New York's Cooperative and Condominium Community

Habitat Magazine Business of Management 2021

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LEGAL/FINANCIAL

HOW LEGAL/FINANCIAL PROBLEMS ARE SOLVED BY NYC CO-OPS AND CONDOS

When a Capital-Repair Majority Vote Is Needed, a Board Prez Comes Knocking

Lion's Head Condominium, 121 W. 19th Street, Chelsea

Lion's Head Condominium in Chelsea, Manhattan: 121 W. 19th Street
Lion's Head Condominium
Sept. 24, 2014

The board asked Markowitz to present a loan proposal to them, so she crunched the numbers and also spoke with Mindy Goldstein, a senior vice president at National Cooperative Bank (NCB). That lender offered the condo a 10-year, self-liquidating loan at a favorable rate, and so the board voted to pay for the bulk of the repairs with the loan and the remainder with operating-fund money.

Clock Is Ticking

Lachman looked at the problem and then looked at his watch. The bylaws required a majority vote of unit-owners approving a loan that exceeds $1 million. Normally, the board would send the owners an email or a print packet with information about the deal, and follow that up with a unit-owners' meeting. Too slow.

Lachman reversed the traditional process. Instead of the unit-owners coming to a meeting, Lachman went to them. He made plans to contact all 67 unit-owners himself, sending everyone a memo of the essential facts. Then he went calling.

"I basically presented the loan, in person, to everyone. I went door to door, knocking on people's doors, and I presented everything — the contractor's report, the numbers, everything," Lachman says. "I then answered their questions."

Lachman finally obtained his 51 percent majority — and then some, ultimately getting 61 percent in favor. He rushed the results to NCB. Then came the most excruciating part: the waiting game. "I was pushing our lawyers to push the bank's lawyers," he says. "And as we were locking in our rate, I was so scared. I started calling our lawyers four times a day and told them to be on top of the bank.

A Close Shave

"The morning of the day that we closed, I was getting a haircut," he continues, "and the guy nearly cut my ear off when I jumped for my phone. I pick up the phone, and [Markowitz] says, "It's 5.01 percent, what do you want to do?' I say, 'Lock it now!'"

After that, the actual work seems anticlimactic. The job, divided into three parts as Markowitz originally had laid out, is about to begin, always following Lachman's dictum: Keep everyone informed and involved.

"I thought the right thing to do was to go individually," Lachman explains. "This is a big number, you know?" He adds, "Either you do the damn job or you don't do it."

 

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Adapted from "Countdown at Lion’s Head" by Tom Soter (Habitat, September 2014)

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