A Co-op Forgot to Send the Storage Bill — for Eight Years. Must the Resident Pay?

Is storage space provided with all units, my assumption,or is a clearly separate item like garage spaces? In the first instance it is reasonable the owner wasn't aware of the charge.

Thus the reason I don't like residing in a co-op building with fewer than 100 units. Assessments will be high given there's not enough people to spread the pain around, and the so-called "family-like" environment is bogus. Overtime, people will sell their unit and relocate for a variety of reasons, i.e., kids, school, jobs, and nothing tears a "family" apart like moola! Just have the tenant pay the six years over a two year period and high a new managing agent to manage this building.

A lot of problems with the legal analysis in this article. The statute of limitations is not the only problem the Coop would face in trying to collect the rent - it simply acts as a cut-off for how far back the Coop could seek to recover - it does not terminate any other defences that the member/tenant might have. The reality is that any decent lawyer (or judge) would immediately see a host of defences that the member/tenant could raise: • Waiver (and accord and satisfaction) - depending on the terms of the invoices the Coop sent, payment of those invoices in full by the member/tenant, and its acceptance and issuance of a receipt could be seen as a waiver of any further claims; • Detrimental reliance - the tenant/member could reasonably argue that they would have give up the storage locker rather than pay the $40 - and relied on the Coop's representation that they had paid all their obligations; • without looking at the entirety of the correspondence - misrepresentation claims may also exist. And I could go on and on, and on. Indeed the Coop may have a problem arguing that it is even entitled to the $40 going forward, depending on how it conducted itself earlier. That is an important issue - does the Coop want a dispute that might jeopardise future rent?

I'd love to know where this building is, just so I never accidentally buy a co-op there! Look, either: (a) there was a $40/month fee in existence WHEN that shareholder moved in, and shareholder should have been apprised of it & billed for it, OR (b) the board instituted a $40/month fee at some point after the shareholder was already living there, in which case I'd think a WRITTEN NOTICE would have gone out to every shareholder (and with a copy prominently posted in the lobby as well) stating that there was a NEW FEE and reminding everyone to pay it each month. If there's a managing company involved, that co-op needs to get a better one than the one they have! If there's no managing company, the Board is doing a lousy job communicating with the owners of the 15 units.

If it was a missed 'error' on behalf of the board then the missed payments should be forgiven. Send a letter along with a bill and explain that going forward, they will be billed monthly. Doing otherwise may upset the dynamics of the tight knit community.

For eight years the board couldn't keep track of 15 units. Seriously?

Whether or not the shareholder knew of the storage fee or forgot about it or never knew about it, if it is part of the documentation at the purchase, he needs to and should pay it.

There is already precedent in place for this side of thing, and it's in the co ops favor...Remember the street in California that was sold in a tax sale....

I wouldn't pay them a nickel. Make 'em come and get you. Then settle for 33%. Too expensive to sue. Their mistake, not yours. No Mulligans in NYC real estate.

question stated that the shareholder was never invoiced. in the reply, you stated “If everyone else is being charged, the shareholder should have known better,” Mr. Massa said." This is however a Co-op which differ widely in their rules and amenities. If the shareholder was never invoiced they could reasonably believe that their maintenance fee included the storage fee. They have no way of knowing that their neighbours got a specific invoice. The co-op should eat the past fees, they hadn't noticed it so far and the shareholder should pay going forward. The co-op should consider the competence of its Board and or Management company and the liability if the back fees should be collected rests on their shoulders (and pockets)

This is not uncommon. Unless the obligation to pay for storage was not in print, the shareholder legally can and ought to be held fully accountable. No free lunches, especially in a small building where every penny counts; indeed, the board would be dropping the ball by treating this shareholder favorably over the others if it did NOT bill the arrears (payment over time is ok and within the board's discretion). Only limitation is as the lawyer points out: 6 years for breach of contract if payment were not made. Also, as a technical matter, unless the building is self-managed, the managing agent has some explaining to do.

Could be an honest mistake from the resident's side. I once lived in a co-op where storage was included in the maintenance fee, and not billed separately. Maybe the resident had moved from somewhere where that was a common thing.

