Read the "Bible" of the co-op, i.e., your by-laws to determine who attends, who gets elected and, if still the "bible" is in doubt, ask your co-op counsel. Also, how does your proxy read to know what powers it confers. Perhaps it is an issue of speaking with your counsel and have him/her review/prepare your proxy. I cannot see how in the WORLD co-op boards as so fullish not to have your counsel revew the proxy so that you get "NO SURPRISES."

AdC

need a striaght informative answer. thank you - we do know people can come bearing signed proxies - the questions is - can they be rent regulated tenants - can they be anyone?

It is my understanding that ANYONE may attend an Annual Meeting if they hold a signed proxy, and may vote that proxy however they wish.

Ask your co-op attorney to get a straight answer.

Big Al: Unless coop governing documents say otherwise, a person doesn't have to be a shareholder to be appointed as a proxy. But he must attend the annual meeting if any issue including board elections will be voted on, otherwise those shares cannot be included in any tally. The exception is if a proxy form lets a shareholder cast a vote for specific board candidates - or states issues to be voted on and lets a shareholder check off a "yes" or "no" vote for them. As far as I know, anyone who's a proxy can ask questions at an annual meeting. Check this with your attorney. My board's always felt that rental/sublet tenants or anyone else in the bldg who isn't a shareholder shouldn't be allowed to be a proxy because they shouldn't be privy to all the coop's business. A debate.

I will come back later on the topic, but just one thing that caught my eye...

"if I want to be an enlightened shareholder...and possibly serve on the board in the future."

Even if you need a flashlight to become enlightened, there should be no excuses for not taking the interest and serving on the board. There are many areas that a board oversees and needs to take decisions that require plain common sense. Similarly, not all board members have to be lawyers, accountants or engineers so that talents may be shared. What a board member needs is above all common sense, fairness, desire to participate, learn and work for the good of the community, honesty and an open mind as well as willing to leave the nonsense out.

So, don't let you or others deter what you think will be to your benefit as well as others. If you started to inquire about the figures and what they mean, you are in the right path. Attend the annual meeting and ask the accountant if pressent to provide more information on those items that catches your fancy on the report. Remember, there are no stupid questions, but stupid answers.
AdC

What to do when asking accountant for explanation of a particular item on the financials & you are given an answer or non answer & brushed off.

I assume you're asking the co-op's accountant and that you're not on the board. (If you're on the board and he/she won't answer, get a different accountant.)

The accountant may feel that he/she doesn't have to answer a shareholder's specific question because he/she cannot bill for that time.

I would ask the board treasurer, and if the treasurer doesn't know the answer off the top of his/her head, ask for an answer by the end of the week (or something like that).

If you still have no response, ask the treasurer again. If you haven't heard back, ask the board pres. If you still have no answer ... you have a recalcitrant board. Ask the question at the annual meeting, and, better yet, get a few other shareholders to repeat the question after you if you get a brush-off.

I'm curious to see what others suggest.

Steve

You may ask the independent board accountant any question regarding the audited annual report. After all, the accountant certified, based on management records, the accuracy of the report as far as how it was prepared.

The accountant may not know day to day information because the independent accountant is acting in a capacity of independent auditor, i.e., it takes the figures from the management's accountant and spot checks expenses and receipts to ensure that consistent accounting practices have been observed. A co-op may engage the auditor to do more frequent audting on records, i.e., quarterly, semi-annually, etc. to ensure that management practices are followed consistently and also ensure better knowledge o the records. IN the process, the independent accountant may be more careful with the way capital reserves have been spent.

If you were to ask questions to the accountant, you may first ask a friend who knows about accounting to review it for you and provide you with some insight. The person may provide you with some relevant questions that you should ask at the meeting.

AdC

Tell them that was not an adequate answer and ask again. And keep asking until you get a more satisfactory answer. Do not allow anyone to brush you off. Especially when it comes to your money

Put questions in writing to which were not answered & after sending numerous letters & a mandate from the board, was eventually answered with same answer given previously & no supporting documentation which would have actually answered the questions. It was also documented to accountant approximatly $70,000 missing according to the managment report for checks paid which were actually not & for money placed into a "phantom" account which has disappeared as shown in the management report. $$ have been missing for over a year & to date no response or comment from accountant. Board is apathetic with the exception of a few who are in an uproar over missing $$. I am banging my head against a wall!

As AdC says, one thing board members need is common sense. The same goes for shareholders who look at a financial statement to determine a coop's financial health.

Bill Gates once said, "A key to understanding how well the dollars and cents are spent is understanding the decisions and sense behind their outlay." Allan, compare figures for 2006 v. 2005. If a liability category was much higher in 2006, question it. Why were apt repairs $85K v. $25K? Question whatever jumps out at you. Check "Administrative Miscellaneous". It includes items like phones, messengers, printing/postage. Money may be spent unnecessarily on such items, or extraneous costs may be buried in there.

Check "Account Payables." Some unpaid bills carry into a new year, but if they were $180K v. $55K, ask why. It could be due to tax/insurance/fuel hikes. Or unexpected costs in a specific year for, say, legal fees. It could signal that funds aren't being managed well or the coop isn't taking in enough money to cover its regular expenses.

There's a lot to consider in determining a coop's financial health, but common sense should alert you to what seems right or not, whether you're a board member or not. Another quote from Bill Gates: "I'm not as concerned with the facts and figures as I am about the facts behind the figures."

Both BP and AdC are absolutely correct in both their points.

Let me add a couple of things to look at on your financial statement.

Under "Assets," check to see how high the "Cash & Cash Equivalents" is. That's the money in the bank -- savings. It's the money that pays the everyday bills, and it's the money held back for a pipe break, facade work, or boiler breakdown. That is, major expenses. The bigger the amount, the less likely shareholders will have to face an assessment.

(So how big is big enough? Our accountant says a rule of thumb -- and it's just that, not a rule -- is to have reserves equal to three months' maintenance. If you don't have that figure, and if you want to know how to find it based on your financial statement, respond to this post and I'll walk you through it.)

Second, under "Liabilities and Shareholders' Equity," look at the Income category. This will show how much money comes from sources other than the maintenance fee. There are probably several categories.

You may see an assessment or a surcharge, for example. Those are typically added to maintenance fees, which you will pay (unless those charges have ended; ask your lawyer or a neighbor).

Of all the other income categories: Add them together. Are they together more than 25% of the maintenance income (called "carrying charges")? If so, that's a good sign that the building makes money in ways other than charging shareholders. Typical categories are rental income from retail space and the fee from having cell phone attenae on the roof.

Then, below all the expenses, look at "Excess after depreciation and amortization." You want that number to be positive, because it's the co-op's profit (in very general terms). That's money that goes in the bank to save for a rainy day -- for emergencies, capital improvements, or a remodeled lobby.

