I have been a member for 4 yrs of 40 unit co-op with 11 vacancies. There are board members that we have no contact information for, no management company and the board president is the only contact and if you're not apart of her team then you don't get any answers. A group of co-owners asked to see accounting records, we were ignored. The group hired a lawyer to gain access of accounting records even though we should be able to see the records at any reasonable time, we were still ignored. There was a recent election for a new board, the president came with proxies as if the vacant units were now occupied and allowed people to vote 2 times that owned 2 units. I understand people's pain when it comes to co-op's and for me, it's just time to relocate.
3
I have lived in well-run Upper East Side prewar coops for 27 years. The strict vetting creates a safe living environment and the feeling of a neighborhood..no absentee owners etc. For the most part I have found that while board members occasionally create needless hurdles in the selling process, they are rational and giving of their time and effort. No one wants the job. HOWEVER...this form of ownership no longer makes sense in Manhattan. Younger buyers do not want to jump through hoops and reveal social and financial information to strangers when there are so many condos to choose from. They are not drawn by the clubbiness and prestige of specific buildings or neighborhoods (In fact, many view fancy Park Avenue buildings, for example, as stuffy and for old people.) The inflexibility of many coop rules..you cannot rent, or you can only rent for a limited time after meeting onerous financial requirements, buyers have to show liquid assets and sometimes considerable social connections, construction plans have to pass the board..is dampening prices considerably. Coop boards have to loosen up or owners will keep suffering losses on the prices of their apartments and face the difficulty of selling them at any price.
3
I live below a german art dealer and her two grown children. Everything is fine till about midnight when they move furniture and pound on the ceiling above my bedroom. The woman is on the board of the building; Orsid the coop management and the board turn a blind eye to my pleads for help. This is hostile behavior, abuse and harassment. Please help !
2
I am very pleased with Mr. Mohd’s leadership. The new windows were very much needed because the old ones had moisture inside. The entire building complex had to be done uniformly.
Mr. Mohd works very hard and devotes a lot of effort to maintaining things and keeping maintenance low.
Windows money doesn't come from Mr.Mohd's pocket. It's shareholder money.
Money he spent on windows, we could have all new windows including Bathroom and hallway.
Do you know why maintenance is low? Because he sold so many board own apartments and got commission from it.
7
'Low' maintenance is a reflection of the building, and it is relative. You get what you pay for- too low and the building is probably not being well maintained from all vantage points (cosmetic and board-related); too high and there are likely other forms of mismanagement, financial or otherwise. People forget that as all costs go up, so should a buildings' maintenance when it is being properly maintained, keeping the property updated to new code standards (eg. LED lighting and fire alarm standards) and competitive in the real estate market!
4
Agreed, Is there a way to compare monthly dies per sqftfor each building per neighborhood?
It be great to discuss this with others
Cheers
2
I have owned my apartment for the last five years and have been a part of the co-op board for the past two. We only have 20 units and everyone pretty much knows each other. There have been bad board members and great ones, but at the very least everyone was decent. One thing I can say that I have learned is that there are three types of people who join boards - 1) a person who actually care about the building and wants to ensure its a great place for all shareholders, 2) a power hungry shareholder who thinks they know best and wants everything done their way and 3) a person who just does it without truly wanting to deal with the hassle that comes with it, so they suck. For those who are unhappy with your building's board, run for it and when you are on it, change bylaws so that its much more democratic.
10
Suggestion for a story: Penn South.
Just a walk around the property suggests problems. They have property line markers but their fences extend on to city property.
They have rules for air conditioner installation and they insist on doing the work for safety, but see if you're stronger than their aluminum brackets.
They have rules . . .
