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No Subject - Anonymous Apr 10, 2007


Do all coops have nominating committees? and is this a way of the board obtaining as much control as possible over the coop?


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How do you recruit your board in your co-op?

First, one should learn from politics. Some forms of democratic governments throw out their legislative bodies if the elected president and the legislative body come from different parties. This is done to eliminate the wasted time arguing party issues.

Second, a board may look for shareholders who may exhibit certain characteristics: discretion, good judgment, vision,initiative and show some preocupation for the property as such. (No need for PhD's or extremely impressive credentials - I know many "well educated" individuals that you question their practical sense).

Obviously, to wait for surprises at the annual meeting is foolish for a board. You may get a shareholder who may try to advance its own agenda, or you may get a shareholder with mental issues (certified, of course!) attempt to run for the board. There are many shareholders who may not know these individuals and when they present themselves they may sound impressive. So, shareholders may be willing to give them a try to the detriment of the co-op.

Obviously, a Nominating Committee should not be controlled by the board, and the committee should do the most to make sure that information on each individual or even informal meetings are held to promote all the candidates. However, from the many years on the board, I think that a good board should try for sharholders with the right skills sets to make a productive board member who will bring advancement rather than division to the corporation.

AdC


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thank you. Do most bldg's have term limits for President, etc....?


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Speak with your co-op counsel as to how you go about instituting terms if this is perceived as desirable, whether an Amendment is required or just a simple Resolution of the Board.

Now... terms may be good or may be bad. As they say, every action has an equal but opposite reaction. Some presidents and board members do a great job. Consequently, if they like to serve, then you may be at an advantage. However, as long as you have new members who get into the the board and are trained you have succession. Contrary to what many participants of this chat room say, presidents and board members are not all on ego trips, or are controlling. So, each situation is special and temrs is just a matter of preference.

AdC


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> Join the conversation Comments (3)


Your by-laws will tell you if term limits already exist. If they don't and you want them, you'll have to amend the bylaws, which probably requires a vote of all shareholders.
I would suggest that before you go that way to limit only the terms one can sit in each office -- that is, one could be president no more than three terms, but membership on the board can be six years, or even unlimited.
Remember that the more vacancies on your board, the more volunteers in your building you'll have to recruit for this thankless job.


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We have a shareholder who left because of health reasons, got the operation, recovered and was re-elected to board for a two year term. And there are some shareholders who better not even think of running for the board again. They will be met with serious protest. But so far we don't have terms limits.


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Term limits can be good in some cases. New board members can bring fresh ideas/perspectives to the table or weed out self-serving or ineffectual members. The best board is a mix of new and old. Those who aren't new provide stability, experience and continuity which every board needs.

Term limits can be bad too. Board vacancies don't always prompt people to run. What if no one runs? What if a few people get elected as a slate and have majority control? If they're new and don't know what they're doing, it can be a disaster - especially if they share a personal agenda and want to do things their way and get what they want.

Term limits can also be a problem in smaller bldgs. Board members may try to get certain people to run. They may convince someone but if that person's heart isn't in it, that won't make for a good board member. It's hard to get an ongoing flow of new board members in smaller bldgs. If you know most/all of your shareholders, think about the ones who probably wouldn't run because they're:
-- not interested enough or don't want the hassle
-- are mainly focused on their work/career
-- often work late or travel a lot on business
-- have many other obligations (e.g. family)
-- may be very ill or elderly

Then there are those who don't live in the bldg...aren't (in your opinion) qualified or whom you don't want on the board...are very new to the bldg and (in your opinion) should get a better "lay of the land" before they run for the board...never come to an annual meeting or even send in a proxy. There may be a few who own two or more apts. After you eliminate all these people, you may have a handful who could be potential board candidates in any given year - if they want to run and, of course, they'd have to be elected.

Shareholders in my bldg (60 apts) voted down term limits a few times. Almost all felt it's unnecessary. But as AdC said, each situation is special. Whether a bldg is large or small, it depends on the board, how effective it is, and what the bldg needs.


