An old joke has it that if your board is desperate to reach a quorum at your next annual meeting, simply announce that you’re planning to renovate the lobby. You’ll get an SRO crowd every time.
Yes, a lobby renovation is a minefield because there’s no explaining taste. That was the case at a co-op in the Flatiron district, where the board hired a design firm to renovate the building’s two lobbies, and shareholders were shown two concepts with price tags of $500,000 and $750,000. Months later, however, the managing agent sent out a letter saying the cost had risen to $1.2 million, and shareholders could view the updated renderings on request. There were, understandably, howls of protest. What are the shareholders’ rights, and what can they do to lower the cost of the renovations?
“When the board acts for the welfare of the cooperative within the scope of its authority and in good faith, the court will generally not overturn the board’s decision,” attorney Perry Mintz, a partner at Gallet Dreyer & Berkey, tells the Ask Real Estate column in the New York Times.
But while the board may have acted within its rights, that doesn’t mean it did the right thing. “Shareholders need to feel that their aesthetic preferences are being heard and respected,” says Susan Lauren, the principal of Lauren Interior Design. She suggests that co-op boards establish a design committee to oversee the décor and send shareholders newsletters with regular updates. The board should also survey shareholders about their design preferences at the start of the process.
Mintz advises disgruntled shareholders to contact neighbors and send complaints in writing to the managing agent and the board. If the board is unresponsive? You can always vote in new leadership at the next election.
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