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board meeting confidentiality - new board member Mar 25, 2008


I am a board member, and our board president has stated that we have an informal confidentiality policy that must be followed. what is the official confidentiality policy for board members by law? He argues that ANYTHING said at a board meeting should not be shared with shareholders. I think this is a violation of our rights and of shareholder rights. Certain things like shareholder information, liability concerns, etc. are not for public consumption. But other issues that are already public can be shared and in fact I believe should be shared. Our by-laws say nothing about confidentiality - what is our legal responsibility to confidentiality, and what can and should be shared with shareholders?

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Confidentiality has several ramifications as to shareholder information, contract information, board member information (e.g.: voting, opposed or for), salaries, etc.

Here are some references.



Just for starters

http://cooperator.com/articles/1491/1/Board-Resource-Guide-Etiquette-for-Board-Members/Page1.html

http://cooperator.com/articles/1069/1/The-Need-to-Know/Page1.html

http://cooperator.com/articles/1096/1/Disseminating-Information/Page1.html


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Can/Should Coop Set Minimum Sales Prices on Apartments - Newbie Mar 23, 2008


Our coop board is considering setting minimum sales prices for apartments in our building. Has any other coop done it or considered it and decided not to? Is it legal? Do you have to have something in the proprietary lease or bylaws permitting such a thing? Under what circumstances is it desirable/justifiable? How do you go about setting minimum prices? What do you do if the shareholder can't find a buyer willing to pay as much as the minimum price?


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This is an old topic that you should be able to find prior opinions.

My personal opinion is prices should be dictated by the market. Many will disagree with this point of view. However, you need to be realistic and allow shareholders continue their lives. Additionally, all circumstances are different and some people will be willing to lower their price according to their own interest. A co-op only needs worthy potential shareholders who are able to pay the maintenance, share mortgages, and any assessments when applied and who are willing to live according to the PL and house rules. Yes, you may say that a lower price will have an adverse effect on the co-op, the quality of life and all the wonderful things you want to say. But the buttom line is MARKET and ECONOMICS dictate the price.

AdC

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I agree with the two others -- let the market decide.

That said, if an offer comes in that seems awfully low, the board can buy the apartment instead, at the same price, and then put it on the market for what the board believes is a fair price.

This doesn't prevent the sale (so the buyer doesn't have to wait for her money), and keeps the average apartment price in your building high.

Of course, you'd better be darned sure you can make a decent profit on the re-sale. An issue of Habitat a couple of months ago addressed this very topic (also called Right of First Refusal). The recommendation in the article (as I recall) was to make sure you could make 20% profit on the re-sale.

Of course, check with your lawyer and your accountant before taking this road.

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We have 550 units. On average, 30 units change hands each year, including studio, one bedroom, two bedroom, two bedroom large and three bedroom. Some are improved, e.g.: upgraded while pothers are quite “old” in tone.

Some are as neat as can be while others have seen some mileage.

Some are on the 1st floor while others are on the 25th floor.

We track every sale and can show the average price per share for all units as well as the average price per share for each type of unit.

Basically in our building, there is a 20% spread in each year between the high and low of each type of unit, without taking into account the location of the unit, e.g.: height in building. facing east, west, north, south.

So who decides the price?

If an average unit turns over for $450,000. how much does the co-op have in its reserve funds?

Does fiduciary responsibility allow investing the funds in the risky real estate market?

And to what purpose?

Does your co-op charge monthly maintenance based on the value of the unit or the shares? Me thinks it’s based on share ownership.

Does the board have spare time to evaluate offers?

By now, you must come to the conclusion that I feel it isn’t a worthwhile pursuit for a board that is underpaid and has other issues to face.

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Excellent questions all, Ben. My co-op has only about 15% of the number of units as yours, so it's much easier for the board to stay on top of sales. I'll aim to answer your questions.

>So who decides the price?

See answer to your last next-to-last question, below ...

> If an average unit turns over for $450,000, how much does the co-op have in its reserve funds?

That's an apples and oranges question, Ben. One guideline to the minimum amount of reserves is the dollar figure three months' maintenance. It has nothing to do with the price apartments are selling for.

> Does fiduciary responsibility allow investing the funds in the risky real estate market?

Risk -- that's the big question. A wise gambler never bets more than he can lose. And certainly the market is less stable today than a year ago.