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AdC makes some good points, but I've seen it work in the opposite way. In a coop where I used to live, the board essentially chose whom it wanted to fill vacancies. Then, at the annual meeting, the board nominated a slate. It happened amazingly quickly, as if it were an auction. Like this:
BOARD PRES: I open the floor for nominations.
FRIEND OF BOARD PRES: I nominate the slate.
BOARD PRES: All in favor?
And it was done. Not even a motion to close nominations, let alone a call for others to run.
So if there's to be a nominating committee, I agree with AdC that it should exist separate from the board.


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In addition to believing in independent co-op nominating committes, I believe in drumming up the business for the board. I speak to shareholders who have demonstrated many of the following traits and/or virtues: independent thinking, concern for the building, integrity, ethics, responsibility as a shareholder, and good judgment. I don't recruit among FRIENDS. In fact, I can say, as a board president I have NO FRIENDS.

Why do I recruit members for the board?

1. I don't want to come to an annual election with SURPRISES.

2. I would like to see a board composed of shareholders who exhibit the outlined traits and/or vitues so that their talents and decisions can be put to work, free from the influence of FRIENDS, who exercise prudence and fairness at the time of decisions, a group of shareholders who will work in harmony for the advancement of the co-op if elected.

3. I would rather present 5 good candidates for shareholders to select for 3 positions, but sometimes reality is that good people may not be available that year for personal reasons; but if I were to have them, I would present them all. Why? because it gives variety for shareholders to select from.

Two problems I had to face last year:

1. The investor who only had 10% came to the annual meeting with a second representative to be elected. The investor got one position. The second representative was outvoted because the board (to the dismay of the Habitat's forum readers) collected proxies to ensure a quorum and that business would be transacted and proxies were voted against the second representative.

2. A shareholder who has serious health issues and does not exhibit 90% good conduct and judgment submitted its name. Well, there were many new shareholders who do not know the person who casted a vote for this individual. Having a person on the board with such issues would have been as explosive as a roadside bomb.

AdC


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Assessment for Bldg. Improvements - Anonymous Apr 10, 2007


I sit on the board of my Bldg. and we just passed an assessment to the shareholders that have caused quite a stir. I happen t agree with the shareholders but do not want to tell the board this.

Th cost is too high and the approach was wrong.
The job should be done on a lower scale and in phases. How do I get theother members of the board to change things before the assessments begin?


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You should speak up and not let the board dictate how shreholders are to spend their money


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How many members does your board have? How many minutes, hours and facts did you gather to arrive to the assessment, the size of the assessment and the way the job is to be accomplished?

Obviously, a board should have carefully considered all the angles of the problem to be resolved and what is the impact of the assessment on the general shareholder population. In fact, board members may be also exclaiming Ouch!, but may have more facts on hand.

Unfortunately, shareholders have opinions and plenty of Ouch!, but may not know the full implications of the need for assessing.

What do you need? Articulate the need for the assessment and why the board has considered the assessment and the way the work will be done as the best solution to the problem.

Good luck!

AdC


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thabk you for the response. many shareholders in the bldg have approached me with these very same questions. the shhldrs have also submitted a petition to call for an open mtg prior to the first assessment in May. Are they entitled to know all of this? I would think so

They are also asking if they make the first payment of the year long assessment(maybe more)does that make them liable for the rest. On the flip side they want to know what the repercussios are for not paying and placing the money in escrow until sorted out.

your thoughts.....


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First, read or review your By-Laws regarding the power of the board to fix the budget and any additional amounts required to cover repairs, etc....Obviously, there is a need to refer to your documents so that people understand that the power of the board.

Second, a board out of courtesy should be upfront with shareholders. An open shareholders meeting helps dissipate any problems with perceptions. The board should put the cards on the table relating to the decision and shareholders, no matter how much lamentation and grinding of teeth they may do, will have to accept the decision. After all, shareholders elected them to do the HARDBALL decision.

Putting your assessment in ESCROW is a NO!!! Read your documents and find out if there is such an animal available in your case.

