an open window. The situation remained the same. It was an embarassement to take a friend to your apartment and have to smell cigarette smoke.
I believe that smoke odor is the same as second hand smoke. How would the outside of her door to her apartment and the carpet be brown from nicotine? I guaranty that everytime you waited for the elevator you got to breathe some second hand smoke. With that said I believe that smoke and odor is the same.

How do we know the smoker was lonely? Maybe she was happy to be alone and left to her smoke. Maybe her husand left her because of secondhand smoke. Maybe she loves her cigarettes more than life itself. Sorry, I couldn't resist. As an ex 2 pack a day smoker, I know what it is like to be addicted, but as someone who gave it up 25 years ago, I have little patience for inhaling other people's smoke/odor/carcinogens/particles whatever. If we wanted to expose ourselves to the risks of any and all of the above, we can smoke firsthand and suffer the consequences. In a community you have to go with the socially accepted norm and that is not to inflict your lifestyle on other people. It's the basis of civility and without civility and respect for other people, life in a co-op hasn't got a chance. It is very draining and not happy work for the Board to make shareholders comply. Back and forth with counsel takes enormous time and energy from an unpaid Board and we have to sacrifice our personal lives for the sake of the greater good.

I think AdC meant "lone smoker," not "lonely smoker." In any case, his strong defense of smoking odors is very odd, especially that cinnamon comparison. Smell operates on the existence of microscopic particles and not waves. Thought it may stretch the bounds of AdC's imagination, particles can travel surprising distance ... and even leaving aside the well-documented effects of secondhand smoke, cigarette odor is both noxious and obnoxious. It's a warrant of habitability issue -- and he ever-helpful Joseph Shkreli put everything in exactly the right, proactive context.

Check your By-Laws. Typically, "each shareholder" gets to vote, regardless of being in default on the lease (Article II, Section 5 in our By-Laws).

If you're in the midst of canceling someone's shares and lease due to default and have already gotten at least one court to rule in your favor, it's murkier. Ask your attorney.

No wording such as "in good standing"?

Yes, by laws state "in good standing"-does that imply arrears and violations render the errant shareholder ineligible to vote?

generally means current with maintenance, no arrears whatsoever, no House Rules violations, etc.

Check with your Board; if you're on the Board and are the liaison with the co-op attorney, check with him/her.

My friends

The coop first and foremost is a corporation.

Thus, corporate bylaws prevail at all times. Yes, there may be case law that overrides some by-laws, but this is not a frivolous undertaking. Always have the co-op’s attorney provide guidance as self interpretation can lead to chaos and pain.

Unless specifically defined in the co-op’s by-laws, one is spawning a firestorm, if it is determined that the board of directors was arbitrary and capricious. In my view, the bylaws must explicitly state that a shareholder in default and duly notified cannot vote in one or more procedures, else one is seeking trouble.

You mention the president, but what about the rest of the Board? If shareholders are concerned, what about a change in the guard?

AdC

You say that "Our maintenance income does not meet our operating expenses," which is certainly a problem. The money's got to come from somewhere; depleting your reserve fund to pay day-to-day expenses is intrinsically a bad idea. You're just putting off the day when you'll have to raise maintenance -- and probably by a lot.

As for your reserve fund itself, the rule I've heard is that your reserve should contain at least three months' worth of maintenance. Lawyers performing due diligence for potential buyers are going to get nervous if the reserve fund is lower than that. "Far less than $100K" sounds like way too little for a 120-unit building.

It can be difficult to overcome resistance -- both within the Board and among shareholders -- but a straightforward, transparent approach is usually best. "We're spending $X per year, and we're not wasting any of it on unnecessary luxuries, so it's a matter of simple arithmetic that maintenance needs to be $Y per share to balance our budget." Especially given the current credit crisis, people should readily understand that careful money management is essential.

The only organization that can survive spending more money than it earns is the federal government. All you have to do is convince your board pres to buy a printing press and then have the super crank out greenbacks.