However, if a sale price is so undervalued that the board essentially gives up the change to make $40,000 (that's buying an apartment for $160,000 from a shareholder who wants to move asap and then selling it for $200,000), is the board wise to abandon an opportunity enrich the corporate coffers? There's no right or wrong answer.

> And to what purpose?

There are two. First, the real estate comps (those are the comparative sales prices that sellers and buyers research to determine a fair price for an apartment). Let's say the apartment above mine -- same layout, in roughly the same condition -- goes on the market for $500,000. The seller wants to start a new job in Boston in two months. She gets no offers until two weeks before starting her job, and it's for $385,000. Having bought years ago for less than half that price, she accepts the offer -- she'll make a nice profit and have cash to close on her new Back Bay home.

Then I go to sell three months later. Believing my apartment worth at least $490,000, I'm piqued to find out that my neighbor sold hers at such a low price because it undermines my negotiations. As a shareholder, I can reasonably be annoyed at the board for allowing the corporation's shares to have traded at such a low price. But I'm stuck.

(The corollary in the world of publicly-traded stocks is essentially the same: A company buys back its stock when it feels the share price is too low, then holds on until the price goes up and sells them again. At a profit.)

The second reason is to do what businesses do: Make money.

> Does your co-op charge monthly maintenance based on the value of the unit or the shares? Me thinks it’s based on share ownership.

Exactly. On shares. And that's one of two ways we determine the value of an apartment: the share price of the sale. The other way is by comparing apartments in a line. If by both of those checks the sale price looks far too low, the board can choose to step in.

Then by using those two pricing methods (share price and line value), the board sets a selling price. Since the board is in no hurry to sell (it's out only the maintenance it's not collecting), it can wait until someone meets the price it asks. (In my building, the highest prices tend to go to the sponsor, who waits until someone meets his price.)

> Does the board have spare time to evaluate offers?

Again, yes, because our building is much smaller than yours.

To wrap up, there's no absolute answer on this. For a corporation with plenty of reserves and a healthy operating fund, there is little need to make money on the side. But even if the corporate accounts are a little shallow, the board has to take into account the tolerance of shareholders for such a risk.

The financial sophistication of shareholders varies greatly from building to building, and even within buildings, not to mention the sophistication of the board members themselves! That's why it's key to get the corporate counsel, outside accountant, property manager or managing agent, and other professionals involved in any decision of this sort.

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As noted, it’s a free market that enters equilibrium when buyers and sellers agree on a price.

If you wish to thwart the mechanics of a free market are you prepared to underwrite the costs of those who wish to sell regardless? Will you create hardship waivers, e.g.: family death, divorce, etc.? Will your co-op corporation buy the apartment of those who wish to depart?

Who will set the target price? Who will evaluate the target price? Will it be based on price per share per type of units or price per share regardless?

What if someone asserts that the unit did not sell or could not see at a target price because the board of directors failed to maintain the building in suitable physical condition?

Quite frankly, the board has enough to do without setting or meddling in the market price equation.

In our building, the units are free to sell at whatever the market can negotiate.

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1 managing agent in a coop - big al Mar 22, 2008


This is from today's NYT. There must be only one manager in a coop according to the Business Laws. Question is what are the:

Pros?
Cons?

all input welcome.

Can Sponsors Employ Their Own Managers?
By JAY ROMANO
Published: March 23, 2008
Q In a co-op, must the managing agent for the co-op and sponsor-owned apartments be the same?

A “This is an interesting question because it may seem, in practice, that the law on the issue is ignored,” said Andrew Brucker, a Manhattan co-op and condo lawyer. He said that under a section of New York State’s General Business Law addressing issues governing the conversion of rental buildings to co-ops, all apartments occupied by nonpurchasing tenants must be managed by the same agent who manages all the other apartments in the building.

Yet many sponsors who own unsold apartments have someone else who deals with those tenants. “The sponsor typically hires someone to collect rents from the tenants, to pay maintenance to the co-op and to deal with any tenant problems they may have,” Mr. Brucker said. “Although the law seems to indicate that there can be only one managing agent in a building, this is not the way most buildings with nonpurchasing tenants operate.”

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This has been discussed before. Please try to search for the same topic.