Again, BOARD members (who work for the advacement of the co-op) are elected for the purpose of breaking their heads in good faith to advance the business of the co-op by taking the required decisions, no matter how unpleasant or umpopular they may be. Shareholders have an obligation to question and find out understand the decision Also, they have the right to vote for the right board members and nominate themselves if they feel they have the character to make decisions that may not always be applauded.

Finally, a board that communicates and overcommunicates will get their point accross even when they know their decision may be unpopular. An open shareholders meeting is logical and good for the co-op when decisions that affect the lives of shareholders are on the table.

AdC


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I am the President of my board and although the board most probably can do what they want, if they are not polling the shareholders concerns and being prudent with the cost associated with the job, this should be raised by a shareholder as a representative of the non-board members then


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This is nonsense! But take it personally, but the main thing as a board member is to know what your responsibilities and obligations are as a director.

So, you assess because you have a fiduciary responsibility to (1) keep the co-op above water (2) keep the property in good repairs.

Now... part of the equation is to communicate. If boards do not communicate you raise the suspicious flag. So, present the issues as they are. If you are not elected again, SO WHAT!!! You took care of your responsibility.

A problem wih many boards is not knowing how to state regularly what is happening and the challenges that the board faces. Part of the problem is BLOWING YOUR OWN HORN and prepare the way for incrases, assessments and any measures that require tough decisions.

AdC


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This is nonsense! But DON'T take it personally, but the main thing as a board member is to know what your responsibilities and obligations are as a director.

So, you assess because you have a fiduciary responsibility to (1) keep the co-op above water (2) keep the property in good repairs.

Now... part of the equation is to communicate. If boards do not communicate you raise the suspicious flag. So, present the issues as they are. If you are not elected again, SO WHAT!!! You took care of your responsibility.

A problem wih many boards is not knowing how to state regularly what is happening and the challenges that the board faces. Part of the problem is BLOWING YOUR OWN HORN and prepare the way for incrases, assessments and any measures that require tough decisions.

AdC




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>>"You should speak up and not let the board dictate how shreholders (sic) are to spend their money."<<

This misconception is one of the toughest parts of being a board member: the idea that owners somehow don't have to pay for the maintenance and upkeep of their own property!

On the contrary, the reason a board exists is to determine just how shareholders' money will be spent to keep their investment safe, in good condition, and in a state to increase in value.

The board does not "dictate," Anonymous, it makes decisions on behalf of shareholders -- the very same shareholders who elected them. If you don't want others to decide how to maintain the property you share with them, either get a seat on the board or sell and buy a house.

Finally, remember that board members are shareholders too -- they are subject to the same assessments as everyone else.


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If you, as a Board Member, act outside that venue with your concerns -- i.e., as an "agitator" siding with other Shareholders -- you will end up alienating the other members of the Board, and could possibly split the whole co-op.

Do you really want to live in such a poisonous environment? If not, I strongly suggest you make your best case TO THE BOARD for handling the assessment differently -- and, if you cannot, that you resist supporting efforts to subvert the Board's decision. As a Board Member, your responsibility is to the health and safety of the co-op as a whole. If you cannot convince the Board of your logic, try discussing with the individual members their reasons for supporting the assessment; they may change your mind and/or help you better understand and support the Board's point of view.

Alternately, you could try to help the Board find a point of compromise between its position and that of Shareholders who are not on the Board (just keep in mind, such Shareholders have not been privy to ALL of the facts, and to the Board's deliberations, and therefore will not have completely informed opinions).

But I urge you not to foment a "palace revolution" -- that will only have really bad consequences, and it could take your co-op years to recover. Work towards consensus, always.


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inappropriate fees - frustrated Apr 10, 2007


Thank you all for this good guidance.

We did everything suggested here: wrote the letters, sent digital photos, demanded (to no avail) the plumbers' report, requested mediation (but received no response), stated we would take legal action and finally consulted an attorney.

Our conclusions to date:

-We can't force the board remove the charge without taking the coop to court. Court & attorney fees would likely far outstrip the sum in question.