Finally, read the supporting notes. Accountants say that these are the most important parts of the financial statement. The notes will tell you what's going on financially, what the big purchases were, the size of the mortgage, whether the co-op has other loans or a line of credit, how many apartments are still owned by the sponsor (if any), and any significant event that happened in the new year by the date of the accountant's letter (the cover letter).

For example, an accountant told me that in one of his client buildings, he had to include mention of a fire that happened in, say, January 2005, even though the financial statement was only for 2004 and 2003. That's because repairs to a fire would have a financial impact on the building.

Good luck!

I've just come across another source of good questions for the novice to ask about financials. It's in the April 8 Times real estate section, a whole article about questions to ask before buying (one section section is about the financials).

It has to do with comparing certain categories year to year (if your statement shows two years: the current and last year's numbers).

If you can't find it on-line, a library can for you.

Re: the proposed bill requiring coops to give buyers the reasons why they're rejected in writing, it was discussed yesterday on The Brian Lehrer Show on WNYC-FM Radio. Bill sponsor, Councilman Hiram Monserrate, was on the show. It was about 20 minutes long, with callers arguing the bill's pros and cons. To download the audio, go to www.wnyc.org then go to The Brian Lehrer Show Archives link. The show is "Rejection Made Clear" on April 26.

There was also an article on this in the NYTimes on April 21 called "Pushing Coops To Explain Why You Can't Buy." You can download it from the archives at www.nytimes.com.

This is a hot topic. Most surveys indicate that a great majority of shareholders in NYC favor the bill but an even greater number think it won't be passed.

Hi, BP,

I heard the segment on WNYC. What surprised me most was when Brian asked Councilman Monserrate (this is a paraphrase based on my memory), Were the real estate agents pushing hard for this bill?

And the Monseratte said: "Yes."

No wonder real estate agents would be given grounds to sue if the bill passes! I have never heard this point made in any discussion of the bill. If co-op owners knew that their buildings could be sued by buyers' agents -- many of whom have staff attorneys in their real estate offices -- those owners may feel differently about the bill.

After all, everyone *should* be opposed to discrimination, and in *favor* of corporate transparency.

But this bill aims to reduce the independence and rights of boards, and expands the category of protected classes to include their real estate agents.

Hi Steve,

I never heard of RE agents getting the right to sue a coop in any discussion of the bill either. We had an open house last night. The two agents handling it were in the lobby. One of them heard the WNYC show and were discussing it.

I asked if they're for the bill and agents' right to sue. One of them said, "I'm out to make a commission. I'm sick of boards rejecting people and making me work harder. If I can sue and get money for the time I spend on rejects, I'm all for it." An owner (never on the board) walked by, heard this and said, "Maybe you should focus more on finding qualified people who'll make good owners and neighbors and less on making money as fast and easy as you can. If boards should be accountable for good ethics and practices, so should you." Can't say I disagree with that.

I should clarify my point about suing.

The bill does not give injured parties the right to sue. It gives them the right to make a complaint to a city attorney, who can then file charges.

But the bill does, in fact, include real estate agents. Under Chapter 11, Section 8-1102, Paragraph C, " 'Proper party' means a person whose application has been rejected or a real estate broker who would have been entitled to a commission ..."

Later, in Section 8-1105, the bill allows "each proper party" to receive from a co-op found guilty fines ranging from $1000 to $25,000.

So no, real estate agents couldn't sue. But they would reap the benefits of a guilty verdict -- and would have reason to encourage a city attorney to file charges.

I am all for freedom of responsible speech and for the right to know. I am also for the right to protect the coop and condo and all shareholders. Why limit the lawsuit just to the person/s denied and his broker? Why not add the contractor and moving company as well as anyone else whom would have made money if the deal went through?
I think the key word is responsible. If the bill does pass, there has to be some legal protection from lawsuits for the coop/condo and all involved. Other wise it wont be responsible.
Just my 2 cents worth.
Pgrech

I agree, Pgrech.

Why not add the buyers' lawyers and the guy who sells moving boxes and packing tape?

The reason was revealed by Councilman Monserrate yesterday (he's the sponsor of the bill) on Brian Lehrer's show on WNYC.

As I remember it (this is a paraphrase; check a previous post here to find a link to a podcast of the show), Brain asked if the real estate community had been pushing for this bill all along. Monserrate said Yes.

* * * * *

I should point out an error I made in my original post. Under the bill, no one gets the right to sue, but rejected buyers and their real estate agents can complain to the city, which could then file charges; if a co-op is found guilty, both the buyer AND the real estate agent would be awarded damages of $1000 to $25,000.

Any lawsuit would come as a result of the bill's requirement that boards put in writing the reason for the denial and swear to its accuracy. The rejected buyer could then hire a lawyer to sue with the letter as evidence.

Obviously, it is not just one person that the new group wants to "dethrone," but the entire board since they are running as a slate, according to your words.

The main thing is not how long your friend has been on the board, but what has he done on the board for the co-op that a group of new shareholders has such a negative opinion of the person? Obviously, "the friends of joe blow" and joe blow himself can also mount an aggressive campaign if this were so important to them. Again, the use of the proxy is important to attain a quorum, but to keep others out just because a person works well with the others is not giving opportuniy to the course of history to take place.

Finally, I don't know what board members will give up their posts just because joe blow cannot continue on the board. Is this just a problem of a clan being perpetuated and being "dethroned" by another clan? If this were the case, then perhaps the new slate has a point to get joe blow as the rest of the board are followers.

Sorry for just not supporting your cause. If joe blow is not elected, all board members should stay to work with the new person. Perhaps the new person will change his/her mind regarding board service.

AdC

AcD, I do see your point. But the new person who wants to get our board member (the VP) out is actually a trio, three persons who: a) all live here barely a year, b) are tight with each other (two are first cousins), and c) share an agenda that would do nothing to benefit the coop or all owners - only them + one nearby couple who are seldom seen, show no interest in the coop, and never attend a meeting.

The trio is running as a slate, not because they don't like the VP or his work on the board but to get majority control (3 of 5) and do what they want. All are first-time owners, no experience on any board, and until recently had their own clique and made no effort to get to know anyone else.

Our board likes the VP because he's honest, fair, creative, responsible, pleasant, and has years of experience and knowledge of coops. The longest other member if reelected would be in his third year. The board fears if the trio is elected, they'll outvote the other two anytime they want. We know they want to spend a good amount of money on things only they will benefit from because of where their apts are situated and what's around them. We have maintenance jobs we have to do, and we plan to decide in the coming year how to pay for the new roof, boiler + security system we know we'll need within 2-3 years.