2
I've been living in the same pretentious UES coop for twenty-five years. A substantial number of members on the board today were on the board when I moved in. Most members of the board and the managing agent are corrupt and dispense with rules in the proprietary lease with impunity! It's a nightmare where the board makes a profit off of everything: fees collected from shareholders that are meant to defray costs for the building upkeep get "lost" all time. Rules are enforced serendipitously and with gross prejudice manner. Conflicts of interests are shocking and the tenants who aren't social cronies of the board are treated like garbage! My neighbor just performed a major renovation and broke rule after rule. The Board never enforced any rules it doesn't want to enforce. I am lied to with impunity, constantly. The public spaces in our building are in gross condition. We may be a Park Avenue building but once one passes the lobby the conditions on the all the shareholders floors look more like a run down tenament a slumlord would be proud of.
6
Has anyone mentioned George Costanza's attempt to buy a co-op?
2
Two years of pure living hell at 15 East 10th Street, New York, NY, a.k.a. The Mayfield. Threats, fines, abuse, nasty notices posted on our door or slipped under it, you name it, because we had two puppies that barked when someone went by our door – this in a building we moved into because they claimed to be 'Dog Friendly'. We had no Dogs and took the apartment precisely because of their Dog-friendly policy so we could get the pair.
Excuse us, Dogs BARK!
Rigged elections as well!
Unfortunately our apartment was next to the dogless Board treasurer and down the hall from two other Board members. We were forced to install a 'sound-proof' that was not. That was after our male was certified a "companion animal".
After an accident that caused me to be on crutches for over a year and continuing threats, especially from the treasurer mentioned.
We got ourselves a small cottage in Greenwood Lake, 60 miles from the city as a weekend retreat. The weekends just grew longer and longer until we stopped returning to the City altogether and put our co-op up for sale – we just opted to leave.
Eventually we not only left New York but the USA for Canada, where my wife is originally from, into a three story Victorian house we've restored TO OUR LIKING in a small college town where people are most cordial, friendly, and so welcoming of Canines coincidentally called Wolfville.
'Co-op Board', an oxymoron if there ever was one!
New York City, co-op buildings, you can keep.
14
This article was very well written, and eye opening for me. I’ve owned a condo and a co-op in NYC, and never experienced problems with either board. I also served on the co-op board, and that was a positive experience too.
I truly hope that the city or the state steps up to the plate with respect to condo & co-op board elections. With any form of governance, fair elections are the answer to almost any problem.
These comments are really bizarre though! My take:
1) To the folks who can’t imagine why anyone would live in NYC: You’re right, you probably shouldn’t live in NYC. You wouldn’t like it.
2) To all the people who had such trouble with slippery condo and co-op boards: Ick! Please keep pressing for fair voting! I think you’re in the minority though. I’ve known quite a few condo & co-op owners in NYC, and I’ve never heard stories like these!
3) To all the people who don’t understand why a co-op might be better than a condo: It’s a simple trade-off. You can live in a building where you have complete flexibility to rent or sell your apartment to anyone, or you can live in a building where your neighbors don’t have complete flexibility to rent or sell your apartment to anyone.
4) To the people who comment on every article with derogatory comments about Trump: Stop obsessing already. Trump didn’t cause every problem we have now any more than Obama caused every problem we had for his 8 years.
10
For 10 years we’ve been living in a 10 unit co-op in Jackson Heights. We are a self-managed building, and overall it’s been terrific.
All decisions are voted on, and it’s a very accommodating group. We feel lucky.
One benefit of a co-op is having the opportunity to meet your neighbors before they buy. We lived in condo’s previously, and there was no vetting of owners at all. If the bank approved the loan they got the condo. We had many, many issues where the new condo owner had never lived in a multi-unit dwelling and did not have any common courtesy.. Insane parties, not paying the common fee’s, etc. While I would prefer to own my own private home, our co-op experience has been positive –and after reading the horror stories in this article I feel very lucky!
7
The AG's office real estate office was decimated by Cuomo when he was AG. Currently, they never recovered and staff is limited. There is so much coop corruption that Jim Rendon the author of this article could have a weekly column. For some reason there is no grading review from property managers and this is the big problem in NYC real estate. Who is managing your building and what their qualifications are? How many buildings they run and all the violations on the building? The elected officials, the public advocates office are pretty useless when it comes to real time solutions for coop owners, and for some reason Senator Liz Krueger had a bill to have an ombudsman's office for coops, and I gather REBNY squashed that idea, thus the reason the elected officials reached out to in this article remain mum.
