New York's Cooperative and Condominium Community

HABITAT

BOARD OPERATIONS


HOW CO-OP/CONDO BOARDS OPERATE

How do NYC co-ops and condos operate? Governed by an elected board of directors, these housing corporations are like mini-cities with their own bylaws and governing documents. Here you'll find articles on a wide range of topics that co-op and condo board directors need to understand to govern their housing corporation wisely. 

 

The Wallace Avenue co-op is filled with ordinary people who just wanted to have a home of their own. Michael Williams is typical. In 1990, Williams, a contract administrator for the city, moved into the recently converted co-op with his bride. He was elected to the co-op's board, on which he would serve in various positions over the next dozen years. He felt right at home in a building that's solidly middle class. His neighbors didn't have bottomless pockets, but they were working people — teachers and nurses, with a few lawyers and doctors as well.

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Having a condo association rent out a foreclosed apartment isn't necessarily a new strategy. But veteran real estate attorney Marc Schneider, a partner at Schneider Mitola, has a suggestion that is rare and far from routine, according to attorneys and managing agents surveyed, who say they hadn't encountered it before. The board tries to cut an "early bird" deal with the bank. This means that, instead of waiting two, three, or more years for its own foreclosure to finish, it could make a deal with the condo after the condo had foreclosed.

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Imagine a three-bedroom apartment that's been newly renovated from two-bedrooms, taking up the same space but with gleaming new floors, a state-of-the-art kitchen, improved lighting, and enough new electrical outlets to satisfy the most high-tech home. Yet the apartment-owner pays lower maintenance or common charges than the owner of an older, non-renovated three-bedroom in the same building.

Can that possibly be right or fair? And what if a disgruntled neighbor claims those renovations happened without board approval, either because the board didn't know or turned the other way? What happens then?

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One Reason Why Alteration Agreements Are So Important

Written by Carol J. Ott on October 14, 2015

New York City

 

"One of the things that makes a gas-out harder is [when] alterations have been done," says John Devall, the Orsid Realty manager of the 354-unit Vermeer at 77 Seventh Avenue in Chelsea. The Vermeer co-op had its gas shut off in October 2014, and has been spending months getting each line and riser tested and then turned on.

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Is your co-op board flexible enough to adapt when a self-employed person — with fluctuating annual income — applies for a sublet?

Many co-op boards have strict procedures for vetting prospective subletters. Conventional requirements include a W-2 income tax form (for one or more years), credit and criminal background checks, a letter from the previous landlord, bank statements, and personal and professional letters of recommendations. As a final hurdle, sublet applicants who are deemed worthy usually have to appear in person for an interview before the board's sublet committee or the entire board.

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The effectiveness of biannual meetings depends on how well the board understands their purpose: discussing, not deciding. Although such get-togethers are for informational purposes only — the residents are not there to decide on anything, just to learn — it does give them an opportunity to ask questions.

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Gas-Out Finances: The Cost of Turning the Gas Back On

Written by Carol J. Ott on October 12, 2015

New York City

 

Last week, we examined the first thing you should do if, following a gas leak, Con Edison shuts off your co-op or condo's gas. Next comes the hard part: addressing the damage and fixing it. Seems simple enough, right? There's a ruptured pipe, so replace it. Except that sometimes the fix isn't that simple. And that's when things can start getting really, really expensive. 

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Case Notes: Whose Terrace Is It, Anyway?

Written by Richard Siegler and Dale J. Degenshein on October 09, 2015

New York City

Does the board have the right to use a unit-owner's terrace to make repairs to the building? Probably. Does that right continue even if delays keep a unit-owner from using the terrace after the end-date agreed to by the board? Again, probably.

In Natalie and Geoffrey Richstone v. the Board of Managers of Leighton House Condominium, the court looked to the condominium's declaration and bylaws to decide not just whether the board had the right to use the terrace, but also whether the unit-owners had to remove their wooden installations. 

Natalie and Geoffrey Richstone own apartment PH-2B at 360 East 88th Street, known as the Leighton House Condominium. The board wanted access to the apartment and the adjoining wooden terrace (the Richstones had exclusive access) to install rigging equipment to perform water tests and repairs. Although the court decision does not offer much pre-litigation background, the Richstones granted access until March 31, 2014. The rigging, however, remained in place after that date. The Richstones sued the condominium, claiming breach of contract, trespass, and nuisance and demanded that the condominium pay $10,000 per month for its use of the terrace. For its part, the condominium board counterclaimed, demanding that the court order the Richstones to remove the wood terrace. There were a series of motions by both sides (and two decisions by the court) — basically, each side wanted the court to award relief based on their claims and arguments.

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A Bronx Co-op Gets the Worst Possible News

Written by Bill Morris on October 09, 2015

The Bronx

It was a few years ago — when Michael Williams was board president at the 190-unit co-op on Wallace Avenue in The Bronx — that he got "the call."

It was from a vice president at Marine Midland Bank, the holder of the building's underlying mortgage. The banker had grim news: he reported that "the sponsor was not paying the mortgage and the building was in trouble." For Williams and the rest of the board, it was "a wake-up call." Indeed: if the building defaulted on its mortgage and went into foreclosure, shareholders could end up losing their only assets and still be responsible for their personal mortgages. It would be, in the words of a veteran real estate lawyer, "the worst of all possible worlds." As one distraught shareholder at the co-op put it: "You don't want to lose your investment, your future, your children's future."

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It sounds like one of those Internet "clickbait" headlines, doesn't it? Except in this case that headline is pretty accurate. In a sampling of banks large and small, ChaseCitibank, and TD Bank all refused to comment about this "foreclosure trick." What are they going to say? "Congratulations! You got us! Condo boards really can foreclose on apartments in arrears faster than we can, and thus gain leverage over us."

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Ask the Experts

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Learn all the basics of NYC co-op and condo management, with straight talk from heavy hitters in the field of co-op or condo apartments

Professionals in some of the key fields of co-op and condo board governance and building management answer common questions in their areas of expertise

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