--We were advised, alternatively, to either file a claim with our homeowners' insurance, or to pay the charge and to try to recoup the funds in small claims court. In the latter case, we're afraid we'll find ourself unevenly matched, against the corporation's attorney.

Certainly seems to suggest a need for "abusive board" legislation.

Further suggestions very welcome!




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mediation - firtinella Apr 10, 2007


You were right, all. The board refused. Looks like we're headed to court.

Thanks, anyway, for your good advice.


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Do you use specialized attorneys? - Fred Apr 07, 2007


We have an attorney that can handle pretty much anything, but we're doing some construction work and our board wants to engage a different attorney just to review the contracts of the engineer and construction company. Our attorney says reviewing the contracts is not a problem for him. Do we really need someone who specializes in construction just to read these contracts? Or is it better to stick with the attorney with whom we already have a relationship?


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We have a house attorney who handles closings, letters to shareholders, modest legal research, those in arrears (admittedly this is a partly sum as typically we are but $6,000 in arrears in a 500 unit high rise), ongoing contract renewals.

For some forms of litigation, e.g.: another building, next door, we employ another attorney, the municipality, etc.

For labor issues, e.g.: a new union or new union contract, we employ a labor attorney versed in NLRB activities and laws.

For capital improvement contracts we use an attorney, who himself, is a trained engineer.




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sponsor or investor - Jack Apr 06, 2007


The unsold shares in our building were sold this year.
Is the new owner a "sponsor" or "investor" If an investor
do they have the same rights as the original sponsor. I.E.
voting for officers of the board at election.

What rights does he have? He has no input in the building and gives no help to the hard working board who have their day jobs too. How can we insist on some help from them?


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Jack - Our proprietary lease (para 38) says "unsold shares" for an apt cease to retain their character as such if:
1) someone buys them and he (or a family member) lives in the apt, or 2) the sponsor/original holder(or a family member) lives in the apt himself.

The new owner becomes a regular "shareholder". He doesn't have any more/less rights than the others do, and you can't force him to help the board. If he wants to help the board, he has to be elected to the board, or on a committee that reports to the board, if you have committees.

If someone buys "unsold shares" and DOES NOT live in the apt, only rents it for investment purposes, that's another, more complicated matter.

Also - whoever is the holder of shares is the one who has the right to vote for a board or on any issues. By the way, in most coops, if shares are sold (by anyone), the buyer isn't necessarily the one who can vote at the coop's annual meeting. Whoever holds the shares when the meeting notice is received is the one who can vote. For ex: If the notice is received May 20, a closing is June 10 and the meeting is June 15, the seller votes the shares. The buyer can attend the meeting but can't vote.

In any case, consult your attorney on all these matters. He should check your proprietary lease and other governing documents for what applies to your coop.


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Ask your attorney who should have at least told the board about the sale and given you some idea of the new buyer, and whether the old sponsor still is financially responsible if there is a default of the investor.

Similarly, you should get more particulars of the sale by way of a new amendment to the plan.

Finally, if your old sponsor had a representation on the board, the new one will probably retain participation. Whether the sponsor participates or not through a representative (management company or directly through a representative), it is a blessing or no blessing. The sponsor or investor will participate if it owns a large block of shares of the building and wishes to have a say on financial issues such as maintenance, capital investment, refinancing, etc.

I would rather have the sponsor or representative participate as you may be able to work closely on tenants issues, and obtain opinions or advise on conractors, service providers and professionals. Obviously, you need to know why the sponsor representative is there for, but again, if you make the person feel you are willing to work with him/her, you may be able to get more out of the relationship than maintaining an adversarial relationship. In fact, if you have a good board and the sponsor is part of it, you may end of builidng a formidable team that may help advance the business of the corporation more than you ever imagined.

AdC


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Super vs. Resident Manager - V Apr 06, 2007


What are the differences in a super and a resident manager in terms of duties, expertise, licenses? Is the super supposed to be more skilled in electrical, plumbing, painting plastering and general repairs?