One manager is okay when dealing with the beginning of the conversion in which sponsor is majority and according to the conversion plan has not totally given up his control of the management over the co-op. However, once the sponsor conveys the administration to the co-op or board, then the sponsor may retain its own representative or agent to deal with the administration of those apartments still being sold or that remain rented in the building. This agent acts of the sponsor representative and landlord for the sponsor's tenants. The agent may be a board member and interact with the new management just as any other shareholder.

AdC


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I know you want to justify this but it is not legal.

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In our building we have a building manager for the overall well being of the building.

We have rental units, owned by the sponsor. The quantity has dwindled from the high point many years ago of 150 units to a current low of 12 units in a 550 unit building.

The management of the rental units has always been the purview of the sponsor and the sponsor’s managing agent for overseeing rental units.

Kindly note that there is a difference (not just a nuance) in that the co-op's building manager manages the building and the rental agent manages the rental units within the building.

If there is an issue within a unit (unless it is a clear emergency, e.g.: water flood, power failure) the renter contacts the rental agent who in turn contacts the building manager.

For us it is quite clear, both for the shareholders and the renters.

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I know a woman who rents in a very exclusive coop in Forest Hills and she has a different managing agent than the coop and has for many years

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one pro is that , if you have one managing agent, you have more efficient and direct communicaton concerning all aspects of apartment maintenance and repairs. This makes problems that are re-occurirng in a building discovered faster.

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Our building manager does not have time, nor is the building manasger paid, to deal with renters. The renters are not our co-op’s owners, but rather the lessee of the owner’s property. The legal pathway is from the co-op via the sponsor or owner to the renter, not directly to the renter.

There is NO contract between the co-op and the renter.

When a renter misbehaves or breaks the house rules, we notify the owner / sponsor. When the renter has a problem with a kitchen cabinet, the renter is advised to go to the owner / sponsor.

Why interpose when there is no legal standing?

To no one in particular, we all need to think through the legal ramifications of our quick assessments posted herein.

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Can Sponsors Employ Their Own Managers?
NY Times, Sunday, March 23, 2008, by Jay Romano
quote
Q In a co-op, must the managing agent for the co-op and sponsor-owned apartments be the same?
A “This is an interesting question because it may seem, in practice, that the law on the issue is ignored,” said Andrew Brucker, a Manhattan co-op and condo lawyer. He said that under a section of New York State’s General Business Law addressing issues governing the conversion of rental buildings to co-ops, all apartments occupied by nonpurchasing tenants must be managed by the same agent who manages all the other apartments in the building.

unquote

In point of fact, HarryM, in my interpretation, is not suggesting two managers for day-to-day operations of the co-op. In point of fact, the building manager (one only) supports all “owners”. In this case there are shareholders who own and occupy and there are owners who by virtue of a contract (by-law perhaps) are allowed to lease (rent).

The coop has one manager for the entire property, regardless of who owns.

If one is suggesting that the owner / sponsor has a separate set of operating rules, maintenance, rules and regulations, etc. then I would agree that the duality is not allowed.

But if all are bound by the same by-laws, proprietary lease, house rules, etc, albeit the owner / sponsor imposes additional restrictions which the owner/ sponsor enforces on renters, then I agree there in no conflict.







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and they are far more credible than you. Sorry, you are wrong. a competet managing agent should be able to handle all units in a building. Are you perhaps not competent? what is your real issue here?

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In reading this thread, I am trying to understand the penchant to burden the building manager with the units of the sponsor/owners.

Forget sponsor units for a moment and ask if the co-op permits rentals by co-op owners.

Again from the notes posted by others, the thought is that the building is responsible for the well being of the entire building and all units regardless of occupancy, e.g.: shareholder, renter from a shareholder, renter from a sponsor.

My own experience is that I would agree with this line of thought.

However, I would further offer and tend to agree in reading between the lines that rental units in general whether rented by a shareholder or the sponsor pose additional challenges.

I would hope that we all agree, as has been asserted by one writer in this thread, that the legal contract is between renter and unit owner, whether shareholder or sponsor.

Further to the above points, there is one corporation that owns the building, the co-op corporation wherein shareholders and the sponsor have an ownership interest.

Thus, the building manager, whether a hired firm’s representative or the employee of the co-op has overall management responsibility for the building reporting to the board of directors.

Yes, I would agree with the NYTimes article if the article’s writer is connoting that there cannot be two managers each responsible for a segment of the buildings’ physical operation and management.

Maybe I’m dense, but I don’t see the issue if one accepts the premise in the paragraph immediately above.