Seriously, you're in debt and you're going deeper in debt. How on earth is that normal? Remember that a "co-op" is just the cute name for your Corporation. Corporations need to make more than they lose or else, well, ask your board president if he remembers AIG and their ilk.

Ask your corporate accountant to attend a board meeting and tell her/him to give you the benefit of his/her professional experience.

I'm guessing you're going to have to increase your maintenance and find other ways to broaden the revenue base. A flip tax did wonders for our co=op. Good luck.

A negative budget, e.g.: planned operating deficit, leads to disaster

If a board votes negative budgets year after year without wresting itself from the abysmal situation, the board of directors is plainly abrogating its fiduciary responsibility. The board can be sued and one can further assert that the BD&O insurance does not cover malfeasance by the board, e.g.: fiscal irresponsibility.

Why do so many boards feel they can operate in a laissez faire atmosphere? In some cases its naïveté. In other cases, boards are obtuse or live to please their constituency, e.g.: not raise maintenance, not impose assessments. To what good purpose?

If a bank reviews the budget and the history of the co-op in anticipation of a line of credit or a loan, it will ask for several years of annual reports as well as the currant year’s budget and pro-forma.

What can the co-op pledge to the bank as collateral? The answer is the maintenance income. But if maintenance income does not cover the costs day-to-day, how will the co-op repay any loans or lines of credit?

A series of operating deficits as well as planned losses can preclude the acquisition of operating funds and lead to bankruptcy. In truth, there is a condo nearby to our co-op. It was a co-op, but the board ignored all the deficits over and over again. They went to the well one more time. This time, the bank said absolutely NO. In turn, the co-op was forced to convert to condo. Besides the normal transformation costs imposed upon each shareholder, e.g.: several thousands of dollars for each shareholder, the owners (shareholders) were required to absorb their prorate burden of the outstanding debt and payables of the co-op. These amounts were in the tens of thousands of dollars for each shareholder. Many were required to increase their loans by substantial amounts. So who won?

The monthly maintenance must cover all expenses, all payments for loans and lines of credits as well as fund and maintain a modest operating (cash) reserve fund. In addition, a board is remiss if it does not have a yearly ongoing assessment and sadly most co-op boards ignore the need for this capital reserve fund; even in the face of bylaws that define such a fund.

How many have read the AICPA document dealing with co-ops and condos as noted elsewhere in this board talk?

So, a co-op always needs to have its house in order.

What about the case where we have massive deficits each year which occasion massive increases and assessments each year and nothing is done in the building - and money disappears - should you not question the board, accountant and management company, but apparently this situation is not that uncommon yet apparently nothing can be done about it - any advice will be welcome

Run for the Board.

Only when you can work from the inside will you feel comfortable. And only then will you have access to the information you seek without legal proceedings.

Is the super trying to contact Thyssen-Krupps CEO or getting the Sheik Abdoul to lower the coop heating oil?

It seems that such calls are way out of line and should be brought to the super's attention and to the union if there is one. This is blatant abuse that should be nipped in the butt. Finally, if you wish to provide long-distance calls, give the super calling cards. It's much cheaper.

AdC

"nipped in the butt"

You made my sides hurt, dude.

In our coop:
1. Local calls = OK
2. Domestic long distance calls = OK (but if the amount seems exorbitant, we may challenge)
3. International = Not as a matter of course (Unless an emergency, family illness, military, etc.)

I agree with 1 and #2 to a certain extent, i.e., in the event of tri-state location of vendors.

However, international calls is a real NO. Today, there are calling cards that the person should have to make international calls on the phone paid by the co-op. Even, if the person were to call without a card, you expect them to reimburse the co-op for the use of the line for such a call.

Obviously, the co-op and employee should come to an agreement from day one on the use of the phone and what is acceptable and what is not. If it is put in writing by way of policy, then there is no qustion as to what is expected and what are the limits of fair and expected use.

AdC

This is somewhat the same as cable. Our super is provided with basic; beyond that, the super must pay for premium channels.