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simply put, the major two differences is that a
1/ superintendent is more hands on and has a small staff. A resident manager (RMs) has more staff and less hands on. RMs have more supervisory and administration duties then supers. Both superintendents and RMs need to have the same licenses, permits and Certificate of fitness for buildings with identical systems.
2/RMs tend to earn more in salary and both can be union or not.

As for plastering and painting etc. Some superintendent do that work, some don't.
Both RMs and superintendents need the same skills in general repairs and system operations and maintenance. Just that superintendents perform some or most of that work, while RMs see to it that it gets done.
peterG.


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Thanks!


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Pgrech is pretty much on the money on this one. If I may add the following. A lot of superintendents go on to become RM ( by gaining experience on the job and also through education courses and classes). As Pgrech mentioned there is a lot more administative work which tends to take the pressure off the manageing agent,as well.Examples are coordinating construction/renovation projects, coordinating work schedules, move in/out, dealing with vendors,making sure that you have the correct paperwork when dealing with contractors(insurance certs, licenses).Dealing with staff and shareholder issues. There also tends to be a little bit more interaction with the board, attending board meetings etc. Haveing said all of the above, in the event of an emergency, the RM most roll up his/her sleeves and address the situation (even if it means getting your hands dirty) Finally most RM work clothing will be either suit and tie or polo shirt etc.




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He calls himself the resident manager but dresses in a uniform like a super. He delegates work like an RM but every holiday season he is listed as the superintendent. He does some administrative work and he makes a good salary. He has his licenses but can't do plumbing or electrical work. But he has a small staff. Hence my confusion. What is he?

Would co-ops save money by hiring supers rather than resident managers?


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Good question V, now when you hired him was it as a Super or a RM? Do you have a handyman as well on staff? We did spell out the basic differences so you decide what you have. After all it is your building and you call the shots.

FN


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We have no handyman on staff, just the RM and the two porters. We are a new co-op. The RM came along with management who we also did not hire.


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V, see PGrechs? response. It is based on the number of employees/staff. I not sure if it makes too much of a difference what he likes to be referred as. I know RM that are called supers and vice versa. Secretarys are now know as office assistants and recently heard of a security guard being referred as a real estate monitor/guard.

FN.


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Actually Nikkie, the next generation of Resident Managers are already calling themselves "building managers".
How stupid are they especially if they are unionized. Which is why I always have maintained that we should be just called supers. Anything with the word manager in the title will endanger union status.
Pgrech


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Hmmm the super/Rm came with the Management company. Interesting. Make sure everything is double checked by the board. Super/Rm keep each other in check and balance. This may not be so. The word being MAY.
Pg


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Union defines resident manager as a super who has a staff of 7 or more (including the super in the 7). Thus once the union has made a RM contract for your building it wont change unless the staffing changes. So if you are non union then the title can change as you like. But then you may suffer the consequences of that change.


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Does the SEIU have a different classification (pay scale) for a Superintendent v. a Resident Manager ? In our coop, the Super has recently adopted the Resident Mgr title on his own. We refer to him as a Super, that is what we hired and he has a Super classification in his labor contract. If the Resident Manager title has a different payscale, I guess we would need to address that concern with the Super, as he manages a very small staff.


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Rick from what I understand there is a set salary in the union contract for supers. Having said that, many buildings with good supers may pay them additional bonuses if they are good so as not to loose them to other buildings e.g. monthly or holiday bonus. Normally Resident Managers will sit down and negotiate a salary before they are hired as they tend to have more experience.
Hope this helps.

FN.