14
All excellent points made by Northern Manhattan. People haven't noticed how disinclined Cuomo is to take on Trump. Two kids who grew up in the Queens political graveyard.
2
I have sat across of many board members over the years in various negotiations.
For the most aprt these are thankless rolls. Every now and then I would come across someone who was board president for many many years. I often noticed a "My Building" mentality with these people.
4
Every owner in my condo association should have that perspective! I do.
I am a member of a co-op Board. The experience has convinced me never to own a community based property again. What I've seen as a Board member makes me wonder why some of my neighbors decided to live in a "cooperative" community because their actions are guided by self-interest, rather than the interest of the co-op. From fellow Board members cozying up to vendors, who then overcharge us, or other Board members pitching vendors to provide co-op services, who we later learn are good friends. The Board power structure is biased towards individuals who have more time and energy to devote to the machinations of property maintenance. For the rest of us, who thought "getting involved" was the right thing to do, it's a sysiphean task. The end of my Board term can't come soon enough.
18
Aside from sainthood, the only motivation for sitting on coop or condo boards is self-interest (especially in the case of developers who get the opportunity to draft the rules which also exempt them from being held responsible for pretty much everything). When building agency intersects with board membership and building management - watch out~!
2
Boards should have term limits and serving on them should be compulsory. Every shareholder should have to know what's going on in their corporation.
21
Those giant statues of Uncle Sam at the front of the Queens condo building are certainly unique. And they would tell any potential buyer that there is something really weird about the building.
19
Every time that I read an article about New York City real estate, I realize that I need to thank God that we don't live there. Why would anyone want to buy, or even live, under such conditions as described in this article? Much happier to own our own house and land, and not have to worry about co-op boards and homeowner associations, thank you. I know that it must be for some, but how could living in New York City (or another big city) possibly be worth putting up with these kind of antics?
16
Culture; jobs you can't find elsewhere; fascinating people. No-one is forced to buy a co-op, are they? (Are they?) When I lived in Boston I thought THAT was the big city - I can only imagine living in NYC and how much fun that would be. (However, we are on the incomes of a retired schoolteacher, and her metal-working artist husband, hardly NYC $ for cost of living. We do, however, have tones of air miles due to my husband being from Cape Verde, so we shall have to include NYC more often.)
5
I live in nyc in a beautiful and very well run coop. I don’t spend my off time cutting grass. I’m not a slave to an automobile. All the city’s attractions are convenient. That includes world class culture and medical care. I can be at a stimulating and well paying job quickly. When summer comes great beaches are nearby.
Every time I read an article about rural America I thank god I don’t live there, since it’s basically rusted factories and opioid addiction.
Just kidding. You can’t generalize. The life I have chosen works very well for me. And given the outsized prices of urban real estate in general for many. The fact that you would never live in nyc is irrelevant.
23
There's opiod addiction everywhere. Come to my community - it's beautiful; the people are sweet; the rents are low. Albeit we don't have the Met &etc.
2
Co-ops sound like their for the birds. Glad I've been either a renter or a homeowner (of a house). Who needs the tsores?
7
I owned a condominium unit for 10 years where there are many fewer rules governing occupancy and general owner behavior than a co-op. That can lead to problems.
I DREAMED of the day I would sell that apartment and buy into a well managed co-op with rules up the wazoo. But for now I'm happy just being a renter in a very poorly constructed new building that I am relieved not to own!
16
Co-op inheritance is going to take down co-ops in NYC. Nobody in their right mind should ever buy a co-op. We are two years into our own co-op wars with an old proprietary lease (which is better than a new proprietary lease), and yes, we have finally lost because they always win. Hopefully we will be able to sell it, but after reading this article, who knows. Could it be that this asset is worth nothing except two years of our lives? So wrong.
