CO-OP FEES, P.2

However, going to the bylaws is not a move that Murray recommends because the contract between the corporation and the shareholder is the proprietary lease. The bylaws are the rules for running the corporation. Bylaws may reflect financial impositions on shareholders, but Murray says they should be just mirror images of what is already in the proprietary lease. If the fees are in the original bylaws, however, a court is more likely to support them than if they are added later on – particularly if the later amendment was only by board vote.

"Courts, in general, don't like financial impositions without specific authority. The bottom line is that if you want to put a financial imposition on your shareholders that is not specifically provided for in your original corporate documents, the [best way] is to amend the proprietary lease."

Bylaws by Law

Murray says she believes that co-ops and condos still impose fees without using the proper legal authority, such as amending the lease or looking to the original lease or bylaw language. For example, some boards might think that because the lease or bylaws give them the specific right to impose closing fees, they can impose additional fees, like late fees for tardy maintenance payments, or sublet fees. They may get away with it because shareholders or unit-owners think the actions are fair, so they don't make a fuss about it. But boards should take nothing for granted and check with their governing documents and/or their professionals to be certain they are on firm legal ground.

So, what did the Habitat survey find as the most popular fees? Purchase-application fees, with 78 percent of buildings charging them. The dollar amounts ranged widely, from $150 to $1,500. The least common fees were those for bike rooms and parking, with only about half of buildings ringing them up.

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