A co-op provides basic telephone; beyond that, the super should be paying.

if you allow this

Just my opinion

Someone in my coop recently asked if SHs can exchange apts that are allocated the same # of shares and our attorney said no. You can't negotiate the difference in value of apts, and there are factors such as taxes, mortgages on the apts, etc. If this were allowed, SHs would be exchanging apts in their buildings and between buildings all the time, and what a mess that would be.

Your SH has to sell the shares for her apt and buy those for the other apt - and why does she want minimum paperwork due to her immigration status? Something there doesn't sound right to me.

Any “exchange” of property such as real estate especially has income tax implications and likewise needs to withstand IRS scrutiny. As there must be a dollar amount ascribed to the transfer there are the tax implications.


Thus while two shareholders may wish to exchange apartments, the transaction must meet legal and tax requirements.

Thus, the co-op corporation’s transfer agent (attorney) must be involved and as usual all necessary paperwork must be generated.

Unless all legal matters are in order, the co-op corporation could be subject to some nasty legal challenges and litigation in the future.

Our board decided to lock in with a fixed-price contract for 50% of our needs for the heating oil which will allow for some flexibility.

Locking in with a fixed-price contract would allow for a more accurate estimate of a budget for heating oil.

Of course there is absolutely no way to know how the price of crude oil will fluctuate over the next six months. That said, the current price of about $62 per barrel is the lowest in a year, and it is certainly reasonable to consider a price lock.

A key point is the precise terms of the forward contract you sign. How much of your fuel oil will be purchased at the agreed rate? Is this a fixed rate or (preferably) a rate cap? If the price of oil plummets, is there a way to get out of the contract by paying a cancellation penalty?

As another poster mentioned, a rate lock will allow you to draw up a more precise budget, which is yet another advantage.

The New York Times ran an article a few days ago (see URL below) that was all about homeowners who regret having locked in the price of oil last summer when prices were peaking. Can someone tell me what the point of that was? Is is that homeowners should have been able to look in a crystal ball and predict the future, when all the experts and talking heads on TV were wailing and moaning that the sky was falling and oil prices were only going to rise?

In case anyone else wants to get as apoplectic as I over this hindsight nyah-nyah story, it's at
http://www.nytimes.com/2008/10/23/nyregion/23fuel.html?_r=1&scp=1&sq=locking%20in%20oil%20prices&st=cse&oref=slogin

For the record, we did not do a lock-in last summer, but I would hardly fault any board that did. Jim Cramer and all those other "experts" should be ashamed of themselves for not providing a disclaimer: "We really don't know any more than you do, but we say things with authority and entertainingly, and you morons believe us and keep coming back for more. Ha ha ha, look at my bank account!"

Try contacting Guy and MyBuildings.org they are pretty reasonable.

Just to be clear, my email address is fordruth@mac.com. You can also contact me by cell phone: 646-701-1670. Thank you.

A Habitast article about boards that use careful judgment (eventually) vs. blindly authoritarian boards:

http://www.habitatmag.com/publication_content/2008_october/web_exclusive_adaptations/authoritarian_boards_public_rancor

We have not amended nor have we contemplated amending our sublet policy, which for our co-op is nil. We do not permit sublets at any time, crisis or not.

Even in cases where folks are having difficulty selling their units? How do the shareholders feel about the board holding the line? If you have a moment, can you contact me offline?

Ruth Ford
646-701-1670.

Folks as draconian as it may sound; the responsibility of the coop is to the corporation and the wellness of the corporation.

When does subletting end? Who sets the rules, is one enough, two, ten, twenty, etc.?

Sorry, I need to be aloof, as horrible as it sounds.

If you want to permit sublets in a co-op and the bylaws forbid such a transaction, then so be it -- no sublet.

If owners wish to permit sublets, then amend the bylaws and establish rules so that the board members can go on with the business of operating the co-op in an effective manner, rather than piecemeal, without legal standing.

Let’s think for a minute. What are the rules for subletting when no by-law permits such action? Who decides who is worthy to sublet and who is not? Do you ask for another financial package? How do you verify need? Should you? If you don’t verify then every silly or bogus request needs to be honored.

Are you jeopardizing the borrowing power of future owners and thus sales by having too many sublets? How many sublets is enough? What is the governance?