16
We need more articles calling attention to the widespread corruption of coop boards and the need for better regulation and enforcement at least of fair coop board elections. The only recourse shareholders have for a bad Board is elections but the elections themselves are not protected in any way from interference and corruption. I was illegally prevented from voting last year in my coops election and my candidate, an outsider to the boards inner circle, lost by 3 votes. I spoke to everyone on the board and the coops lawyers and managing agent about what happened and got zero support. In fact they began a laughable counterattack to smear me and intimidate me. Unfortunately I don’t have the time or resources to sue and would fear retaliation so i haven’t done anything more about it.
19
I get votes being "miscounted/lost" but a Shareholder voting - how can that be prevented either in person or by Proxy? Just curious.
1
An accountant appointed by the board's manager is supposed to count the votes and make sure a quorum is present. A concerned shareholder should be sitting in the room keeping an eagle eye on voters who cast their ballots however as a witness to any trouble present. ALso signatures are needed. A ballot must be given ahead of time to all shareholders and checked off for how many and which candidates. My coop board has not been posting the counts and does not reveal that even when asked although minutes are posted. I hope the new state rule fixes that.
1
In person. When you check in to the annual meeting they are supposed to give you a ballot. I signed in at the front as instructed but they didn’t give me a ballot and I didn’t realize I was supposed to receive one as I am new to the building. I sat through an hour and a half annual meeting but when it came time to vote I didn’t have a ballot. I went to speak to the lawyers and the entire board, in person at the meeting, and they all refused to give me a ballot or allow me to vote. The lawyer had the nerve to tell me that one vote doesn’t make much of a difference so I shouldn’t worry about it. I wrote a letter to each board member about what had happened and heard nothing back. Interestingly enough my candidate lost by 3 votes.
2
Years ago when living in a Co-op building in Park Slope, the buyer of my unit was rejected by the board, throwing my attempts to sell and buy a single-family home into turmoil, one contingent on the other. The eight-unit building's board seemed more perturbed with how much money we were making on the deal, so we had to find a new buyer (we got a higher sale price the next time), we kissed every butt in the building and the sale was approved. Too often Co-ops boards breed pettiness, envy and irrationality. Steer clear.
37
The typical NYT's article about real estate is usually a puff-piece or about something silly. This article, however, is relevant. well written and obviously well researched. There should be more like this.
51
I agree with you. Look what stories the Real Estate section has been running today and yesterday.
Mr. Mohd’s defense that he is a real estate broker who can be looked up on Zillow, etc, and that his reputation is all he has, all rings false. Anyone who has ever been run through the wringer by a slippery Realtor knows that it’s difficult and often futile to fight them. They get away with murder.
Earlier this year I had a Realtor of supposedly blemish-free reputation steal from me (stole items from the house and padded her post-commission bill outrageously). About 15 years ago a Realtor in my community was finally taken to court after stealing tens of thousands (each) of dollars from a huge number of clients, by taking “loans” from and offering outrageous interest on repayment. Then he would come up with reasons to delay repayment, and ultimately he just stole the money. (I knew someone who lost $30k to this guy.) He walked away with a slap on the wrist and went right back to selling properties.
Reputation? For a Realtor?
20
I remember a saying from years ago that "realtors are people who were kicked out of the used car business for unethical dealings".
Too many realtors live up to the saying.
11
I've long referred to real estate as the world's "second oldest profession".
1
The majority of Manhattan coop boards are corrupt enterprises that operate for their own personal interests. There is almost nothing that can be done if they break the law, illegally discriminate against potential buyers and engage in criminal retaliation.
16
What I never understand is that many of my neighbors will wrap themselves in the American flag and totally embrace the ideals of our democracy. But at the same time, they’ll be totally accepting of the anti-democratic, corrupt ways of an HOA Board whose practices would be recognizable in China.
15
All politics is local.
Belal Mohd is using shareholder money to fight against shareholder. He does not have any family member live with him. He is there because he can get commission by selling and renting apartment. He sold so many board own apartment and got commission from board.
