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Rights - Pgrech Oct 16, 2007


I was asked by some one... Where can I obtain information about the "quiet enjoyment" rule of a shareholder in a New York State co-op set-up. A good definition of the term "quiet enjoyment" would also be apreciated. I'm also interested in information about the business corporation law portions which deals with rights of shareholders in a NYS co-op. I know the by-laws of the coop would have these, but need the actaul law.
With great thanks
Peter

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Pgrech, from the American Bar Association:
"What does "right of quiet enjoyment" of the premises mean? That legal phrase does not refer to noise; it refers to the tenant's legal right to occupy the apartment. The landlord would violate the right by renting the same apartment to two different tenants or by removing the tenant's belongings."

My assumption--and I could very well be wrong--is that if the resident is complaining about noise renders his/her apartment unliveable, then NYS Real Property Law §235-b the warranty of habitability may be the relevant law but it's up to a judge to decide if the noise is illegal. NYC also recently passed a new noise control ordinance that took effect this July but I don't know the formal name.

Finally, NYS business corporation law is important for coops but I think they literally constitute volumes so I can't pinpoint which sections are most relevant because I'm not lawyer!

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Thank YOU.
Pg

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double dipping - Anonymous Oct 14, 2007


Our co-op (condop)initiated fees payable to the co-op and to the managing company for any alterations in one's unit. I think the managing company is double dipping. Their fee is paid via monthly maintenance and now directly from any alterations. Why does the managing company needs to be paid on alterations wanted by a shareholder? Greed besets.

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First please attach some name when posting (Mary, Bob, Jane, not annon). I am aware of Coops charging a fee for alteration agreements (this is for the preperation work involved/or additional work involved, such as reviewing the agreement, faxing, sending copies to the architect etc, and is a one off charge). This does happen.

Fat Nickie.

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remember, the management co. wants YOU as a client. keep the fees as low as possible. like $100 for a simple decoration agreement (painting etc), $300 for a more in-depth one. etc.

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It seems like I didn't word my original message correctly. You mean I, as a shareholder, have to pay the management company, for example, $100 to paint within my own unit? I am not talking about common areas.

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Are you anon? same person?

Bob

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Dear Anon,

You probably have to fill out a form stating your intentions (to paint), and to indicate that you (or your contractor) have adequate insurance.

The management company then has to verify and file the information. That work is typically done by someone besides the property manager. You're paying for that person's time.

You'll ask, Aren't I already paying their time?

Nope. The management company charges its lower possible rate to get your condop as a client. Extra services are paid by the individual who wants the extra services done.

If you wanted a management company that didn't charge for special services, your board would pay a higher annual fee to the management company, which the board would then pass on to you in the form of an increased common charge or maintenance fee.

Charging the individual keeps the monthly fee low for those residents who don't do extra work.

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In most cases this is not double dipping. Read the management contract, most likely it will be in there that the management company shall charge for alteration agreements, project management as well as closings. Most management companies do. This is a way to supplement the low management fee they charge per month.
Pgrech

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As some other posters put it, Management contracts are written to keep the management companies rates low. in doing so, many services are not included into the contract. Most of these include Alteration, Sales, Sublet application and agreements, closings and refinancing. Therefore, when these services do arise, the management company rightfully charges for them.

~AR

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Responsibility of management company in this situation? - rfs Oct 11, 2007


Our condo building continues to have problems with a renter whose 2 dogs are not house-broken and who are rarely taken out. As a result, horrible smells daily fill the hallway. The owner does not care. There have been many complaints. The management company, under pressure, sent a registered letter a while back to the tenant and owner with a fine attached. what is the ongoing responsibility of the management company vs. the board? Does NYC code address this at all, and if so, in which section?

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As far as "ongoing responsibility of mgmt vs. board", mgmt works for the corporation/association which is responsible for things whether it's a coop or a condo. It seems to me that, coop or condo, mgmt can't be held accountable (in the legal sense) if a resident's dogs are the source of many complaints/problems and this isn't being resolved.

I'm in a coop so I'm not that familiar with condo laws, but consult your condo's attorney. Write to the tenant/owner again. At some point I think your attorney should write to them. Keep a paper trail of residents' complaint letters and correspondence to the tenant/owner.

Find out as much as you can about the dogs from residents in nearby apts. Suggestion. If the dogs aren't housebroken, rarely taken out and causing terrible odors in the bldg, it may be a case of neglect or mistreatment. To get more info on this, you can call the ASPCA's Humane Law Enforcement Dept at 212-876-7700, extension 4450.

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The person(s) that the managing agent should be going after is the unit owner. It is the unit owner's responsibility to take care of these matters. The managing agent can only go so far in this situation. The matter should be turned over to the Condo's attorney for appropriate actions.