However, I agree with the other points made in this thread that the interior of the co-op unit is the property of the owner, either individual shareholder or sponsor. Thus, unless it is an emergency, where life or property is at risk, any requests from a unit’s occupant needs to flow via the sponsor or the unit owner.

Quite frankly as a board member, I do not wish to accept responsibility via my building manager for responding to an occupant’s request in opposition to the wishes of the unit’s legitimate owner, shareholder or sponsor.

The rental agent, whether sponsor or unit owner, is garnering enough funds to cover administrative costs that I do not care for my building manager to accept. Nor do I wish to burden my shareholders with the costs of administering the rentals wherein shareholders and the sponsor are earning a profit.

By the way, we are self managed and have been so for many years and we have an outstanding building manager and long term employee. And let me assert that we have an excellent relationship with the sponsor and a respect for the sponsor; a relationship which is absent the extreme adversarial behavior intimated here in this thread and other postings.

It is a shame that some folks are apologists for the NYTimes and some folks need to proffer a rancor for relationships which they perhaps inherited as fostered or stoked by prior boards.














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Obviously the managing agents hate this law because: it means they might have to actually do some work and have. god forbid, some accountability. . There , by LAW has to be one "entity" working with all apartments/units. Not some strange sponsor entity dealing with "bills " from rental / sponsor apartments. Clean the place fo the sponsor, have strong coop = get the sponsor "entity" OUT 100 percent. How to do it - call the exterminator - ie the Attorney General's office to rid the place of varmits (yes, they really are non-productive and parasitical). I am not being ironic here, This is serious. you want a really solid coop? Get one managing agent! it i your right.

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B/M Breaking By-Laws: Out of control board - AliceT Mar 20, 2008


Our Board has just denied a S/H the right to have a proxy represent him at the S/H meeting. This right of a S/H is covered in our By-laws, and in our 20 year history -- we have always alowed proxy's.

This S/H cannot attend, and has been very vocal on a position strongly opposed by four board members. Two B/M objected and pointed out the law and legal def of a proxy --but they have been ignored.

The By-Laws are a Coops Constitution and is set in place to protect the S/H, and can only be altered by a vote from the S/H.

We know about getting the S/H to vote, but we need more backing. Any advice as to where to turn? A/Gs office? Any contact names.

Thank you,,, Alice

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Folks,

In our co-op, a proxy holder is merely allowed to submit a ballot for the election. A proxy holder, unless a shareholder,does not have the right to address the board or to address the shareholders present. But, see further below.

In an election year for board members, those running for the board are invited to make a three minute statement before we close the time for submission of ballots.

During the "open" board of directors meeting, we do not allow shareholders to address questions to the board or to make statements to the other shareholders, save the “election” statements above.

After the “open” board of directors meeting is closed, we then have a new session the same evening called the “open” shareholders meeting. Herein, any shareholder, and only a shareholder, may address any questions to the board or make any statements to the shareholders present.

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...does not seem to address the fact that a proxy can VOTE for one candidate or other, presumably for the candidate preferred by the shareholder who cannot attend.

This seems like another case of a dictatorial, authoritative board refusing to honor the simple, democratic process on which the United States lives: One person, one vote.

This board belongs in the Stalinist USSR. That's how it's acting. Shame on them.

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Perhaps I did not make myself clear. The voting is an issue but the BIGGER issue is the fact that the Board voted to overturn a ByLaw (it takes 2/3 S/H vote to change bylaw).

The ByLaws are a CoOps Constitution, and isnt it the legal responsibility of the Board to abide by and support the ByLaws.

Futher complicating the problem, the S/H whose proxy was denied, has been very vocal about an issue not popular with the Board. And it would be convient not to have his vote counted.

Recours?

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Now that there has been a bit of an explanation, let offer the following.

In our co-op, we have never changed the by-laws, but we are contemplating a change in the next year.

In this case, our by-laws stipulate that to change some sections of the by-laws, one needs 2/3 vote of the number of units (610 * 2/3 = 407), while for some changes 80% of the shares outstanding (80,000 * 80% = 64,001) are required to vote in favor of the change.

So as to one person, one vote, it really depends on the co-ops bylaws, e.g.: person vs. shares.

For the forthcoming by-law amendment, we will accept written proxies from all shareholders. In point of fact, we will mail a proxy to any resident requesting the proxy in advance of the vote. We will have a three or four day period to provide ample time for the residents to vote. As long as the proxy is signed, the board accepts and tallies the vote.