The trio wants to use the reserves we have for their "pet projects." They may not be reelected next year (doubt they would be after owners have a year of their ineptness). But they'll eat up our funds this year, get what they want, and leave the dirty job to the next board of asking owners to shell out more money than they would have had to if we still had our reserves for the big upgrades in 2-3 years.

This isn't just my impression of the trio. They constantly tell our board what they'd do if elected, and our managing agents (we have two) say they hope the trio isn't elected because they feel they'd be hard to work with and their interest are very obviously self-serving.

This is a tough one.

I'd have thought there was no reason why a candidate (current board member or not) could not ask any shareholder (resident or not) for his/her vote or proxy.

Your attorney's counsel should be taken seriously. If that's his/her final answer, I guess you have to stick with it, but I'd try to find out if there's a way everyone could have the same contact info.

For example, in my 43-unit building, we circulate a list of all residents. Those who want their phone numbers and e-mail addresses included give that info to the board (most people do). So all residents have the same contact info, although the board has access to more.

It may be tough to get such a list started now, though, if your election is soon.

Is it true that shareholders' addresses of record cannot be shared with all shareholders? I'd push your lawyer to find some legal & ethical way to make it possible to campaign with everyone.

In the meantime, make appointments with shareholders in the building to explain why you and your pres should be elected! My co-op went through something similar five years ago. A majority of the board were newbies without a clue; two newbies resigned half-way through, and sanity returned. But it was a rough time for the building.

Good luck.

steve w

I don't see how one person is going to be outvoted and three individuals are going to step in, except if other board members decide not to elect themselves. Well, it is a decision of the followers who wish to leave the board who are at fault as well.

If your board has done wonders, why three monkeys who are hardly known will take over? I have many times said that boards should blow their own trumpets. It means repeat as many times the good that has come out in terms of services, repairs, discipline and all the minor things that constitute the backbone of your builidng.

Obviously, the worst thing that you can do being overcome by panick. Board members are at a vantage point, similar to the banker in a casino. If you leave the hand to others by not being savy at politics, you have no board. For your info, shareholders remember good board members, so mount your campaign and if you were to lose, well blame those shareholders who do not appreciate your efforts.

AdC

Time for a change man, let it go......

Big Al, your reply about the owners who want to get rid of our longtime board VP is that "12 years is too long" and it's "time for a change, let it go" -- ?

So, he shouldn't run again and we shouldn't care if a slate of three owners who know nothing about coops and only want to serve self interests take majority control of the board? That is change but it's not the kind of change I'm willing to sit by for and accept.

If someone in your company is doing a good job, likes what he does, works well with everyone and still has a lot to offer but he's been there 12 years, should he quit or be fired - especially if he's replaced by inexperienced, inept people who aren't looking out for anyone but themselves?

If a board member is voted out because a majority honestly feels change might be good or someone else looks promising but there are only so many positions and someone has to go, so be it. I'm all for new people who may improve the system and add value to a board - but one or two at a time. They shouldn't be allowed to come in and run everything from day one. No responsible corporation would do that.

Change means different but it doesn't always mean as good as, or better, than what you had. You of course don't know that until it's tried out. But sorry, Big Al, I don't think change is good just for the sake of change.

you seem threatened by the new people. how can you be sure their agenda is so awful for the building?

Big Al - I personally am not threatened by the new people, but they've told the board and managing agent what some of their plans are. They also said they don't want to disclose the plans to all the owners yet, and if we do they'll deny it and make it sound like the board are "poor losers" and are lying because they're afraid they'll get voted out. As I said previously, they are close (two are cousins)- and in case you're thinking they may be just "kidding", no they aren't. They're dead serious.

Example: We renovated our lobby in July '05, cost $65-$70K. Decor is traditional. It was well-done, blends nicely with the rest of the bldg, is comfortable. Brokers and visitors comment on how nice it is. This group doesn't like it and wants modern or Art Deco. They aren't even board members and they already brought in two designers and got design plans from them on spec + rought estimates. The lower one is $110K. OK, not everyone likes the same thing, but we've gotten no negative comments from anyone about the lobby.

So we should let this group take control of the board and uselessly spend $110K of coop money that we need for other important projects? That's just one example.

BTW, the coop sponsor who still holds 20-25% of the shares told our attorney this group has been "pitching" him and he's thinking about giving one of them his proxy. So, what do we do now?

thye sound like they only have their own agenda's at heart. is your lobby nice or ugly - you really have to ask youself. maybe it does need help. no - nobody agrees all the time tastewise - but there is good tast and bad taste. there really is. if this is their primary agenda, and the lobby is really nice as is, then you should be concerned.
sponsor's donot like money being spent. indicate that will happen .

Big Al: I appreciate what you're saying, but the new lobby isn't even 2 years old. We've had no complaints and we do get compliments. We have a lovely marble floor. A few nicks were filled, the floor was cleaned/polished, and the lobby was designed around it tastefully in complementary colors.

Redoing the lobby is this group's primary agenda. It's one piece of it. I can give you other examples of their "plans" that border on ridiculous. OK, one. Rip out the sidewalk in front of the bldg (that we totally repaved last Sept) and replace it with beige-color PORCELAIN tile.

We'll try telling the sponsor what this group wants to do, but they say if we tell anyone they'll deny it. The sponsor always votes for the VP that the group is trying to get rid of. I think he should lead the board in this revelation to the sponsor and hopefully he'll be believed.

Typo in my last reply to Big Al. I meant to say that the lobby IS NOT the group's primary agenda.

In our building the co-op has had two presidents in twenty-five years.
We have seven board members (including the president of course).
In twenty-five years a total of fifteen individual have served on the board.

In our twenty-five years:
1. We have paid off an $8,300,000 mortgage without ever refinancing it.
2. We have expended $15,500,000 in capital expenditure, more so in the recent past as the building ages.
3. We have the lowest total costs per month for a luxury co-op in our area and for that matter in the county and neighboring counties.
4. We are contemplating a switch to condo and guess what? The residents have no need to accept the burden of unfunded and deferred capital expenditures or unpaid mortgages.
5. We have no term limits.
6. We are self managed.
7. We have had two building managers in this time period.
8. Was not assessed any underfunded union pension fund levy when the workers’ union ceased operation.


A neighboring building, virtually identical in construction and size; and which became a co-op on the same day as ours, has in twenty –five years:
1. Ten presidents
2. Fifty-five board members
3. Ten different “management” firms.
4. Twenty different managing agents.
5. Was assessed a substantial under funded levy for their workers’ pension fund when the union representing the workers ceased operation
6. Refinanced twice, the last time very recently wherein they paid a prepayment penalty of about $2,000,000 on an outstanding $8,000,000 principal balance and then assumed a $20,000,000 “new” mortgage (10MM of which paid off the old).
7. Expended $7,000,000 in capital expenditures as compared to the building above, which politely means that about $7,000,000+ in capital expenditures have been deferred.
.
So if you were doing a case study as to “term limits”, what is your vote?

what is your address? you are very lucky to have such a well run building.

what is your address? you are very lucky to have such a well run building.

