NEW YORK CITY

Transparency goes a long way to keeping shareholders in a co-op happy, but that doesn't mean boards should share every single detail about every single thing. The formula for how much boards share varies from building to building, naturally, and sometimes it causes friction among shareholders who may feel like they are being kept in the dark. That's the case with one shareholder who writes to Ronda Kaysen in this week's Ask Real Estate column in The New York Times: "Does the co-op board have any responsibility to communicate with shareholders? We have a meeting once a year, and the minutes are never distributed to shareholders afterward. Our maintenance went up this year and the board kept the real estate rebate. Do we have a right to know what these funds will be used for?" Kaysen explains that by law, boards "must provide shareholders with copies of the minutes of the annual meeting (but not the monthly meetings); an annual financial statement; and, upon request, a list of the shareholders and their mailing addresses. Some proprietary leases contain a provision that entitles shareholders to review the corporation’s operating records and managing statements." In this case, Kaysen observes, the board seems to be doing less than the bare minimum required. "If the board refuses to distribute the financial statement or the minutes from the annual meeting," she says, "shareholders could sue the board in state court to compel it to do so." And of course, if you don't like how a current board is handling things, you can run for the board or nominate someone you feel will have the building's best interests at heart. 

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?

Condos are a bit like rabbits, aren't they? You start with a couple and before you know it, they start popping up everywhere. That's been the case in Rego Park — once a distinctly middle-class Queens neighborhood with its apartment buildings, multi-family and railroad houses, and commerce. Starting in 2000, but especially since 2010, prices in Rego Park have been climbing with the influx of young professionals. And gentrification in this once affordable neighborhood has been building significant momentum. Take this new 7-story condominium rising only one block away from the 63rd Drive-Rego Park subway station. It's only the latest project to pop up in the neighborhood, says DNAinfo, adding that "the 23,398-square-foot building, at 97-30 64th Avenue, will include 23 condo units." On that same block, just a month ago, another condo — Great Stone Tower — was completed. "Prices in that building, according to real estate listings, can surpass $700,000 for a two-bedroom apartment," reports DNAinfo. Over in the following block, "another developer, Kenny Liu, is also planning to build a new 7-story 50-unit condominium building at 97-45 63rd Drive." And of course, there's the upscale condo, featuring Manhattan-style amenities such that include a gym, rooftop garden, and bicycle room, being built at 65-38 Austin Street.

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.

"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.

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.

In this week's Ask Real Estate column in The New York Times, Ronda Kaysen fields a question about mortgages: "Just before I went into contract on a condo, my bank denied my mortgage, citing 'investor concentration.'" Kaysen explains that while it's perfectly legal for someone to purchase several apartments in the same condominium, the problem lies with the banks. "In general," she says, "lenders will not give someone a mortgage in a building where one investor owns more than 10 percent of the apartments or where more than half the apartments are owned by various investors." We've talked about this problem before. For starters, too many investors tends to mean lots of rentals — and neither Fannie Mae nor Freddie Mac like that. There's also the very real concern that an investor who owns many apartments may default on his or her mortgage or stop paying the common charges. That's what happened at one Bronx co-op that found itself on the brink of extinction twice. Follow their story in the next few weeks.

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. 

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.

Okay, so a discussion about balancing budgets may not win any Most Exciting Topic awards, but knowing how to do it can translate to good financial health for your co-op or condo building.

I Was Told There Would Be No Math

Hey, being on a board can't be all glitz and glamour! You're going to have to crunch some numbers. But don't worry! We're here to help break it down for you. So, first things first: a good budget covers the building's annual income and expenses and attempts to maintain a strong reserve fund for future capital projects. And you'll need to differentiate between "operating" and "non-operating."