The board and a significant number of residents are in favor of the change, but we are unsure as to whether we will achieve 80% as required for the change proposed.

Again, one must be clear that having a proxy submit a vote and having a proxy make statements are two different events.

We will provide a recurring number of forums to discuss the issues attendant to the rule change. We will even allow residents to invite a family representative to the discussion seminars as some residents may not understand the import of the proposed rule change, but when the voting dates are set, the proxy is to be cast without any dialogue.

Your co-op and your board may operate differently, but as long as the rules for voting are followed, there isn’t much to say. One may question the behavior of the board, but if the board acted within the board’s stated rights, the vote stands.
= = = = = =
To be a bit pedantic co-ops are corporations and have duly elected boards of directors. Thus, boards are empowered to act within the by-laws established for the corporation and within the boundaries of fiduciary responsibility.

Dialogue is nice, but the board need not adopt the vox populi, if the board opines otherwise.
= = = = = =

On the other hand, one can lobby to submit candidates to replace the board at the next election.

= = = = =
Here is what happens when a co-op attempts to change the rules and applies the wrong equation:
http://www.anateisenberg.com/files/400519/bergen-county-news-Jun2006-4.html
Scroll to the paragraph:
Law On The Side Of Cliffside Park Residents
The details are scant, but do search some more.

= = = = = =









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Dear Ethel, This is not about CHANGING an ByLaw. The Board voted to ignore an existing ByLaw that clearly states that a S/H may appoint a proxy to represent him at the S/H meeting. We have had proxy's attend meetings for 20 years.

The ByLaws cannot be overruled by the Board. They are the Coop constituion and can only be overruled/change by 2/3 vote of the S/H.

Also, the issue the absent S/H wants to vote on, is unpopular with the four Board members who decided to take this illegal action.
AliceT

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Folks,

Unless the by-laws stipulate, I don’t see how anyone much less a proxy has the right to voice an opinion at the co-op’s board of directors meeting save voting for or against a proposal or voting or withholding a vote for a candidate in accordanced with the shareholders wishes

See this URL, which is a “voting” form:
http://www.thebrownboard.com/og_mb_ups_coop_exhibitg.pdf

See this URL which discusses the participation of the proxy as a voter:
http://www.nytimes.com/2006/04/02/realestate/02home.html?fta=y

In my view and my interpretation, proxies are for voting not for dialogue.

If the referenced co-op permitted dialogue at prior board of directors meetings and then suspended the ability of shareholders or proxy holders to offer commentary at this meeting that is the board of directors’ right subject to a caveat or two.

If the by-laws permit the dialogue and the dialogue is suspended, then the board is wrong.

If it was just a historical amenity or convenience wherein the board of directors permitted open discourse, then the board has the right to suspend any dialogue. One may be agitated by the board’s change of agenda, but there is not much standing to force the board to again allow open discussion.

It seems to me that the crux of the interchange herein is that a co-op board enacted something that some shareholders don’t like and if I read correctly disallowing a vote cast via a proxy.

The only option is to judge whether the board failed in its fiduciary responsibility in which case there is legal recourse.

For instance, if the board refused to accept the legitimate proxy of the opposing shareholder, then that could be a rationale for legal recourse.

The other option is to vote to replace one or more members of the board at the next election.

Again, voicing opinion other than by “silently” casting the proxy vote (for or against) is the legal extent of proxy’s participation.

- - - - -

After all is said and done, if the board refused to accept the shareholder’s vote via the proxy, then the board is wrong in the eyes of the law.

If the board of directors failed to provide printed proxy statements or the ability to create one’s proxy statement, see URL sample, then the board is wrong.








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Restricted by PL - AdC Mar 17, 2008


Really? Did you read your proprietary lease and found the exact item where such a restriction is stipulated?

As ST told you, you may mail it to the shareholders, do what politician do by standing outside the elevators in the lobby or mailboxes and meet residents or post your own flyer on bulletin boards if one or several are available throughout the buildng.

You may enlist some neighbors who may be willing to spread the voice on your ideas for the board, etc., invite people to your apartment or meet people over the laundry room.

Finally, have a good presentation for the night of the elections so that co-shareholders know why you are running, what attributes or behaviors characterize you as a team player, effective delegator or good collaborator. Remember 1/4 of the people are leaders; 1/2 collaborators and 1/4 empathizers. You need a good blend on the board to have an effective board.