Teds building is the Utopia CoOp we dream of. We are the exact opposit, (are we the building next door) but with Email/ShareholderPower, we are making very big dents into our problem.

The base of our problem? The sponsor continues to have enough votes to put his pals on the Board. We have one board member (15 years) who has been caught forging documents -- twice, breaking bylaws, work without permits and the list goes on.

It took the Shareholders two years (and two Board members who are voted in by the Shareholders) to fire a Super who had been caught stealing, taking kickbacks (he wrote letters of admission and apology) and doing major renovations WITHOUT permits. HOW? Email/ShareholderPower!

We now have a Manangeing agent who should be fired, but again the sponsor and his special friends on the board, who can only see the little picture (thier personal agenda) and do not seem to understand that the (very big and expensive) problems being created by this Manangement, will be money out of their pockets.

We have contacted the AG's office, and they are getting back to us,, whatever that means.

We forced the board to put Term limits on the ballot, but because of the power of the Sponsor, we narrowly lost. But getting this on the agenda, was a win and we are not giving up.

POSITIVE ADVICE:
The Internet is changing things. Through Email it is easy to communicate and organize. Last year this special board member and his pal at the manangement co. tried to sign a contract for about $10,000 work -- we had already compleated and did not need. We (shareholders) stopped this by sending out communications through the Internet. In the past this contract would have slipped through, each of us would have wonderned about and paid the extra few hundred dollars. BUT, after being caught, and beseiged by shareholder Emails, they backed off... Email Power

Email now makes it easier to become part of majority. It may take time but Together we are going to pass term limits, and get rid of these bums! Email Power

Keep up the good work. There are many coops in you situation. Mine is one of them. Went to AG's office but to no avail. Keep trying if the AG's office receives numerous complaints about the same thing we might get someting done.

Thank you for the encouraging words. And you are right, if the Ag's office hears from enough of us, they may take up the cause of Shareholders, who are victums of out-of-control boards. We are going to bombard the AG's office with letters.
A group of owners, after being ignored by the AG, bought tickets to a fund-raiser, and when the A-Q discussion, stood up and presented him with their petition and the fact that his office had ignored them.
Our situation is becoming critical, in that these board members dont seem to care that the management is ripping us off, and that the building renovation could hit a million dollars...

We worked with the sponsor and in turn the sponsor has divested (sold) all but the protected seniors’ apartments (about ten). It may be an option to pursue.

As indicated, we are contemplating a conversion to condo.

In this case, we have engaged the sponsor (yes, the original sponsor) who has remained active in the residential market to manage the conversion effort. Consideration was given to the fact that the sponsor has contemporaneous experience with coops and condos, bylaws, legal requirements local to our community and NJ.

While our shareholders are aware of the anticipated fees, let me just assert that we have negotiated extremely reasonable terms, far better than we could obtain from the “specialist” firms that we interviewed.

Achieving long term objectives

Based on the fact that our long term program was to eliminate all debt, to create a reserve fund, to fund capital projects when required (without undo delay) and to maintain or improve the quality of the building, and thus the quality of life for residents; we find it prudent to “campaign” for the individuals we recruit for the board.

Yes we recruit individuals who will assist us in meeting our long term objectives.

However, as we have has only a limited turnover of board members, this has not been a yearly effort. Yes, we stand for election every year based on the original by-laws which have not been amended.

On the other hand there have been from time to time on an irregular basis one or several shareholders who have stood for election. In these times, we may heighten our campaign. Even so, it is very low key. Essentially, we enlist “friends of the board” to solicit proxies for incumbents and any new board members that we have recruited.

If your board has done wonders, why three monkeys who are hardly known will take over?

I have many times said that boards should blow their own trumpets. It means repeat as many times the good that has come out in terms of services, repairs, discipline and all the minor things that constitute the backbone of your builidng.

Ted, you exemplify my saying. I'm sure your board does not only blow their trumpets by stating their accomplishments over the short and long range, but you are doing it here too!

Congratulations!

Another thing that needs to be pointed out is that you probably have an excellent Admissions Committee in place that makes sure to select those shareholders who fit the culture of your building. Finally, I have to say that, your building probably has a stable population. If the turnover of the board in the building has been virtually nill, it means that your residents remain in the building, not the average 5 years, but probably 10 or more. Consequently, your population must be mostly middle aged and/or semi-retired. Obviously, the goals of a corporation change according to the population and yours seem rather stable.

AdC

Should you fire the agent because the financial statement wasn't done? Nope...not something the agent controls.

Should you fire the agent because you were denied a shareholder list? Nope...that's the board's call.

You should fire the agent, after you've put a competent board in place, for arguing that there's no point in having a shareholder meeting without financials. Obviously, you have much to discuss & work out.

You're doubtless required to have a timely annual statement. Since that's in the works, I suggest you focus on the future. Keep in mind that it's the board president that calls a meeting, not the agent. Put pressure there.

However, you state that half your board is new...that implies an election, which implies a meeting. Was that before you purchased?

It is the responsibility of the Agent to procure the material for the financials to the accountant. Therefore he does control the statement.

Since the agent sends out all the monthly billings he/she
has the necessary shareholders list to supply.

It is necessary to have financials for annual general meeting therefore the agent should see that they are available to the board. Putting pressure on a board president to hold a meeting is just waste of effort if the financials are not available on time.

I respectfully disagree.

My main point was that in this situation, shareholders need & deserve a forum at which they can ask questions & learn why they've been so poorly served. If the financials aren't available by the meeting, the main agenda items should be what went wrong, when it will be fixed, & what's being done to prevent a recurrence.

Both the accountant & agent report directly to the board. If either or both haven't performed, the board is responsible for taking corrective action, & for informing shareholders.

Of course the agent has a list of shareholders...but it can be released only at the board's direction.

I agree withi C/CS: the board is responsible. The agent and accountant are employees and act at the board's instructions.

And there is, in fact, you can do if the board is in violation of its bylaws and/or proprietary lease in re the financial statement. The state attorney general's office oversees corporations (of which your co-op is one). See this page for help:
http://www.oag.state.ny.us/realestate/coop_prob.html

Note that the a.g. recommends, as have others here, that you are familiar with the requirements in your organizing documents before contacting them or hiring a lawyer.