More importantly what is your co-op's legal standing? What if owners sue the board for breach of fiduciary responsibility?

Think first!!

There are too many owners that sue at the drop of a hat and I for one as a unpaid volunteer do not have time to expend my time answering frivolous and perhaps not so frivolous law suits when an owner sues because she or he has been denied or objects to sublets (per the by-laws). And, who wants to squander co-op funds defending a law suit.

My view is stick with the rules. If permitted then yes, if not permitted then no. Board members should not waive rules. These rules, however dated, exist for a good purpose and should be formally amended rather than waived or broken as the situation may dictate.

If your attorney has not counseled otherwise, then your attorney is remiss.

Our board operates as a true board as we do not meddle in the day-to-day operations of the corporation and the building.

The board has demonstrated a long term adherence to the bylaws and other attendant documents. Our owners expect a steady hand and adherence to rules, and this is what they have received. Yes, all empathize when folks are in distress.

But as noted adherence to the rules, saves us time and again when some owner feels that a refusal per the rules is unjustified and thus engages an attorney and presses a suit.

Basically, an owner must now plead that he or she wishes an exception to be made to the rules as opposed to showing that others have received a favorable waiver and he or she has not.

Now where's the burden? As a judge, how would you rule?

it is really beneficial to allow sublets - with restrictions - but allow them. it is. also this is much easier for boards that do not have members with control issues but who have forsight. all to often boards have members with issues that can make things, in fact, more difficult for a copp to function in a truly productive manner.

Sal,

You are now correct.

Amending the bylaws is the way to go, if the residents wish the corporation to entertain and operate such a policy.

In the absence of a bylaw change; it is still nil.

Unfortunately for many years we had a board who protected owners who sublet. We finally ousted this group, but are now stuck with the owners who do not want to give up thier Hotels. We are a small (100) building and have apartments that are run as a B&B. (maid etc) ... and other owners/renters have not been in the building for over ten years.

We are now going to try to vote in a Sublet Bylaw. We feel that two years with a one year emer extension is fair. Four years between each individual sublet. To discourage investors, new owners cannot sublet for two years. Also a 10% limit on the number of Sublets at any given time.

Any thoughts or suggestions are welcome.
Thank you ..HG

My building (also small) has a very generous sublet policy -- allowing a shareholder a total of 4 years of subletting. How it got to be so long is beyond me. Up until about 15 years ago, we had a no-sublet policy. Then the retrenchment in coop pricing and mortgage lending induced us to allow it to relieve the hardship on shareholders who needed to sell but could not get a buyer. The term started at 2 years, I think, and has expanded to 4 -- far longer than ought to be necessary to accommodate a temporary job reassignment or even to tide a departing shareholder over a depressed resale market.

There are some abuses. E.g., 2 apartments were rented out for the maximum 4 years, and when the maximum was up, lo and behold it became "convenient" for the owners or members of their families to move back in -- and both of them had been living in the City (I think) during the sublet. One shareholder sublet because he had been admitted to business school down South; 2 years later, after he had obtained his degree, he wanted to continue subletting, even though he was then living in NYC. The only reason why he changed his mind is that he couldn't get his tenant to pay a higher rent.

Then there was the woman who wanted to sublet because she was now engaged, the apartment was not big enough for her and her fiance and they were now living in larger, rented quarters elsewhere, but she wanted to hold on to (and sublet) her apartment in our building "in case things didn't work out."

Or the couple who bought the apartment for their college student daughter, who lived here the minimum 2 years and then decamped for Los Angeles, where she had gotton a job. The parents sought to sublet, saying that they had intended to use the apartment as their pied a terre when their daughter moved out, but they now found themselves not as close to retirement as they had thought they would be. They've been subletting for 2 years -- so far.

The maintenance rate is far below the rental value of apartments in our building, and I can't help but think that shareholders wouldn't be subletting at all, much less for so long, if they weren't making a profit off it. This is a small building (110 apartments), and we have trouble getting people to run for the small board (of 5), as well as to do the things around the building that have always been done by volunteers, such as gardening our tree pits. The presence of subletters exacerbates both problems.