Good luck on election night!

AdC



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Thanks for feedback.

To reply to one question, it is the house ruler that prohibit the distribution of any materials directly, e.g. without going through the US Mails.

In addition, those running for public office are not permitted to distribute items on premises.

As a matter of fact, some politicians visited our outdoor pool area a few years ago and the residents complained. Thus, there are no more solicitations at the pool.

Yes, there is a bulletin board where residents may place postings.

And for further clarification, the existing board does not solicit in the lobby, mailroom, hallways, etc., or via materials under doors ... and as far as I know, the existing board has never used public handouts or materials under the door. So, there is no precedent to use as leverage.

The board's mantra seems to be "quality of life" is paramount. Thus, outdoor athletic court lights are deactivated at 10 PM, and there is no construction of any type permitted in any unit, or even in the common areas of the building or property, outside of Mon. to Fri, 9 AM to 5 PM. These no-noise restrictions are imposed on the eve of religious holidays.


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Running for the board - RobD Mar 16, 2008


Our building’s proprietary lease does not permit any handouts at any time to shareholders, e.g.: under apartment doors, in the lobby, on the property, etc.

The existing board when it runs for reelection, although there has been some turnover, e.g.: on person per year over the last five years (seven person board) posts the names of all incumbents who are running again and all who have submitted their names for consideration on the building’s bulletin board and then it puts a letter under all apartment doors with the same information, including a brief resume of each person running for the board.

As I wish to run for office, I have asked the board for permission to put campaign information under the doors.

The board’s response to multiple requests has been that the proprietary lease does not permit any distribution of materials at any time.

In fairness, the board does not lobby for reelection via any materials under any apartment doors. Rather, shareholders who are aligned with the existing board members will solicit shareholders, but these folks do not distribute any information.

My alternative is mailings to the shareholders.

The building does not have a regular newsletter with chit/chat items. In fact, there is no co-op newsletter. Rather the president of the board, a member of the board, the board itself will distribute information pertinent to taxes, assessments, maintenance costs, capital expenditures, insurance, etc.

Notices regarding the annual shareholder meeting are mailed as required by the proprietary lease.

Sometimes, information such a fire alarm tests, elevator tests, AC plant activation, heating system activation, pool applications, health spa annual membership, etc. are posted in each floor’s elevator lobby.

What are my options without violating the proprietary lease?

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Dear Rob, sounds like they dont want new members. We resorted in mailing out letters. Also, we now have an extensive Email list, and have become a fairly powerful group who forced the Board to make changes. (firing a Super that was caught stealing, but Board members protected)...
Good luck... AliceT

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mail it. spend the money. However, in reality they cannot stop you from putting notices under doors. Also you can stand in the lobby and meet and greet people and hand them a flyer and bio on yourself. go for it!!

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Yes, I did put something under the door of a resident and a complaint was made to the management office. Then, I received a letter from the attorney that my lease could be terminated if I put anything under the door.

This is why I put a question here.

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my friend,

you clearly has an A-hole on yoru Board if youa re gatting a lawyer's letter onver such a trivial thing. you need to get on your coop board - you really do. for the record, it is important you respond in writing to to that letter claiming that the Board puts noticed under doors (didnt you say they do this?) and citing freedom of expression rights. i do not think they can impose such a restrictive law. It sounds ridiculous. You can also call NRDC to check on this.

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Management Co. Loan Fee - Alexis Mar 16, 2008


As a brand new board member, just elected, I have a question.

I have been inquiring about the process to refinance our buildings existing mortgage.

I have been told that our management company can orchestrate this on our boards behalf, which we would like, but they will charge us a fee to do so.

What should we expect to be the charges for this service? Is this typical?

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About four years ago we decided that the hassle of continuing our HUD insured mortgage was not worth the effort, e.g.; special accounting forms that cost us via our CPA firm, reserve fund under control of HUD, numerous clerical errors by HUD, etc.

However, we were not really refinancing. All we wanted to do is rollover our existing mortgage without extending the life of the mortgage.

So, we contacted a number of banks and asked what it would take to convert, e.g.; interest rate, balances, relationships, etc. Oh, we did decide to seek a line of credit and asked for the terms as well. The line of credit is employed only to finance capital expenditures before the yearly assessment replenishes the coffers.