Steve W

This (BELOW) is from the AG's office. We recenly discovered that our manangeing agent/board had not kept an up-to-date list of shareholders -- which is one of their most basic responsibilities.
Many of your questions can be answered at this link from the AG's office

http://www.oag.state.ny.us/realestate/coop_prob.html

THE FOLLOWING IS CUT AND PASTED DIRECTLY FROM THIS SITE:

The corporation must keep minutes of shareholder meetings and correct, complete records of names and addresses of shareholders which it must make available for inspection by a shareholder or the shareholder's agent or attorney. (BCL Section 624)

Yes...boards are absolutely required to provide current shareholder contact information; in practice, they often fail to comply. This is one of the most common tactics used to discourage/disarm effective opposition to incumbents.

Though the BCL is plain on this point, I've never seen an agent provide data against a board's wishes.

Check all your corporate documents - bylaws, articles of incorporation, occupancy agreement - It should be stated in at least one of them that you must get your financials by a certain date - It is in mine but they are always very late - the reason for this is that the board is not doing their jobs, and why are they willing not to have financials on time and of course when you do not receive financial information there is always the question of why - what are they hiding although how many people really know how to read them and you don't have the backup information - Unfortunately there is no agency to complain to which again is why anyone can and does do whatever they want - as to holding board liable that you have to check with lawyer - not necessarily the lawyer retained for the board - because it should have been his duty to make sure that you have the financials - how do you have annual meetings without financial information - not saying that what is in the financials is correct information

thank you both for your thoughts, BUT yes that is one of the problems, we have not had a shareholder meeting in the whole year I have owned (14 months now), and obviously for sometime before then, considering the last financials anyone has for the building is 2004
and yes potential buyers into the building having to wait 2 months for 2005's financials that are already over a year late does make them and ME wonder what is wrong with the financial condition of the building.( if they are not among the 2 that voided their purchase contract's)
On top of the fact that we were just handed a 10% maintenance increase to meet our budget (the boiler and a steam pipe burst this winter) ALTHOUGH, they wasted our reserve money this past Fall to totally redo our backyard (very ill-advisedly, and with out, as we now see, the assistance of a much needed design professional) that only a few children utilize. depleting our reserve to not be ready for these emergency's we have encountered, now resulting in a maintenance increase.
on top of the fact that our building is badly maintained
Porter and Super half of the time MIA
I apologize for using this forum just to complain at this point, but I am extremely frustrated with my new "home"

No annual meeting in 14 months? That's a sign that there is something wrong -- maybe no more serious than inexperienced board members. But it is violation of your by-laws (right? be sure to check them) and, therefore, in violation of New York State corporation law. Did you check the attorney general's site I posted earlier? Please do.

It sounds as though your co-op needs some serious fixes, but you're taking the first steps now to make those fixes. Talk to the other shareholders, find out how they feel, find out who you would like to serve on the board with, and then fan out to campaign.

When the others ask, "When's the election?" and you say "At the annual meeting," you'll get to explain the current board's mismanagement. It shouldn't be tough to coalesce support for a new board.

Good luck.

Steve W

Although I don't know of any window companies, I can add this, Bill:

If you must file for a DOB permit, it is the city, not the board, that requires an engineer's or architect's drawings. And work that requires a DOB permit is work that comes under city codes, not the board's whims.

So why weren't DOB permits required for similar work done earlier in your building?

In my case, I removed a dumbwaiter shaft, the third shareholder to do so in my line. None of the others were told to get DOB permits, but I was. Why? The board's architect made a mistake and didn't realize the permits were required. (That architect no longer works for the board.)

Since board members aren't experts on city building codes, they rely on others who are. Unfortunately, even the experts make mistakes. I paid that actra $5k myself, so I know what you're talking about. But if you want it changed, you'll have to write to your city councilman, not the board, because it's a city law/code/rule.

Steve W

thank you for the response. Do you know of any arch who would do this?

This is the architect and firm I used. He found errors made by the board's architect, so he has a practical eye. Also a good person.

Michael Notaro AIA
Zaskorski & Notaro Architects
212-239-7212
646-372-0655
mnotaro@znarchs.com

Thank you very much.

We have covered this subject before on this site. Check the archieves for previous post/responses.

FN.

You can call 311 and complain - if it is over 45 decibles from within any apartments (windows opan and the reading taken from 3 feet inside) then they must abate the noise. If this new HVAC effects a previously known quality of Life, it must be abated. Again, call 311 and have them come take a reading.

the noise law code wil be updated in July making this even more enforcable. Thank god!

Here you are: (from citymayors.com) Concerning the new code:

Closing a loophole in current code provisions governing air conditioning and air circulating devices:

Air conditioning units on buildings, particularly clusters of them, are a growing source of noise complaints. Although the current code has a standard for air conditioning units of 45 decibels, it has been interpreted to apply only to a single unit. Because of this loophole, a cluster of air conditioning units could be generating 60 decibels of sound, but there would be no violation unless a single unit was creating more then 45 decibels. The updated code will create a uniform standard of 45 decibels for all installation of air conditioning units and mandate that existing units that exceed 50 decibels in the aggregate reduce their output by five decibels.

Simplify enforcement by using a ‘plainly audible’ standard instead of conventional decibel limits, which require use of a noise meter:

The existing code requires use of handheld decibel meters to issues many summonses. Although decibel meters are useful at obtaining acoustic measurements, they require frequent calibration, have a three decibels plus-or-minus margin of error, and the police officers, who are often responsible for enforcing the noise code, do not always have them available or have received the training necessary to operate them. The code adopts a standard of ‘plainly audible’ at specified distances. Police officers and noise inspectors will be allowed to issue summonses for a multitude of violations including car stereo, loud music, barking animals and loud mufflers using a common-sense standard and without a noise meter. This standard has been used and upheld by courts in many other states.

Increase enforcement effectiveness by limiting the Code’s use of a standard of 'Unreasonable to a person of normal sensitivities': The existing code prohibits ‘noise that is unreasonable to a person of normal sensitivities.’ This standard is too vague to be consistently defensible. The new code replaces it with more specific and defensible standards. For areas not specifically covered in the code, sound is prohibited from any source that increases the ambient noise in a residence by ten decibels during the day and seven decibels at night.

i have been in my co-op for 2 years now and have experienced nothing but heartache.
i have been complaining about mold for 2 years now around my air conditioner and have not gotten anyone to come look at until last week. when someone did come take a look at courtesy of the board,not only did they not fix the mold but they said it was because of my airconditioner sleeve. they took out my air conditioner changed the sleeve and left my air conditioner sitting on the floor. they refused to put it back in. they said the board told them not to put it back in. THEY NEVER TOLD ME THIS UPON THEM COMING IN AT ALL. HE TOLD ME HE WOULD PUT IT BACK IMMEDIATELY. they have also complained that i am using a 220 volt amp to run my air conditioner which was allready established before i moved in and one that they have seen during 3 inspections they have done. They are abusing thier power in order for their electrician and air conditioner people to get paid.
CAN SOMEONE HELP ME!!!!