If you have 110 apartments and are having trouble getting 5 people to serve on the board, you building has issues that go way beyond a handful of apartments being sublet.

The supposed horror stories you cite -- it's hard to comprehend any problem. You mention someone subletted for the 4-year max, and then the owners/family-members moved back in. And the problem is ... what?

You mention a parent-owned apartment, with a daughter who moved to L.A. 2 years ago, and the parents are ... only halfway through the allowed 4 years. What is the problem???

I read this thread about subletting, and most of what I see is knee-jerk hysteria and the throwing of labels. It's like a Sarah Palin rally.

Before you start accusing others of hysteria and "label throwing" like participants in a Palin rally, you should look at your own behavior. These gratuitous insults sound like a McCain tactic -- character assasination -- made all the worse by the fact that they were delivered anonymously. It's just this sort of abusive rhetoric that poisons discourse in this forum.

Putting too many and putting too few (or no) restrictions on subletting can both cause problems. With too many, SHs can get tied in a strangle hold. With too few (or none), SHs always find ways to "abuse the privilege". Either way, the board has to sort out issues case-by-case and deal with complications or complaints that arise. This can be avoided to a great extent if rules and guidelines are in place and enforced properly.

If subletting is allowed, the best way (IMO)to handle it is to establish the clearest, most complete set of sublet rules possible - rules that are fair and consider the needs and best interests of SHs, their neighbors, and the coop as a whole. Send all SHs a memo or a "Coop Rules For Subletting" document that spells everything out, and advise them to keep it for future reference.

Make sure (as best you can) that everyone is on the same page and understands what is and isn't permitted. A memo or document with a short intro (or short cover letter) and the rules outlined in bullet points is a good way to make this easy for SHs to grasp.

Be clear and be specific. For example, the rules should state:
-- If a sublet application package and board approval are required for new sublets
-- If an application form and board approval are required for every renewal period (this can be short with just basic info - renewal lease dates, where the tenant works and his work/cell number, etc.)
-- What sublet lease periods are allowed (e.g., 6 months or 1 year only at a time)
-- How long subletting is permitted (e.g., for a 5 year max, then no more - or - with no limit but with board approval required for every new and renewal sublet)
-- If there's a residency requirement (i.e., if a SH must be a resident for, say, 3 years before any sublet of that apt is permitted
-- The sublet fee for new and for renewing tenants (it's a good idea to have fees)
-- Any fine for "invalid occupancy" - if an unauthorized person is living in an apt or a tenant remains after his sublet period has expired without a board approved renewal

Above are examples of what rules should include. The board of each bldg has to get together, carefully consider what rules to establish, and impose fines or take some type of action if there's non-compliance.

You want to be fair to everyone and rules are necessary, but rules with no follow-up or no ramifications if they're ignored are no rules at all.

Have a subletting game plan, set rules for it, be proactive if rules aren't followed, and a lot of problems can be eliminated.

Sorry, I accidentally forgot to fill in the sender line on my post here that begins with putting too few or too many restrictions on subletting, and I clicked "response" before I realized that I did this. My apologies.

BP

My compliments to Anonymous -- he or she shows exactly the kind of thoughtful, nuanced leadership that any organization needs.

Anyone can blindly follow draconian, authoritative rules that try to fit all human behavior and needs into a "one size fits all" form that doesn't account for a range of human and economic realities.

True leadership is hard work. If showing judgment and wisdom is too tough, than let someone else lead. As with Mayor Bloomberg and the City Council's term-extension power-grab yesterday -- slapping 89% of referendum-desiring New Yorkers in the face -- it's the height of hubris to think that "I and only I can run this co-op. No one else is capable."

I do understand the cons of subletting, but it's hard on SHs who relocate, can't sell quickly, etc. if they can't sublet. It can also be hard on tenants if a sublet has a cap of, say, 2 years. Why make them have to find a new place when they've just started to build a life where they are?