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Actually Nice, There is NO SET PAY SCALE for supers or Rms. ONLY the pay increases are set, and which is a minimum amount per years. If you look at the "union book" you will find a pay scale for Handymen and Others (doormen, porters, etc.) but not for supers or Handymen. Also Supers union contract come to an end on April 20th while the RMs union contract comes to an end in June.
There are many RMs making less money then supers. But mostly RMs make more money. I did a survey a few years back and found the Most (which means not all) RMs make over $65.000 per year while Most (which means not all) Supers make up to $60,000 per year.
In actual reality there is no significant diffacere between super and resident manager in NYC. Out of NYC resident managers have almost a completely different role. How much does a super or RM make is based on historic salary for that building. This does not include Merit Pay. Good to outstanding supers and RMs make there own deals after that historic amount or (base amount). Outstanding RMs earn in excess of $110,000 per year and full union benefits while outstanding supers earn in excess of $70,000 per year. The difference is not how well the super/Rm can negotiate and what credentials he/she has to back up his/her worth. In most cases, size of building has nothing to do with how much a super/RM earns
Pgrech


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Hey, P not quiet sure I agree with your last statement on super v RM. I am of the opinion the larger the building/responsibility the more the super/RM should get paid (not always the case). Do you not think that a person that has a 400 hunded unit apt building with forty staff should get paid more than someone with eighty units and four staff.

FN (Happy Easter)


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I agree with you Nickie but in truth, I can give three examples of a super in biuldings with under 28 apartments each that earn over $70,000 and a few RMs with 400+, 600+ apartments earning between $65K to $70K. Its nuts. But some buildings Value their super/RM and others just dont care.
There does exist an in equity of value vs salary and Size verses salary.
All i was saying is in reality size dont count much when it comes to salaries. How good a super/RM is and can negotiate is.
Happy East mate.



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well V, while it is the function of a super or RM to run the building, it is certanly not his function to pick his title. Further more, in due respect, who runs the board? super, managing agent or the board themselves?
Becareful of titles, while most of the time they satisfy egos, when unions are involved they can end up more.


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I agree with both, Peter and Nickie, we all mostly share the same duties and responsibilties in running our buildings.


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We recently gave our building Super (union) a raise & his title is now Resident Manager, even though it’s a very small building (just 50 units).

He prefers to wear a suit & tie now, rather than a uniform, but has taken the liberty of sending his clothes to cleaner we use for the staff’s uniforms, thereby charging the building for cleaning his clothes (which he wears to other occasions, not just work).

My sense is that if he chooses not to wear a uniform, he is responsible for his own clothes.

Thoughts, please?

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important cap gains question - ba Apr 04, 2007


cant ask the accountant as we are in the process of getting a new one - but have a question -

if an assessment for a capital improvement project, such as a new roof, is dissolved by being rolled into a maintenance increase , then can we still realize it as part of the basis on sale of stock? (thereby reducing the tax on sale) - ?

or does it have to remain a seperate line item as an assessment?


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I believe someone offered you the answer previously: keep it as a separate from maintenance (even if collected with maintenance) so that the assessment earmarked for a capital investment is appropriately identified and segregated.

AdC


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HELP> someone who knows - please tell me. thanks


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ideally it is a seperate line-item but does it HAVE to be? that is my question - what are the ramifications when a board rols it into a mntnce increase (Please someone who knows the answer.. thanks!) adc - not you. sorry. please .


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...but the odds are good that money spent on a new roof can increase basis & reduce your cap gains tax, even if commingled rather than collected separately.

Whether or not an item is assessed does not factor into the definition of "capital improvement."

While it's better if assessments are kept discrete, what you actually spend funds on is more important than how things are labeled on your budget. It's customary to take stock at year-end of what capital improvements--even small ones--were made using funds on hand. [Condo owners should get a yearly report on same to update their own books.]

Focus on keeping good & complete records of the actual improvements made.


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What are the implications?

(1) Maintenances are based on routine expneses.
(2) CapEx is a variable expense based on the needs of your builidng based ideally on a schedule.

The most adverse impact of rolling maintenance and capex into one budget would be that maintenance will swing dramatically from year to year.

If your new roof will cost the co-oop $200,000, but next year the isntallation of the new boiler is $110,000, your maintenance will have to fluctuate dramatically to cover the requirements of the capex. Thus, it would be difficult for shareholders to sell an apartment whose maintenance depends on the capital improvements that are projected that year.