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Congress and 80/20 - Scott Oct 10, 2007


Can anyone comment about what they know about a bill currently before congress called the Mortgage Forgiveness Debt Relief Act of 2007.

In this bill, which appears to have been recently passed by the House, and next goes to the Senate, there is a section amending the requirements that need to be met for a Cooperative to qualify as such.

In effect, it appears, this bill, if enacted into law, effectively ends 80/20 problems for many coops.

Can anyone comment on what they know about this?

Thanks.

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House Passage: 10/04/2007
Bill Passed 386 - 27 (Roll no. 948)
Senate Referred to Committee: 10/04/2007 : Finance

Link below provides a summary of the highlights. YOur 80/20 is there and what alternatives will be used for co-ops:

http://waysandmeans.house.gov/media/pdf/110/07%2009%2026%20Mortgage%20Summary.pdf - Quick summary.

http://thomas.loc.gov/cgi-bin/query/z?c110:hr3648:

AdC

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What is your sense of whether this bill will become law and change IRS code?

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If I read right, this is a deferral of tax by reduction of home basis. And so, the forgiveness of debt is re-categorized from being subject to income tax to being subject to capital gains tax.

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WIndows and Pointing - Board Newbie Oct 07, 2007


If our co-op has work done on the outside of the building such as pointing and painting and shareholders windows get dirty and need to be cleaned from the outside, is that a co-op expense since it was co-op initiated work? What about sponsored-owned units?

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If a contractor working a project on behalf of the coop corporation creates dirt, debris, damage, etc., the contractor is responsible for any remediation. We do not distinguish in these cases between sponsor vs. owner units.

We do distinguish when a “renter” has an issue with something within the apartment that is “not” the coop’s reasonability, e.g.: wall repairs, broken sink, broken cabinet, etc. In this case, the renter is referred to the sponsor’s rental office.

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Read the contract between the coop and the contractor. In most cases like this, Unless otherwise specified the cleaning is limited to broom sweep and hosed cleaned. The contractor, (again unless otherwise specified) is not going to have the windows professionally cleaned.
Next time put it in the contract (if it isn't there already).
Pgrech

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I agree with Peter, my building don't clean the windows after the contractor points.

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Myriad postings - TedT-NJ Oct 07, 2007


In "Budget Time — Gabrielle, Wed Sep 26 5:26PM", Gabrielle suggested that I post some of our coop's information and procedures, e.g.: self managed.

I added the items about a week ago under that posting rather than a separate thread if anyone has an interest.

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Trusts - albert Oct 04, 2007


Does your board allow transfers of shares to trusts?

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We allow living trusts...I think there is a legal name, but as I am not in the office and don't have it at my fingertips.

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We haven't had anyone transfer their shares to a living trust yet, but just curious why do that? Is there a tax advantage to the shareholder? I am under the impression there is not.

Thanks,
BN

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Per the experts, perhaps the biggest advantage of a living trust is that it does not have to go through probate, as does a will.

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http://www.pueblo.gsa.gov/cic_text/money/living-trust/livtrust.htm

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Yes, most of my buildings permit it. In NY and NJ it is not as common as it is on the west coast, where it is done quite predominately.

You might want to speak to your Atty and find out about maintaining a personal guarantor, in spite of the living trust being the owner of shares of record.

~AR

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situation - licensed contractor - st Oct 02, 2007


renovation in coop in manhattan - the contractor is listed wihtthe city (they have a permit) as one company but the workers are actally from another company that has no license or insurance (friends of a staff member) - report to 311? the coop board is totally in denial.

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Before doing or signing any contract, your counsel should be engaged to review any contract and provide the expected requisites before a contract is accepted by way of a rider.

No matter if a contractor is listed with the City or jurisdiction (i.e., in Westchester with the County, etc), the board's obligation is to demand from the contractor to provide certificates of insurance, extended to the co-op, its directors, officers and shareholders as additional insured and PROOF of worker compensation insurance.

The contract should be valid contingent on satisfying the insurance portion. Similarly, your board should protect itseelf by stating that no subcontractors are allowed for the work.

In the event of a sole proprietorship, there are jurisdictions that waive the need for worker compensation insurance. IN such a case, the co-op should have a waiver of claim against its insurance for the sole owner and worker to sign.

Finally, know the work and what would be the manpower requirements i.e., a person who scrapes floor can do it by himself; a painter can paint on his own without a helper; a bathroom renovation requires a helper, etc. This advice is given so that when reviewing renovations of shareholders the co-op will be able to properly cover and demand the right insurance.