If a coop has a policy stating that sublets can only be for 6 months or 1 year at a time and every renewal requires board approval, tenants who cause problems or don't obey the rules can be denied renewal. A cap on sublet renewals could be set at, say, 5 years. Many tenants (even many SHs) wouldn't stay that long. They'd marry and need a bigger apt, relocate or whatever but it would provide some sense of "permanence" while they are in a bldg. Flipping tenants in and out in the short term also adds to a hotel or revolving door mentality which is what coops typically don't want in any case.

Having SHs as residents is usually deemed preferable. We have a policy stating that no more than 20% of apts can be sublet at any one time so we're not overrun with tenants and that's never been a problem for us.

Sublets can also be a good source of income for a bldg, especially one that doesn't have many/any other ways to generate it. We have a sublet fee for all new AND renewal sublets equal to 2 months maintenance, and we only allow sublets for 6 months or 1 year at a time, so this does bring in income. It can also be thought of as a way of discouraging over-subletting because some SHs won't want to pay that fee for every new or renewing tenant. If the average fee was, say, $1200 and a bldg had 10 sublets, that could bring in $20K a year.

Just wanted to express a few thoughts on the pros of subletting. Thanks.

Harold - remind me not to live in your building. sounds like you have inflexible and limited thinking there.

All should remember, if you make an exception once, then every other owner will ask for an exception to the rules.

Even when we don’t make exceptions, we are accused of making exceptions.

In the long run, it is always better to not make exceptions. Why? Who wants to take the time (at the pay you receive from the coop) to examine and reflect upon each exception request and to then have an attorney prepare the appropriate documents.

And, who wants to expend valuable time to defend challenges to refusals to grant exceptions? Isn’t it easier to say we have never granted an exception?

This is especially true as so many co-ops have a revolving door for board members and what the board did today and the reasons will be lost, but someone will remember that an exception was made.

And as for not living here, hmmmm??

We have no mortgage as our fiscal plan over the last twenty-five years has had but one thought e.g.: retire the debt without refinancing. Along the way we have also made considerable ($millions) in capital improvements. And for a luxury building, we are one of the lowest cost buildings in our area for similar luxury buildings.

Oh, did I mention, we are almost 100% resident ownership with just a few sponsor units occupied by protected seniors renting. Yes, less than 2% of our 500 units are in the hands of the sponsor.

Perhaps if others did not try to run popularity contests for board membership and adhere to total fiduciary responsibility there wouldn’t be so many co-ops in fiscal distress.

And, let me add that my analysis of many coops in my area and there readings herein cause me to opine that many boards are naïve as the folks have never run a corporation.

in fact our building never has any problems with sublets and often th renters are more considerate than the owners. it is also a very nice convenience for owners who need the $ or get posted away for a while.

I'm appalled by the self-righteousness of this board-member's replies. ("Oh, did I mention...?" How nasty and smug.) To hear him put it, any breach whatsoever in the wall of subletting would result in fiscal chaos.

First, that kind of false dichotomy wouldn't be stood for in freshman debate.

Secondly, leadership requires using judgment and knowing that in business as in anything else, there is no one-size-fits-all solution. That is authoritarianism, not leadership. Given the economic downtown, for example, what happens if a newly unemployed owner has trouble making payments, and can't find a buyer? Harold, judging by his statements, would rather see the apartment go to foreclosure than allow a renter that the owner might be able to find as a stopgap measure.

And incidentally, the correct grammar is "fewer than 2% of our 500 units," not "less than 2%..." -- the units are discrete entities. Less sand, fewer grains of sand.

Our building consisting of 58 units converted to a co-op in 1982 and we had an unlimited sublet policy until 1998. In 1998, the co-op board decided to impose a 2/5 sublet policy.
When this policy was implemented, it encouraged owners who were subletting their apts continuously to sell after the 2nd year. Consequently, the number of sublet apts dwindled to less than a handful, to 3 or 4.

The board decided in 2006 to amend the 2/5 policy to 3/5 (three consecutive years out of five) policy to allow shareholders more flexibility. At this time, the board decided to increase the sublet fee. This more flexible policy has not increased our sublets.

Today, our co-op is 100% occupied by our shareholders.