I used to abide by the “in the walls” adage, but it may not be true. It depends on the language in your Occupancy Agreement (aka Proprietary Lease).

Before you get into arguments and/or pay any money, review your OA. You might not be responsible.

In my OA, it said the MEMBER (shareholder) is responsible for:

Replacement of electric refrigerator
Decoration and painting
Replacement of gas range/oven
Replacement of flooring linoleum
Replacement of all appliances and fixtures
Repair any and all damages to the apartment or co-op premises due to negligence, carelessness, or misuse by the shareholder or any occupants of the apartment.

It specifically states that the Corporation (the co-op) will for all other repairs besides the ones mentioned above.

In my co-op, the s/h would not be responsible for the cost of the faucet. It would be the co-op’s responsibility.

Check out the OA and keep your fingers crossed.

Good luck.

Ok that is really high. What is his hourly rate? It’s about $400.00? Your co-op needs a new plumber. Is this in NYC?

Thank you, Marty. Good idea, I will definitely read through the Proprietary Lease. But I know how the building manager is viewing this. One thing, however: I believe that faucets fall under "Replacement of all appliances and fixtures." I think a faucet is a fixture.
To be continued...

Yes, the coop is in Brooklyn. Unfortunately, the plumbing company is upstate. Thank you for your opinion.

A faucet getting clogged by debris from water shut-off is very common. It is a simple job and it is for the Superintendent to repair. If they elected to send a plumber for an out-of-the-wall repair like this then that was their mistake. Unless you asked for the plumber.... did you ask?
What is the full story and what is up with your super?
We have a corrupt one. It is terrible.
Who is your managing agent? They sound terrible.
We have Halstead. Not good.

God coops are the worst. And most managing agents.
It sounds like you have a misinformed board and a bad managing agent.
Firstly, I believe they legally have to give notice before turning off water.
Secondly, they should have sent the Super to restore the flow of water.
You do not say if your trap was clogged? Was it clogged?
But a trap below the sink doesn't have to do with the flow of water?
Thirdly, any well run coop should have alerted you you might be sent a bill before you say yes to the work.. And given the option to hire your own plumber. You did not retain these plumbers., the coop did.
No, it is not your bill to pay. Send a certified letter to mng agent and board president stating you are not responsible.

This issue is two folds: 1) Is the coop responsible if the sediments in the pipes reaches the faucets of the shareholders? Sediment in pipes is a normal occurrence so I would say that is not the Coop responsibility even if the sediment moved around because of a repair. 2) Is the coop responsible for the plumber's bill? From your description it sounds like you asked for a plumber and a plumber was sent to your unit. The Super could have handled this better but if you ask for a plumber and the job is not a coop issue, the bill is on you. About the bill amount: Unfortunately Coops can only hire vendors who carry adequate (very high coverage) insurance policies and the cost is passed back to the client. $400 for a house call is average in NYC these days. Next time ask the super to do the work and hand him a $20 (Yes, he should be paid because when he does something that is the shareholder's responsibility, the super is working for you, not the Coop.).

1) Calculate the *total* dollar amount of the full abatement. Include all abatement components such as R/E tax, STAR credit, and Veterans Credit into this single dollar amount.

2) Divide the total abatement dollar amount by the total number of co-op shares.

3) Board approves a one-time shareholder assessment in the amount of the value calculated in step #2, per share.

No shareholder will receive the exact amount from the abatement that they are being assessed per share. Some will have a net gain and others a net loss.

This is due to the incomparable way the abatements and assessments are calculated. DOF abatements use alchemy and voodoo chants to decide how much each unit (apartment) will receive as an abatement.

On the other hand, the assessment the board authorizes is on a strictly per-share basis. By corporate law, every share in a co-op must be treated equally. Thus each share owned by all the units must be assessed the same amount, to the penny.

For example, lets take Unit 7D which owns 100 shares. The DOF, without any further explanation, sends the managing agent a spreadsheet showing Unit 7D is to receive an abatement total of $900.

After doing the Total-Abatement/Total-Share calculation, the managing agent reports to the board that to break even, an assessment of $10 per share. Doing the calculation:

$10.00 per-share * 100 shares = $1,000 total assessment

we find that Unit 7D will have a net loss of $100 ($1,000 - $900). The owner of Unit 7D's shares will be hopping mad, but there is nothing the board can do. The differential is due to the ways the abatement and the assessment are required to be calculated.

Good luck!

Thank you Steven for this detailed answer. Having served on many BODs over the years, I’m very aware of how the co-op tax assessment can be treated. Some years it was all returned; others we had a special assessment per share. The current BOD is preparing next year’s budget and obviously can’t decide now what to do with the abatement next year. The new Board will decide that.

My question is if the abatement is shown as an expense on an upcoming budget, should it also not be shown as income, balancing each other out.
Thank you.

Hi marym - Thanks for letting me know about your board experience. I tend to assume most members have little board experience.

I checked our most recent audited financials for the answer to your question. Our accountant classifies the abatement as a refund of Real Estate taxes. It is definitely *not* income, which could have tax consequences.

The corresponding shareholder assessment is listed as being used to fund operations.