AdC



AdC

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pls see the quesiton. thanks

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To stop work in a building being performed by a contractor and or his subs, Management or the superintendent simply tell the contractor to stop work. Before work can resume, contractor needs to satisfy management that the reasons for the stoppage have been cured.
Pgrech

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The contractor and his workmen have to get into the building through the service entrance? The Superintendent must be there and turn them away until they cure the violation or get the necessary paper work done that is how you stop the work from being done.

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thanks mike - unfortunately the super is part of the problem. he is benefiting directly. if you catch my drift. we, the neighbors, are concerned. the board nd management is in rip van winkle land. so? what to do?

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If you or the Board/Management Company have proof that the Superintendent is taking money, then you should have enough proof to terminate him/her! If no proof, then it is a dead issue.
Good luck to you.

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I must disagree on you opinion about NO subcontractors are permitted to work. A contractor may need to bring in a licensed plumber or electrician for certain portions of the work. Not to allow the contractor to bring this subs in would mean the contractor would have to have his crew do the work which in it self may be a violation. Subs are needed, but they are to be used in the right way... insurance, licenses and permits where and when needed. There is work done by a plumber or electrician that do not need a permit but do need a license.
Pgrech

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In the event of a GC with plumbing requirements, I always stipulate that the GC must name the plumber, provide his license # and also their own insurance. The same goes for an electrician.

Papers should be completely checked. After all, allowing a GC to assume responsibility for plumbing w/o accredidation will be "in it self may be a violation".

Thanks for the opportunity for further clarification.

AdC



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The information is listed in the original package submitted to the Board. Even if the contractor working is not listed with Consumer Affairs (I am assuming since you are making these allegations that you checked?), does not mean that they are not insured. There is no way for you to publicly find this out since the insurance can from several companies. NYS Workman’s Comp will usually verify for you, but it can also come from AIG or some other companies.... Point is: be sure before you act.

Also, did the primary contractor name the sub as additionally insured in the alteration package?

After all these probably useless points are said... if there is an accident, the GC is still responsible, and the SH is also jointly responsible for anything.

It is the Boards responsibility to obtain the alteration package and review and approve it, not to police and investigate the companies.

I suppose, the question then is, why does it matter?
(I ask with respect, just trying to understand)


~AR

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it has been illegally done frmthe start with at least one violato so far. they have manuvered it every which way through the city buerocrary o get in the unlicensed copany. it is unethical and dangerous to the resicence of the coo;. that is why.

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If what you say is true, I assume you have proof of this?
Then the Board did not approve it, and thus should stop all work and fine the shareholder.

However, if the Board did receive a full package and approved it based on the plans and information provided to them, and the proposed contractor is insured and licensed and a proper permit was filed, and obtained, the only possible violation of rule I can imagine is the alleged hiring of an unlicensed sub by the approved contractor. In which case, the contractor themselves are liable, they will have to pay the workman’s comp to cover any checks written to a possibly non-covered party or employee, and the contractors liability insurance will most definitely cover in case of accident or claim; and if, by chance something does get by, the shareholder is still responsible.

All that said, with you as a shareholder who is on the sideline of this whole process and not part of the original approval & review process, your hands are tied. I suggest you run for the Board next term so you can be a part of the processes going forward.

~AR

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I agree with your message. The time to review is before not during or after.

If the renovation may mean taking walls down and reconfiguring an apartment, building permits will be required, an engineer or architect and even change of occupancy for the builidng if two or more units are combined.

The sponsor is the only one that may retain certain right of "not informing" the board regarding combining units, but the co-op should know about open building permits and changes in occupancy. Also, the co-op may demand from the sponsor insurance from its GC's.

In the event of shareholders doing renovation, the burden is ON THEM to provide the paperwork and ascertain that their contractors are not a fly by night organization.

The board should have in WRITING with DRAWINGS the renovation plan, with all the GC requirements including plumbers and electricians licenses, etc. in order to (a) approve in a simple project (b) give it to the co-op engineer to review and ensure that there are issues with the submitted plan of alteration or renvation.

AdC


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Scrutinizing the financials of condo unit buyers - rfs Sep 30, 2007


To those of you who are on condo boards, to what extent (if at all) do your buildings scrutinize the financials of prospective buyers? How do you do it? What guidelines do you use?

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Our by-laws (34-unit condo) only allow us the Right of First Refusal in considering whether or not a sale should happen. Regardless of how they got the money, or for how long they've had it, if they have the money and the price is right (market value), the prospective buyer gets in.

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Usually the financials for the past few years should be reviewed. You want to determine, did the prospect make 250K this year, and he is boasting this, while he only made 65K for the last 2-3 years before that. This is a red flag... did he inherit the money to buy the unit? then the insurance of a steady adequate income is more important... you have to look at the picture as a whole, put the financials in, then formulate "what if" questions, and ensure you have answers.