Newbie, having to deal with unsightly, noisy HVACs from the bldg next door isn't uncommon. In NYC, space is limited, bldgs are close together, and we can't change that.

It sounds like the bldg next door is trying to help you. A lot of bldgs would just say "too bad". If the green plastic fence they put up is ugly and blocks light from getting to your apts, a couple ideas you could suggest to them:

- Put up an open-weave fence (e.g., chain link, lattice) - something to generally hide the HVACs from your view but allow more light to get through to your bldg.

- Put an enclosure around the individual HVAC units instead of a wall of fencing between your bldgs so at least you look at that, not the HVACs, and get more light. There are enclosures (I've heard them called "cake covers") that fit over various rooftop units. They look like a shed like you see in backyards for tools/garden equipment.

As for the HVAC humming sound, an enclosure like the above may muffle it. Everyday noise within individual apts may override it. People, especially in a place like NYC, also learn to adapt. Your residents may get used to it. When I was growing up, we lived not far from an elevated subway line. Visitors from out of town used to ask how we could stand the noise. Our standard reply was "What noise?"

§24-227 Circulation devices. (a) No person shall operate or permit to be operated a
circulation device in such a manner as to create a sound level in excess of 42 dB(A)
when measured inside a receiving property dwelling unit. The measurement shall be
taken with the window or terrace door open at a point three feet from the open portion of
the window or terrace door.
(b) On and after the effective date of this section, when a new circulation device is
installed on any building lot or an existing device on any building lot is replaced, the
cumulative sound from all circulation devices on such building lot owned or controlled
by the owner or person in control of the new device being installed or the existing device
being replaced shall not exceed 45 dB(A), when measured as specified in subdivision a of
this section. For a period of two years after the effective date of this section, this
subdivision shall not apply to the replacement of a circulation device that was installed
16
on any building lot prior to the effective date of this section by a device of comparable
capacity.
(c) Except as otherwise provided in subdivision b of this section, with respect to
circulation devices installed on any building lot prior to the effective date of this section,
the sound level limit of 42 dB(A) referred to in subdivision a of this section shall apply to
each individual device except that if the cumulative sound from all devices owned or
controlled by the same person on a building lot exceeds 50 dB(A), when measured as
specified in subdivision a of this section, the commissioner may order the owner or
person in control of such devices to achieve a 5 dB(A) reduction in such cumulative
sound level within not more than 12 months after the issuance of such order.

Thanks, Big Al. This is all good stuff but not sure what this means in terms of the noise problmes we are having. It may not be measurable by DEP meters becuase it is low frequency constant rotating noise--like you're in a washing machine or a bus is idling outside your apt. seems And where to begin? We actually have two rear yard offending neighbors-a Chinese restaurant that does their own illegal installations and repairs-called DOB when they were gerry-rigging another piece of noisy equip to their roof and the DOB has not responded to our 311 complaint. When and if they finally send an inspector, half the time they don't seem to know what they are looking for -there's so much junk up on that roof, and they close out the complaint- say "no response required-no work being done." Of course not, it was two months ago when we called! The other building has three tenants with equip on the roof (including a new exhaust for their lobby) and they all say it's the other guy's equipment making the noise. The DEP came by a month ago after the restaurant was closed so we knew noise was from Building #2 but it was just under the legal level--still enough to disturb our rear shareholders-they are not being unreasonable-some subletters are threatening to not renew because of the noise. We are thinking of sending a letter to the DOB Commish to have a meeting and go over the plans and permits for these buildings and compare it to a photo of what is up on the roof tops. The offending Board does not seem to want to do anything about the noise but the store owners say they would be happy to work with us to attenuate. SO there is a disconnect here. Doesn't each new piece of equipment require an electrical and/or plumbing permit whether it's an addition or a rehab? Are these new laws actually significantly lowering the threshold for the offending noise or just taking a reading on cumulative noise? Thanks for all the feedback we've gotten from Board Talk members.

311 is horribly inefficient and the inspectors just sometimes seem to be lazy. You often have to call the complaint in multiple times and BE VERY SPECIFIC as to when/where the equipment is that may not have a permit. do it today. do not delay. If you hear the noise from the neighboring coop and it is disturbing - it is probably over the legal limit. Often, with city agencies (inc the DEP) you have to continually contact them and compain and send many letters to have them be fully efficient. It is worth the effort.
noise is a health hazard.

I agree that 311 is very inefficient. City agencies (incl the DEP) can be too. As Big Al said, you often have to call or send many letters before you get any real action from them. What a waste of time and energy that is.

Newbie, did your managing agent call the DEP re: noise from the coop next door? Sometimes they seem to respond more quickly/effectively to a call from an "authorized" agent instead of an lone individual, even if it's a board member.

I'd also suggest calling your district councilman. Get to get to know him and those who work for him. He may be very responsive and get further than you can with the City, specially if he's proactive, up for reelection soon or new to his office. If the noise next door disturbs your bldg, it may disturb others too. Talk to the boards/residents in neighboring bldgs. Maybe they can help make a stronger case for you with your councilman. There's strength in numbers.

Big Al and Newbie are right about 311 and the city's response.

Here's what I've learned from calling 311 (about a neighbor building's construction trash heap). If there's no response the first time, call back a week (or so) later. When I called the first time, the 311 operator sent my request to the DOB. As you may have guessed, there was no response, or the response was like the one you mentioned (along the lines of "no action needed.").

So I called again. Made the same complaint, but this time the operator forwarded it to the DEP (she did this on her own; it wasn't my suggestion). This time, a Dumpster was hired, the trash went in it, and when I called 311 back to find out what had happened, I was told the building had two violations and a date for a court hearing!

You won't be so successful all the time (I'm not either -- don't get me started with Sanitation Dept problems), but don't give up. Try having another board member or a neighbor down the hall make the same complaint. When the city sees that there's more than one person complaining, they're more likely to take action.

Steve

this does not directly relate to neighboring buildings but it does relate to the fact that coops must be very careful additions that make noise that may violate warrent of habitability/ quiet right to enjoyment:

March 2007: Excessive Noise from Ventilation System Violated Cooperative's Warranty of Habitability

Any lease of residential real property, including a cooperative proprietary lease, is deemed to contain a warranty of habitability. This warranty, codified in Real Property Law § 235-b, provides that the landlord or lessor is deemed to have warranted that the premises are fit for human habitation and the uses reasonably intended by the parties and that the occupants of such premises shall not be subjected to any conditions which would be dangerous or hazardous to their life, health, or safety.