All of this is handled by our CPA. You might want to check with your co-op attorney to find out how they deal with abatement and assessment

The Board has the legal authority to change the resale policy whenever they feel it's necessary for the good of the co-op. That's within their rights as a Board. Remember that the Board was elected to represent the interests of the shareholders and to make decisions on behalf of the shareholders.

If you are not happy with the Board's decisions and policies, you have every right to ask the Board about them. If you feel that you can do a better job than the current Board as far as making decisions that affect the co-op, then run for the Board and work to help the Board make better decisions.

Having said that, the Board should have notified all shareholders about the change in Resale Policy since it can affect every shareholder. That's a potential issue that you can run on - "I will do a better job than the current Board in communicating with shareholders about important matters like this."

Good luck and keep us posted.

This is an HDFC and the resale provisions should be in the By-Laws. If so, it would take a vote of the shareholders to change the resale policy. Read the By-Laws carefully and see what they say on this subject.

I actually need to change my comment above. What the Board has done is not change the resale policy but probably added provisions to the application process. Therefore, it would have the authority to do this without shareholder approval.

Thanks all for the feedback. I reread the documents, including the By-laws, which clearly states that "The Corporation have entered into or shall enter into a Regulatory Agreement with the City of New York, acting by and through its Department of Housing Preservation and Development ("Regulatory Agreement"). The Regulatory Agreement contains restrictions and requirements concerning, among other things, renting and subletting, right of certain tenants, restrictions on shares of individual units, increases of maintenance charges, assessments, transfer fees, primary residency, management training for directors, and reserve funds. The Regulatory Agreement has been or will be recorded against the building and the Corporation, which will be subject to all the terms and conditions obtained therein."
To me, it sounds like each shareholders should have been given a copy of the Regulatory Agreement (for the record, we were not), since the RA is referenced in the By-laws. And maybe I'm taking it too far in my interpretation, but since we have to abide by that agreement, only the City of New York could change that agreement (including the resale policy). As mentioned the current resale policy was never shared with the shareholders (the board admitted to it when asked during a recent meeting of the shareholders and they didn't want to discuss it, because they claimed that it wasn't the right time, since most shareholders didn't even have a copy of it). And yet, at least one apartment is currently on the market with this new resale policy handed out to perspective buyers.

What does your attorney have to say about all of this? Why aren't they handling all the communications and negotiations between you and the seller, the seller's lawyer, the co-op board, and the board's president? S/he has a legal obligation to navigate you through these kinds of last-minute cockups. For the most part, the rest of us are armchair lawyers and the advice we provide is worth what you pay for it.

Good luck!

You're actually using one of the best resources for information about co-op and condo board members - Habitat Magazine. Check the archives for phrases like "co-op board member fiduciary responsibility". I believe they have more current articles than 10 years old.

If this doesn't work contact the Council of New York Coops and Condos (CNYC) at https://www.cnyc.com/. Check through their archives. If you're not already a member, become one.

Narrow your Google search to "NYC coop board member fiduciary responsibility". When I tried it, it returned 425k articles one-year-old or less.

"Fiduciary Responsibility" is a broad category with different meanings in different situations. The fiduciary responsibilities of a co-op board member are much different than an estate executor or of a financial advisor or the trustee of a trust.

I hope someone on here has an article or link that is on point to what you are looking for. If not, you will be exposed to more information than you thought possible but will be eternally grateful you found out about when dealing with your fellow board members. :-)

Good luck!
--- Steve

Here’s a few articles which nicely explain fiduciary responsibility. From 2022: https://www.joindaisy.com/blog/whats-the-fiduciary-responsibility-of-board-members

From 2021: https://www.armstrongteasdale.com/thought-leadership/overview-of-fiduciary-obligations-of-board-members/

Thank you sooo very much for the information! I was thinking of this, and did not know where to start. But I should have known better! HABITAT HAS EVERYTHING TO KNOW/SUGGEST, OR DIRECT COOP, CONDO BOARDS! THANKS AGAIN HELPED ME ALOT.

I lived in a co-op , not a condo. Any desired change to the existing by laws required that an amendment to the by laws be put to a vote of the shareholders, and it needed approval by 2/3 of the shareholders in order to pass.

You'd need to check your by laws to see the procedures and percentages required to amend the by laws. I'm sure that these procedures will probably be stated quite clearly in your by laws.

In our co-op, if that didn't happen, then the original by laws remained the law of the co-op.

If your condo was our co-op, then that merging of the 2 roles without a by law amendment would be illegal and invalid. So you definitely need to contact an attorney to find a course of action.

Trust me, if any of the people who illegally changed the by laws are still on the board, they will scream bloody murder at your proposed actions. But, stick to your guns. They will scream because they KNOW that they violated the by laws - and any challenge by you and/or other condo owners will be upheld in court.

Good luck and keep us posted.

I feel the best course of action is for you and all other questioning shareholders to engage your own attorney. You've provided very little information about this scenario (which is understandable). Only a trained attorney can evaluate the facts and offer an opinion regarding the board's fiduciary responsibilities vs. the business judgment rule.

Good Luck.