Then based on the terms, our board selected a bank and we converted, closing the HUD guaranteed mortgage and obtaining a new mortgage ending on the date of the original mortgage as well as the line of credit. Our outside counsel handles the transaction.

= = = = = = = = =

Now a nearby building had a $7,000,000 mortgage when they converted to co-op 25/30 years ago. In turn, they refinanced the mortgage to $10,000,000 and extended the term. About a year ago, (we can speculate as to the financial acumen of the board of directors), they found themselves in dire straits and needed an infusion of capital to underwrite long neglected capital projects, e.g.: roof, window replacement, driveway replacement, etc.

So they went and a refinanced a second time (third mortgage) and in doing so, they were required to pay off the second mortgage, about $7,000,000 remaining, pay a prepayment penalty of $2,500,000 and then the bank required $8,000,000 of the remaining proceeds to be placed in escrow, only to be released by the bank for authorized capital projects.

So poor management (e.g.: bad decisions by the board of directors) put the building into such a predicament that the bank is now essentially calling the shots.

So just a word of caution in any “refinancing”, ya need a long term plan to eliminate all debt. For a product producing corporation, capital infusion equals new product equals more income equals paying off the debt. In an apartment building, there ain’t no way to build more apartments to obtain more revenues.

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You can easily figure this out yourselves. For a start, call National Cooperative Bank. They offer very good deals and specialize in this area. Get some ideas of figures, then call some other banks. . Also you can Google National Cooperative Bank for more info.

National Cooperative Bank : Cooperative Housing Specialist:
New York: Mindy Goldstein
(212) 808-0880

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Patriot Act and co-op shareholder list access - Paul Mar 15, 2008


Has anyone encountered a hurdle that the co-op is declining to allow access to the shareholder lists, citing privacy requirements imposed by the Patriot Act?


Has anyone been faced with a partial or complete prohibition? For example, partial only names are shown, only last names shown, displayed without address (some residents have an alternate address or an alternate primary residence), phone, SS#,


Does the Patriot Act trump the proprietary lease?


Just wondering....

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your posting is completely wacko. ok first of all - ss numbers should not be on any list. what are you asking exactly?

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Your annoymouse posting is out of line. skip your editorializing and just answer the question, or skip your response.... Also no annoymouse postings!!!

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It's just my opinion but why be concerned with the Patriot Act unless you have reason to think that SHs in your coop are involved with terrorist groups or activities?

Your proprietary lease says what documents your SHs are entitled access to. They generally are allowed to the SH name/address list as long as they act in good faith and intend to use the list for a valid coop purpose. But SHs' Soc Sec numbers SHOULD NOT be given to anyone at any time.

It's easy enough to find out what SHs live in a building by looking at the doorbell or mailroom directory. Some coops send all SHs a form and ask them to indicate if they do not want their phone numbers and/or e-mail addresses given out. Some coops send a form to just non-resident SHs and ask if they want any of their info left off a SH list that may be given to other SHs since they live in other locations. We all still have our right to privacy.

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Can't understand why anyone would want such information on shareholders to be MORE readily available. It would be interesting to find out from the orginal poster why he asked this question.

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J51s... - ABB Mar 13, 2008


Tried to post this back when the board was down. Yay, it's back up.

We put in a new elevator about a year ago. Our managing agent didn't file a J51 doesn't know if we'd be eligible or not for it. Based on some web-reading, it looks like, for Manhattan, if the units are valued over $40k, the building may not be eligible. Is that correct? Has anyone succeeded, in Manhattan, in getting a J51 abatement? Does your managing agent handle it or do you need a special lawyer to file? Thanks for info or suggestions on how we should follow up.

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contractors in sponsor apts - hanah Mar 12, 2008


our Super has started making private arangments with the sponsor to renovate/ hire subcontractors to work on the sponsor apts when they open up for rental. These jobs do not seem to have permits and the contractor may be unlicensed to do electrical, plumbing etc. What can we do and why is allowing this to happen not in the best interests of a cooperative?

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If your Super is doing any of this on co-op time, when he or she is acting as your paid agent, this could be a liability problem.

If it's being done on his/her own time, there could still be problems...

BTW, do your House Rules or Proprietary Lease address the issue of permits and licenses?

Contact your co-op counsel about this issue ASAP.

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Where is your management company? They should be taking care of this for you.

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