In Misra v. Yesid, 2007 N.Y. Slip Op. 1371, 2007 WL 474018 (1st Dep't Feb. 15, 2007), the Appellate Division upheld a trial court decision holding that a Cooperative had breached the warranty of habitability based upon excessive noise from the Cooperative's ventilation system, which was located directly above the plaintiff's unit. The plaintiff claimed that her apartment was uninhabitable for more than two years because the ventilation system was so loud that she was unable to live in peace and quiet. Plaintiff contended that despite being on notice of the problem, the Cooperative failed to take any effective remedial action. In support of her claim, plaintiff produced reports from the Cooperative's own engineer, indicating that the level of noise and vibrations exceeded those permitted by the New York City Administrative Code. The Court accepted plaintiff's contentions and rejected the Cooperative's argument that the plaintiff had not suffered any damages because she had been traveling and was away from the apartment for some or all of the time period in question. The court ordered a hearing to determine the amount of plaintiff's damages, which could include, but were not limited to, the amounts she paid in maintenance charges during the period in which the apartment was uninhabitable. However, the Court dismissed plaintiff's claim for breach of the warranty of habitability insofar as it was asserted against the Cooperative's management company, because only the landlord or lessor owes obligations under the warranty of habitability.

The Appellate Division also affirmed the trial court's ruling that plaintiff's could pursue a claim of fraud against the person who sold her the unit and the seller's real estate broker. There were issues of fact as to whether the broker had actively concealed the noise problem by reducing the fan speed of the ventilation system when plaintiff came to visit the apartment before acquiring it.

May I suggest you tip the guys the next time. Let me know how this works out.

FN. (I may post a serious response later)

Fairness of services is something that is instilled by way of policy from a board. First, a building staff, even if they provide service, are EMPLOYEES of the corporation. Consequently, HOW they should conduct BUSINESS to RESIDENTS is a matter of CO-OP OR CONDO policy. When people live in a RENTAL, the super does many things on his own because the owners are INVISIBLE. With Condo or COOPS the building staff become a main topic of discussion. This is WHY the postings with the lengthiest amount of response happen to be related to SUPERS and MANAGEMENT.

Therefore, it is hard to break a legacy that has been handed down over ages in building employees unless BOARDS understand their roles as employers and the need to CREATE policy on EXPECTED services. Obviously, this is like dealing with TARZAN in NEW YORK.

The way we have sort of broken this overt behavior also deals with what support we give the staff when people complain and WHY the board needs documentation. Obviously, many will find the some of the steps a bit too much, but it has worked 90-95%:

Part I:
1. Institute a multiple job order form. No resident shall receive service without a written form. The resident retains a copy for his/her records for reference. When the service is provided, the employee enters the nature of the problem attended, the day and time.

2. Check the problem forms on a weekly basis for the nature of the work and the turnaround.

3. If you have a computer keep track of your forms. It will help you find out record of repairs for the future.

Part II
Check your repair policy for apartments, i.e., do you demand the use of licensed plumbers and electricians to do work in the building and insured contractors for repairs? If you were to do so, you may be eliminating the use of the superintendent and handyman doing work for residents. Also, you will eliminate the headache of the multiple complaints that the super or handyman did substandard job or charged me too much, etc.

My motto is: if I use licensed plumbers and electricians to maintain the infrastructure of the building, why should I find substandard plumbing in local lines of residential aparments (e.g., no waste trap under a kitchen sink,code violation, and similar sins)? Let residents do the same to ensure a code-compliant system.

Part III

If you institute a tipping policy on what each resident is expected to receive from your personnel, e.g., heating element maintenance (if applicable), moving practices whatever they may be in your place, it may eliminate the confusion on some "forced" tipping that might be going on for basic services.

Let residents know that there are letters of commendation are always welcome as a way to find out how the staff is perfomring.

Part IV
Make sure you investigate any complaints regarding bad services and confront your staff with the complaint. Make such confrontation a positive feedback as a way to RETRAIN your staff.

I'm sure others will have other ideas.

AdC

Have you raised the question with the management company/board? I think the fairest way is to implement work request dockets/tickets. They are not too difficult to come by. It is a three part work order where the shareholder or doorman etc fill out the particular request.(logging date, time etc,) The super upon completion of the work, writes down what repairs etc he carried out, gives the shareholder, management, and himself one copy of the ticket. I have used a system like this in the past with great success.

This is a very simple,reliable, and inefficient way of tracking work done in your building.

FN

Work orders/tickets maintenance forms can be purchases at a reasonable cost from Peachtree business Products 1800 241 423 to order or get catalog or Property.PBP1.com
We used them they work for our needs. How ever this doesn't answer your main question, which I will a temp to answer soon.
Pgrech

First of all, "taking care" of heavy tippers and board members is a human reaction. It happens in restaurants, hotels etc. I am not saying that it is acceptable, only that it is a human thing and is done all over. What is not acceptable is ignoring those that don't tip. If a resident is entitled to a service, then the super is compelled to provide that service as that is what he/she is paid to do.

Secondly doing private work on company time is theft of service. This is also not acceptable and should not be tolerated. Theft of service and ignoring those that don't tip only show the true character and integrity of a person (super or otherwise). So perhaps the real issue is you need a super while being human has the "right stuff."
To echo ADC, board needs to put policies in place to make sure that private work is to be allowed or not and place guidelines if it is. Without guidelines then you have a Dodge City.

Third the private job "chargeback system" creates a lot of paper work both for super and management. In some cases it works in many it is more of a pain then its worth. Some management companies may increase there management fee to provide this, as it is a lot of book keeping. Furthermore, most workers need to make extra money, and there is nothing wrong with it as long as honesty and integrity is observed. The private job thing is a way to make extra money and also a way for the owner to save money as well. When done right, it is a win win situation.

Forth and last issue, I have yet to see a work order form that has a section for satisfaction. In my buildings, every year or two I send out a survey of satisfaction form to be filled out by residents grading various performances of staff etc. This might work for your building as well.
Pgrech

In our 500 unit co-op, the doorman (or the office) will only provide phone numbers to board members.

And, no one, not the doorman or the office, will provide the resident’s telephone number to my wife even though she is the spouse of a board member.

Let me ask you this, D&C.

If a board member finds out that the apartment above you has sprung a leak and water is most likely dripping into your apartment, would you prefer for the board to call you right away or to leave a message at the front desk?

Now, even if you, in fact, would prefer to wait until you walk past the front desk and read the message, there will be many shareholders who would demand to know right away. In fact, some of them may threaten to sue the board if their property was in danger and no one informed them right away.

What if you complained to a board member about the insane noise coming from a stereo in the aparment below -- would you be satisfied if she simply left a message at the front desk?

Remember, legally speaking, in a co-op a shareholder is a tennant of the corporation; the corporation is the lease-holder and the board is the landlord.

You will probably find in your co-op by-laws or proprietary lease a clause that says all shareholders are required to provide the secretary (or the mgt co) with their up-to-date contact information.