~AR

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Board committees - Bee Dub Sep 28, 2007


Under BCL 712, the Board can appoint committees to carry out Board business (I included the law below) without the rest of the Board's approval. Do you have these types of committees? Or do you have informal committees that don't have approval power, and instead make recommendations to the rest of the Board for their vote? What types of committees do you have? I have heard of Boards having Financial, Legal, Building committees. Or do you not have committees at all, and instead the entire Board just hashes out each and every issue (making for longer meetings)? Do you allow non-Board members to serve on the committees?


S 712. Executive committee and other committees.
(a) If the certificate of incorporation or the by-laws so provide, the board, by resolution adopted by a majority of the entire board, may designate from among its members an executive committee and other committees, each consisting of one or more directors, and each of which, to the extent provided in the resolution or in the certificate of incorporation or by-laws, shall have all the authority of the board, except that no such committee shall have authority as to the following matters:
(1) The submission to shareholders of any action that needs shareholders` approval under this chapter.
(2) The filling of vacancies in the board of directors or in any committee.
(3) The fixing of compensation of the directors for serving on the board or on any committee.
(4) The amendment or repeal of the by-laws, or the adoption of new by-laws.
(5) The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.
(b) The board may designate one or more directors as alternate members of any such committee, who may replace any absent or disqualified member or members at any meeting of such committee.
(c) Each such committee shall serve at the pleasure of the board. The designation of any such committee, the delegation thereto of authority, or action by any such committee pursuant to such authority shall not alone constitute performance by any member of the board who is not a member of the committee in question, of his duty to the corporation under section 717 (Duty of directors).

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Our board has no committees but I have begun to discuss this with them. Right now we all are involved in every decision.

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Our coop has a seven person board.

We have a summer pool committee that consists of one board member and three residents.

We have an interior decoration and refurbishment committee that consists of one board member and several residents. Several years ago, they engaged an interior designer who prepared the “new look”. Separately we dealt with the design of the new mailroom. Then, we engaged several contractors to bid on the work. Based on the feedback from the interior designer; the building manager, the committee and myself selected a contractor to perform the work. Our legal counsel then worked out the formal documents.

For capital improvements such as the $1,300,000 elevator upgrade and new larger generator, we had two board members and six residents.

For our window replacement program, we have one board member and one resident who is a former general contractor as our committee. The building manager and the superintendent oversee the project, but do read much further below.

Our landscape program is managed by one board member and our building manager.

Our union negotiation committee had several board members and the building manager. Being in NJ, we have a separate contract (not a group contract among a number of high rises) for our maintenance and janitorial staff.

We have a 24x7 security firm. The day-to-day security operations are managed by the building manager and our resident superintendents. (We have two.) For contract negotiations and occasional summit meetings with our security provider, our building manager and two board members are engaged.

For our inside parking deck overhaul, our building manager dealt with our outside engineering consulting firm that wrote the RFP. Then, the engineering firm and our building manager reviewed the bids and brought term to my attention. Based on the recommendations, we selected a contractor and then our legal counsel worked out the necessary legal documents.

Please note that the president is an ad hoc member of the committees, but remains on the sidelines.

Also, all should be aware that we have a zero punch list policy to the greatest extent possible. By this, I mean our outside engineering firm will be on site during the work or while the work is in progress to validate the work and the quality of work. Thus with the window replacement program, the contractor does not leave the apartment until our engineer reports zero defects.

For our elevator upgrade we hired an outside elevator consulting firm that wrote the RFP fore the elevator and for the generator, provided a list of bidders, and then evaluated the responses. The consultant then interviewed the firms with us. Finally, the consulting firm was on site several times a week to monitor the work and approved progress payments.

The committees cannot make any financial commitments or sign any documents. Legal documents are signed by the secretary with the approval of the board for expenditures over a certain amount.

Legal counsel is engaged as necessary.







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Please see my posting within:
Budget Time — Gabrielle, Wed Sep 26 5:26PM

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I believe the Habitat Magazine published two to three years ago a good article on committees. In our particular case, we only have three committees and we are trying to put in place a fourth one. These are in our case:

1. Admissions Committee - Approx. 5 individuals who review applications and make recommendations. However, 3-4 individuals will meet for the interview.
2. Pool committee - Right now it consists of one person only.
3. Parking committee - 2 individuals only.
4. Elections Committee - one person, but hope it would be a 2-3 member committee.

In the past we have also formed adhoc committees for refinancing and commercial space.

As you can see the work is plentiful, but the laborers are few in our case. The main thing that you aim at with a committee is interest and development of leadership; however, communcations and coordination among the groups are critical to ensure that your co-op will serve the needs of your residents rather than stagnate under small arguments or no action with dysfunctional individuals and groups.

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