HABITAT

CO-OP/CONDO BUYERS

Abusive Co-op Boards: One Shareholder's Story

Meredith L. Clair in Co-op/Condo Buyers

Abusive Co-op Boards

Four years ago, my partner and I signed a contract to buy a two-bedroom co-op apartment in a small, self-managed brownstone in Brooklyn. Although the place needed some work, the neighborhood was fantastic, and the four-unit building boasted amenities like private storage in the basement and two common outdoor spaces. We had a twinge of concern about what our new neighbors might be like, especially since there would be so few and all served on the board.

Looking back, it's hard to pinpoint the moment we realized something in the building wasn't quite right.

During the application process, the president's husband —let's call him Bruce — had been very aggressive with both our realtor and our lawyer. Although he did not serve on the board, he was apparently empowered to make such outrageous demands as requesting that our commitment letter and credit reports be sent directly from the lender and credit agency to him. Neither would comply because they said it ran afoul of privacy laws. Even so, Bruce continued to argue the point (unsuccessfully) for nearly two weeks.

Therefore, we were surprised to be invited for an interview. Bruce, still not on the board but present at the interrogation, eyed us skeptically as he grilled us. As we described our construction ideas in detail, the tenor of the meeting morphed into an all-out inquisition. Bruce stood up, and started circling us like a detective trying to coax out a murder confession. He underscored the importance of the building's "very strict alterations rules," though he never elaborated on what those were. The other residents, including Bruce's wife — the board president — sat quietly while he ran the show.

Bye-Bye Bylaws

Nevertheless, we were approved. At the closing table, our seller told us Bruce had a long history of tormenting everyone since moving into Unit 4 with his wife 10 years earlier, and that the co-op ran things differently than what the bylaws indicated: Instead of holding annual elections, the couple had decided that the residents in Unit 4 would be president; Unit 3, secretary; and so on. Several years earlier, Unit 4 had wrested the treasury away from Unit 1.

We were about to embark on our work. I combed through the bylaws, proprietary lease and house rules and found that the "strict alterations rules" existed only in Bruce's mind. Nonetheless, two weeks before our work began, we sent him everything we could think of, including our plans as well as copies of our contractor's insurance certificate, with the board named as an additional insured. The co-op already knew the scope of our work, which was purely cosmetic. But we never received a response. Then, the day our contractors began work, Bruce turned up in a red-faced huff and sent them home, claiming that he — he corrected himself, the board — hadn't approved our work.

The renovation was a disaster. Almost every day, Bruce knocked on our door minutes before 6 p.m. to send our contractors home, just as they were cleaning up to leave. This conflict turned out to be the beginning of what would be a four-year feud. We became increasingly frustrated that the co-op seemed to allow Bruce and his wife to reign unchallenged, even though they were frequently in direct violation of the governing documents.

The Residents are Revolting

We were determined to take the building back. The residents joined forces, and we strong-armed Bruce and his wife into attending a board meeting — the first in two years! In the face of their loud protestations, we all voted for bi-annual elections and deposed Bruce's wife (i.e., Bruce).

Several weeks later, friends invited us to buy the upper duplex of their house, which they were turning into a condo. We loved our apartment and had fully expected to continue our campaign to restore democracy to the building. But the prospect of a Bruce-free home, one we'd own outright and with twice as much space, was too much to resist.

Bruce's paranoiac power-mongering underlines some of the ways in which a co-op can fail its shareholders. And the situation could have been tempered if we'd stood up to Bruce years earlier. It can be tough — but essential — to face off with someone who seems to devote all his time to lording over the manor.

Adapted from Habitat March 2008. For the complete article and more, join our Archive >>

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