Most of the time when the board contacts you it's not because your property is in danger. But if the board is taking the trouble to get in touch (remember, board members are volunteers with their own lives who would probably rather be watching Jeopardy! or playing with the children), the reason is probably fairly important.

Steve W

Steve, with all due respect you are missing my point. (or maybe I did not explain myself). Our building staff know how to handle leaks,emergencies, etc and what the protocol is. I am more concerned with confidential issues. Sure it does not help much if a shareholder is in financial difficulty and a board member stops off at the desk and gets the number and calls the shareholder for his/her own self interest.
Now do you see my point.

D&C

Hi, D&C,

I may have missed your exact point, but I don't see much difference.

The fact remains that board members are obligated to have contact information for the shareholders. Whether they get it from the doorman, the super, the managing agent or their own list is immaterial.

If a shareholder owes the corporation money, and is behind in his/her payments, the board has a duty to make sure that money comes in -- they are running your business, after all, and if someone isn't paying her fair share, then you and your neighbors are making up the difference. To me, that's truly unfair.

The only exception to your example depends on what you mean by a board member calling the shareholder for "his/her own self-interest." If the board member is not, in fact, trying to find out when the shareholder will pay her bill, but harassing the shareholder, then yes, the board member has crossed the line.

Otherwise, I would want my board members to aggressively collect arrears. (To put it another way, if you invest in GM and you find out that GM is letting some customers own cars for free, would you want to hold or sell your stock in GM?)

Your Proprietary Lease may indicate otherwise, but it's unlikely.

Steve

I'm with you. No board member should get the telephone number, specially when you have Management. If there is a leak, those affected by the leak should call management for the emergency so that staff may be called. STaff will then report to management or board the problem.

Similarly, a loud stereo is a problem of police or management. A board member should not be dragged to be a policeman for noise, violations, etc. Let it be taken care by management, staff and police if necessary.

A board member can always write a note to the shareholder requesting to be called for the reason explained in the note.

AdC

I agree with you. As I said previously we know very well how to handle emergency situations. We do not drag the shareholders into the situations, give out names, etc. We write up incident reports when such happens and cc: management. It works out really well. As from my previous post, you have answered my question. (I was looking for reassurance to my question/opinion which you have supplied)

D&C (well not any longer)

D&C,

I'm glad I reassured you of your conviction; howerver, thorugh this chatroom, you find opinons that are diverse and may help widen even more the thinking. Don't just get reassurances, but also get point of views. It helps articulate to your own shareholders WHAT TO EXPECT FROM board members, management and counsels.

As BP states, arrears are only taken up by management and counsel. It should be totally out of the hands of the board. One out of 500 shareholders will come to the board to let them know of some financial hardship that the shareholder wishes the board to consider. Although not the most ideal situation, the shareholder may be asking or reaching for advice in their particular case; the shareholder should deserve empathy, frank discussion and knowledge of the shareholder's short range plan so that counsel may be consulted and engaged at the appropriate time.

AdC

Board members can be given owners' telephone numbers, assuming: (1) the Board members are calling on Board business, such as trying to arrange payment of arrearages; and (2) the Board has agreed that the specific Board member is authorized to do so.

Board members are obliged to keep the contact info confidential and should only use it for Board business. Otherwise, telephone numbers should be strictly confidential. If someone wants their neighbor's telephone number, they can use a phone book.

The building's managing agent and/or super should already have keys/contact info in case of emergencies.

Note that our attorney actually recommends that Board members contact owners directly in certain situations (such as arrearages), since being approached by a neighbor/Board member on sensitive issues is more effective, and less threatening, than being approached by the managing agent or the building's attorney. Of course, the Board member should be able to "stick to business."

NSB, I don't agree with your attorney that board members should contact owners on issues such as arrearages. I don't think they should try to resolve arrearages but of course should be aware of them. It should be handled by management and/or their accounting department. Reasons for arrearages are many, and board members can get into a hornet's nest by trying to handle this area of coop biz. It's tough enough keeping board service and friendships (or at least being on good terms with owners) as distinct relationships without getting into direct discussions with them about their personal financial issues.

I agree that at times talking with a board member can be more effective and less threatening than by management or the coop attorney. We have an owner who travels a lot on business. Her three sons (in their 20s) had parties when she's away and "friends" of all ages coming and going at all hours. Residents were afraid to get in the elevators with them because they either looked scary or were stoned blind. Our board VP's known the owner for years, had a talk with her, and said things were escalating and she risked eviction if this didn't stop and he wouldn't be able to help her. She appreciated being approached this way, laid down the law to her sons (but good!) and we haven't seen or heard any funny business in over a year now.

Good board members have to use good judgment, and I think that includes knowing what their duties are, when to get involved with owners and when not to.

BP, I agree with you. NSB, your are paying a management company to "manage" your building. Late fees etc they address, if not successful the attorney is then contacted. I do not understand how someone on the board should be involved.

D&C

As AdC points out, there are many ways to run a business, especially when that business is a co-op.

On our board, the managing agent works hand-in-hand with the board. Together we watch arrears very closely because maintenance fees are more than 96% of our corporation's operating income. When someone stops paying her maintenance, it affects every shareholder: bills keep coming in and we have to pay them; if we're short on cash we have to borrow money; the interest on that borrowed money is payed by every single shareholder.

Income (specifically, cash flow) is important to our co-op, and financial matters are among the most important that any board member oversees.

While board members do not need to be involved at every step of recouping arrears, there is no reason for them to be excluded.

As the treasurer, I examine the monthly statement of accounts closely. When a shareholder is two months behind, I inform the board and instruct the managing agent to send a letter (which says we notice you're behind, if you need extra time please contact the managing agent).

If the shareholder does not respond and does not pay his/her bill, I inform the board. We may then choose to have someone from the board approach the individual, or we may write a letter from the board.

When a shareholder is three months behind, and if she has a mortgage, the board sends a letter informing her that the mortgage contract she signed with the bank obligates us, the board, to inform the bank of arrears equal to or greater than three months. (Banks are not pleased when a customer does not pay her bills -- and one's maintenance is connected to your mortgage, according to the contract you signed.)

With one exception, we have not had to inform a shareholder's bank because shareholders respond to that letter.

As a side note, those shareholders who appreciate a board that holds down costs appreciate this approach because it keeps the lawyers out of the process (and they're not cheap -- we just interviewed a firm that charges $2000 to be an arrears shark for one shareholder; I kid you not).

Perhaps there is a personality clash involved in the case D&C brings up. I can sympathise with that, but the reality is that a co-op is a business; board members have a fiduciary duty to run it in a financially sound way. Some board members have abrasive personalities (we're New Yorkers, after all!), but as long as they're seeking what the corporation is owed, they're acting in the interest of every owner in the building.

Steve W