This is why operational expenses are separated from capital improvements. To provide a better balance between expected expenses and expenses that require planning, reserves, and other forms of financing.

If you were to look at any annual report or 10K of any publically traded company, capex is a separate table in your presentations and are not rolled into the income statements of the co-op.





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What are the implications?

(1) Maintenances are based on routine expenses.
(2) CapEx is a variable expense based on the needs of your builidng based ideally on a schedule.

The most adverse impact of rolling maintenance and capex into one budget would be that maintenance will swing dramatically from year to year.

If your new roof will cost the co-op $200,000, but next year the isntallation of the new boiler is $110,000, your maintenance will have to fluctuate dramatically to cover the requirements of the capex. Thus, it would be difficult for shareholders to sell their apartments whose maintenances depend on capital improvements that are projected that year.

This is why operational expenses are separated from capital improvements. To provide a better balance between expected expenses and expenses that require planning, reserves, and other forms of financing.

If you were to look at any annual report or 10K of any plublicly traded company, capex is a separate table in the presentations and are not rolled into the income statements of the corp.







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mntnce amounts - big al Apr 04, 2007


our maintenence is about 6.24 a share for an 86 unit pre-war on the upper west side. alot? too much?
we do not have a 24 hour doorman. we have no fancy amenities. this is aobut $120,000 a month. It seems high, no?


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Hard to say without more information. How big is your building's mortgage? Fuel costs? Other monthly expenses? Number of staff (full or part time)? Tax bill?


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staff is six people. full time. but not a 24 hour doorman - the night guy is a porter from 1:30-7:30.
tax is about 300k ish. fuel - dont know - maybe 50-60k. 12 story high building.
mortgage was refinanced last sumer with a 200k prepayment panalty. it was a 4.2 million loan with the 2.3 paid off - leaving 1.9 for a new roof and pointing.
maintenance increase of 12.75% in the last nine months. assesment of 50k in May 07.


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> How many square feet in your apartment, and how much is your monthly maintenance ($6.24 x # shares you own)?
> How many bathrooms in your apartment?
>Can you give me the square footage and monthly maintenance for another apt in your building with a different number of bedrooms and bathrooms?
> If you can do that, I'll give you a run-down on average costs. And if you're in Manhattan, and care to tell us which neighborhood, I'll give you the average cost for bulidings around you (not a scientific absolute, just my calculations from public info).

steve w


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Hi steve

we have aprox 1650 sq feet with three bathrooms (2 of them, tiny. 324 shares. the building has aprox 121,313 sq feet of residential space (according to property shark) with 19,760 shares .
thanks


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Hi, BA,

Thanks for your info -- just what I was looking for.

Let me discuss your original question first: Is $6.40 per share too high for a maintenance fee? It's impossible to give an answer to that question. Many people assume that one share in your building is equal to one share in my building, and equal to one share in every other co-op in the five boroughs.

It's not. Thanks to the wisdom of the lawyers who draw up co-op papers and the staff of the attorney general's office, which blesses those papers, the number of shares in a co-op corporation is arbitrary. For example, your 86-unit co-op has 19,760 shares. My co-op has 43 units and about 26,000 shares. So you can see that the price per share cannot be used for comparisons among co-ops.

So how do we measure one to another?

The way I do it -- and I'm no statistician, just a board treasurer who got tired of the complaints about our maintenance fee being "the highest in Manhattan" -- is to look at the monthly maintenance paid (in dollars -- NOT in shares) and divide it by the size of the apartment (in square feet). So, for example, if Alex pays $1200 a month in maintenance for an apartment that's 900 square feet, she's paying $1.50 per square foot.

1200 / 900 = 1.5

The weakness of this comparison is that it does not take into account tangibles (doorman or not, health club or not, basement apt vs penthouse) or intangibles (grand or dingy lobby, pre-war or modern, how recent the renovation, "fixer-upper" vs "move in tomorrow"). The strength is that it's quick and easy, especially because figuring out which building has which amenities is a challenge.

