I have just been recruited to serve on my board and have found out something about our income streams.
It appears that because of the IRS 80-20 rule our cooperative actually has to forego income, sometimes in excess of 20,000 dollars a year, that we could otherwise collect from two store we rent space to.
Actually collecting this income would have significant consequences in loss of shareholders ability to deduct real estate taxes and morgage interest from income taxes as well as the treatment of sales proceeds for those who sell.
I have also been told this maybe more common than I would like to think.
Therefore, how many of your buildings face the same situation? How many of you also actually have to leave monies uncollected?
It seems the stores we rent to benefit in lower rents at the expense of the cooperative and all its shareholders.
For complete ruling, see:
See news article:
Court backs homeowners associations
Committee for a Better Twin Rivers v. Twin Rivers Homeowners' Association (A-118-122-05)
Argued January 4, 2007 -- Decided July 26, 2007
WALLACE, J., writing for a unanimous Court.
The issue before the Court is whether the rules and regulations enacted by the Twin Rivers Homeowners’
Association governing the posting of signs, the use of the community room, and access to its newsletter violated
New Jersey’s constitutional guarantees of free expression.
Twin Rivers is a planned unit development consisting of privately owned condominium duplexes,
townhouses, single-family homes, apartments, and commercial buildings located in East Windsor, New Jersey. The
community covers about one square mile and is populated by about 10,000 residents. The Twin Rivers Community
Trust (Trust) is a private corporation that owns Twin Rivers’ common property and facilities. The Twin Rivers
Homeowners’ Association (Association) is a private corporation that serves as trustee of the Trust. The Association
is authorized by the Trust to make rules and regulations for the conduct of its members while occupying the land
owned or controlled by the Trust, to provide services to its members, and to maintain common lands and facilities in
Twin Rivers. The Association maintains the Trusts’ private residential roads, provides street lighting and snow
removal, assigns parking spaces in its parking lots, and collects trash. By acquiring property in Twin Rivers, the
property owner automatically becomes a member of the Association and is subject to its Articles of Incorporation
(Articles) and Bylaws. The Association is governed by a Board of Directors (Board), whose members are elected by
all eligible voting members of the Association. The Board is responsible for making and enforcing the rules, and for
providing services to its members that are financed through mandatory assessments levied against residents pursuant
to an annual budget adopted by the Board.
If we convert to a condo, we know that we have a small number of residents that are in arrears for modest amounts.
On the date pf a conversion wherein stock certificates are exchanged for deeds, what is the best way to ensure that the surviving homeowners association (HOA) is not saddled with any “debt”.
One thought is to place a lien on an apartment such that a title search will disclose a claim against the owner. In effect, this should establish a primary claim against the owners.
However, if the shareholder cannot convert a coop loan to a condo mortgage or obtain a reverse mortgage, this encumbrance may thwart the orderly conversion process.
In effect, the HOA would operate a coop corporation for a limited period of time until the arrears are satisfied.
May I have some views or interpretations?
Yes, we are seeking advice of counsel, but with so few coop-condo conversions there is not much to review any outside assistance would be welcomed.
I am a new condo president of a brand new condominium of 20 units- 7 doorways with 3 units per doorway. We are managing ourselves at the moment. One of our owners has a hard time remembering he lives in a condo-- he likes to do what he wants. He has just put a lock on the door to the basement and given the 2 other unit owners a key. He didn't get approval from the Board-- he never gets approval for anything he decides to do-- so he is a bit of a challenge. Obviously, we have to confront him with this. Could the lock on the basement door be a fire code issue? Thanks!
We have a large, mature tree in front of our bldg. It's in a standard tree pit near the curb. The roots pushed up the concrete next to the tree which is 2" higher on one side than the rest of the sidewalk. You can see soil under it.
We're doing sidewalk repairs soon. No accidents (yet) but people could trip on the raised concrete if they don't look as they step on/off the curb. It can't be grinded down, and we could patch around it but it would still be raised. If someone tripped and was hurt we could have a lawsuit.
All - Trees are city property. Should we call the Parks Commission, explain our problem and see if they'd replant the tree elsewhere and plant a new tree for us? The roots are so big and compacted they may not be able to remove it without harming/killing it. The sidewalk would have to be repaired if they put in a new tree. Since we're repairing it soon anyway, this would be a good time to do this.
Opinions, other suggestions?
The basement/first floor rear apartment in our co-op has a retaining wall around a cement patio area that is for the exclusive use of the owner of that unit. He has just painted some "artwork" on what has always been a white retaining wall. To the shareholder in the unit above hers, and who overlooks this yard, this huge eye pained toward the top of the wall it is not art, but tacky graffiti. Can the Board dictate what the owner does to this wall. Same goes for the garden, which has unsecured trellises falling over sideways. Former owners always took great care of this area. How can we insure this does not turn into Grey Gardens? Or can't we.
What are the steps, and who are the players, with regard to the mortgage refinance process. Our balloon mortgage matures in 1 1/2 years and our board is completely new and a little green. Who leads this process? What is the catalyst? When should this process begin? What professionals should we be utilizing?
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