Something very similar happened to me. When I purchased a condo in Chelsea, the management company forgot to include a recent monthly charge increase in my maintenance. This was not caught - for NINE years, with $9,O00 owed. I was livid at the incompetence of the management company. I consulted an attorney who said essentially the same thing as this article. I had benefitted from the building services and thus owed the money - however the 6 year statute of limitations capped my liability to around $6k. We made a no interest payment plan and I paid it off. Interestingly, the condo's attorney didn't believe the statute of limitations covered this issue and we went round and round. Eventually the board relented and we struck an agreement.

The tenant should expect to pay the full amount, if not all at once, at least with installments. Co-ops can have assessments of $3,800 that can arise with unforeseen expenses. Depending on your co-op lease, payments for garage, storage, etc., can be legally part of the monthly charges making nonpayment a default.

The shareholder knew he should be paying for storage; bill him. Would the city forget to tax someone and say "forget it?" I think NOT.

Out on a limb here - small co-op, owners know storage is not free. Pay up and don't blame the over-worked Co-op Board for not billing.

Interesting problem. This definitely depends on whether the $40 fee is in writing and in some form that the storeroom owner could not have reasonably avoided seeing. I can see situations where someone thinks, "my monthly co op fee is X" and as long as nobody tells them their amount is wrong, keep paying it indefinitely without meaning any harm. It doesn't say much for how well this co op is run that this was not noticed for years.

Look-let's for get the law for a moment. Has anyone asked the member, after explaining the situation, what he thought should be done. He might just say-I owe the money or maybe he might say I don't think I should pay all or maybe half., At least you will know where you stand. Legally and although the Statute of Limiations on contract enforcement is 6 years- the member might have a valid defense using the legal principle of estoppel. But remember it just might cost a lot more to collect the $3800 in legal fees etc., So find a solution that will satisfy all. Like pay half over a 3 year period. Be reasonable!

If the co-op can't sue the shareholder for one particular month's storage fee because it failed either to demand payment or to sue for non-payment within the six-year statute of limitations, then the co-op should forgo trying to collect that month's fee. The reason is that, if the co-op could not collect that fee from an arm's-length third party because suit was barred by the statute of limitations, it shouldn't have any greater remedy with respect to a shareholder. Bill for the last six years only, and inform the shareholder that if payment cannot be made in full immediately, the co-op will credit partial payments of that debt in whatever the way the board thinks is equitable. The board's options would include, at the least, either applying partial payments to the earliest of the unpaid monthly charges in chronological order, or applying them half to the earliest unpaid charges and half to the most current unpaid charges.

So the resident bought into a co-op, knew he had storage in the basement, knew he had to pay for said storage, and didn't pay because he didn't get a bill? I have stuff in storage. At one point when I didn't get a bill, I telephoned. The secretary had been sick and bills didn't get sent. I paid double the next month. People want to get things for nothing. They need to grow up. Besides, if you own a co-op, $3800 isn't the end of the world.

A very critical point - upon which this entire question probably relies - is whether or not the shareholder knew (either immediately upon taking residence, or shortly thereafter) - that he would be expected to pay the monthly storage fee -- There have been instances where a tenant has moved into an apartment with the electricity and gas still turned after the previous tenant moved out -- The new tenant lives there for years - never bothering to inform Con Edison and establishing an account in their name - and never receiving a bill for ten or fifteen years -- Upon discover of this - Con Edison sent the tenant a bill for tens of thousands of dollars owed for gas and electric usage - The tenant refuses to pay - claiming that it was Con Edison's job to look after their records -- however, when taken to court by Con Ed, the judge rules against the tenant - finding that he knew fully well that Con Edison charges for usage - and finds him guilty of something called "Theft of Services" - and the tenant is help liable for all those years of unpaid usage -- If there is any clause or paragraph in any document (contract, shareholder rulebook, etc) which mentions the $40 monthly fee - then it would fall upon the shareholder to contact the board after a few months and mention that he notices he has not received a bill for his monthly storage - The real estate lawyer claims a statute of limitations - however I suspect that could even be challenged in this case...