I decided to find out the average maintenance price in Manhattan co-ops by neighborhood. My source is a feature in the Sunday Real Estate section of The New York Times. If you're familiar with the paper, you've seen the "Sales Across the Region" grid. The top row always shows Manhattan sales. For 24 months (October 17, 2004, through October 15, 2006) I recorded every Manhattan co-op sale (not cond-op or anything else) by area (square footage), monthly maintenance, and neighborhood.

Here are the results. They include only those neighborhoods with at least five sales during that period in The Times. From most expensive co-op neighborhood to least, by square feet:

Midtown East: $1.42 per square foot
Murray Hill $1.40
Upper East Side: $1.36
Midtown West: $1.33
Chelsea: $1.25
Greenwich Village: $1.17
Grammercy Park: $1.07
East Village: $1.07 (tie)
Upper West Side*: $0.98
SoHo: $0.97
TriBeCa: $0.87
Hudson Heights: $0.86
Morningside Heights: $0.86 (tie)
Hamilton Heights: $0.75
Inwood: $0.73
Washington Heights: $0.70
Harlem: $0.51

*I include "West Side" sales with "Upper West Side."

So to answer your question (finally!), is your maintenance too high? Let's take a look.

You own 324 shares at $6.24 per share. That's $2022 monthly maintenance (rounded up). Your apartment's size is 1650 square feet.

2022 / 1650 = $1.225 (call it $1.23) per square foot

You live on the Upper West Side, where the average monthly maintenance is about 98 cents per square foot. So it's quite a bit higher than the average for your neighborhood.

But before you boil over, let's look at your entire building. It has 19,760 shares at $6.24 each, for a total monthly rent roll (that's the legal term, since in a co-op we rent from the corporation) of $123,302.40. You point out that according to Property Shark, the total residential area in the building is 121,313 square feet.

123,302.40 / 121,313 = $1.016 (call it $1.02) per square foot

That's four cents per square foot above your neighborhood average. (Or, to be more precise, 3.6 cents above.) So I would say that your building is neither too high nor too low, but basically spot-on.

Unfortunately for you, you live an apartment that has disproportionately more shares than your building's average. That mean's there's some lucky shareholder in your building who has many fewer shares! How are shares allocated? That's another story -- but in short, it's arbitrary, based on such things as the view, the number of bathrooms and bedroom, and so forth.

(Let me add that in the case of my figure for the UWS average, it's based on 57 sales. The most expensive I found on the UWS and West Side was $1.70 per square foot. I don't write down the addresses, but if you're curious look in The Times of Feb. 12, 2006. The least expensive was 57 cents, in The Times of one week earlier.)

If hope you find this useful. It sure taught me a lot about maintenance fees in the city.

In case you're wondering, I discovered that my building does not, as one shareholder put it, have the most expensive fee in Manhattan. It's 88 cents per square foot, which puts us in the middle third, in between SoHo and TriBeCa.

Cheers!
steve w


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Steve - this is brilliant! THANK YOU. one thing: how reliable is Property Shark for such info? It may not be a correct figure.


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Thanks, BigAl! I'm glad you appreciate it. Everyone thinks her maintenance fees are the highest in town -- an urban myth that lives on because it's so tough to compare.

As for Property Shark, I have no idea how accurate it is.

My own building is listed there at something like $4 million, which is far less than the value of all the apartments in it. Granted, that's different from the value of the building.

I don't know how much it would cost to build a seven-story brick building with an interior courtyard, tile on all the public floors and plantings, but I'll bet it's more than that.

steve w


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As Tad stated it, it boils to many variables. Also, a true measure of your maintenance would be if you were to know the total square footage of your builidng and you were to find out what does it take to maintain it per sq. ft. However, the number you get means nothing unless it is compared to other similarly situated buildings with similar amenities and you were to compare sq ft by sq ft.

AdC




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Proxies and Soliciting - Beth Apr 03, 2007


Hi BP,
You sound very knowledgeble about this, are you in the realty/management, etc. business? If so, may I contact you?


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