He is sole person control everything. Election time he collect most proxies from people he rent out there apartment. He count opposition party proxies but opposition party do not have right to see his proxies. He and his appointed person count vote and declare result. Democracy has no Voice. Either you are with him or you are against him.
This must need to be stop.
24
Monitor the election.
2
The coop is well run with low maintenance. My husband and I are very happy with Mr Mohd and believe he is doing a terrific job. There is a reason he keeps getting re-elected.
1
Whenever there was an election. Mohd appointed himself inspector of votes/proxies while denying shareholders' requests to inspect his votes. There is a REASON he keeps getting "re-elected".
6
Co-ops are awful- I feel sorry for Manhattan residents who generally have to endure this nonsense. Seriously, you have total control over my ability to sell the largest investment i have ? That's insane. Excellent point about minimizing the degree of shred mechanicals-good luck in many of those older NYC buildings....Really, is living in NYC REALLY worth all this hassle and Agita ? Life is too short-get out of the city more often, you can get a great meal, and avoid all those narcissistic dog owners stepping on your feet as they rush their Chow Chow to the Lennox hill pet hospital for a CT scan because the animal is "depressed."
11
You might note that Aetna decided to move its HQ from Hartford to Manhattan. The decision was reversed as a result of their being acquired by CVS, but Aetna cited as a reason for the move the advantages of large world class cities in attracting and retaining a talented and diverse workforce.
6
@John: Have you ever actually BEEN to Manhattan? I wonder, b/c you seem to have a very loopy view of what goes on here.
Don't waste time feeling sorry for Manhattan residents; most of us wouldn't swap for Hartford.
13
And Amazon turned them down for Amazon #2. And businesses have been moving to New Jersey for decades to get out for a variety of reasons. (now they're leaving NJ and coming here)
Believe it or not talented and diverse work forces are in a lot of places besides New York City.
2
the equivalent in Australia - strata committees - tend to attract toxic individuals - either selfish egoists or ruthless rip-off merchants.
We spent five years slaying one such dragon - a psychopathic female who doubled the price of repair quotes so she could pocket half – and who attempted a hostile takeover of the management company by paying dodgy men in nice suits to knock on the foreign-language residents doors with 'do you want to save money ? - sign here !' to get the required proxies.
After a half hour of stand-up shouting match with enraged residents, I finally got the too-soft Chairman to declare her motion Out of Order - and we won (her attempts to sue us later notwithstanding).
Since then every meeting has been a beautiful day - friendly, efficient, effective - we solve all the problems - over a meal at a local restaurant. Whew !
18
This is an example of the NYT lighting fires under crazy peoples wood piles. So many crazy people in NY subscribe to conspiracy theories about their condo or coop boards- you never once mention all of the frivolous lawsuits volunteer unpaid boards are subject to. Increases in property taxes and a citywide trend in management companies pimping buildings common areas have contributed to the duress middle income homeowners experience, This combined with international buyers looking for safe havens for their money in NY real estate creates unusual strife in buildings that once had no difficulty sorting their routine problems.
5
"citywide trend in management companies pimping buildings common areas" = translation" management companies try to sell 'improvements' that often cost buildings more money than they ever bring in - under the guise of "it will improve resale value" - a representation often unsupported by any comprehensive qualified comparable price analysis. Often the best management involves doing as little harm as possible and dealing with the real maintenance nightmares foisted upon buildings and their owners such as the Local Law 10/11 exterior maintenance cycle compliance program and all that can entail. Ask the owners of apartments in buildings with beautiful exterior detailing what "terror cotta is" and you'll learn what I mean.
1
Much of Real Estate is the most sleazy business out there!
16
This article resonates with me. The fees and fines make no sense, for e.g., background and credit check fee $225/- . Additionally, there is no redressal mechanism to hold the management company accountable. Board members hide their contact details so that management companies have a field day yanking around owners. There is huge business opportunity in the area of managing buildings in NYC. I do wish there were laws on the books to hold the management structure accountable.
20
This piece is not the rule, but it should be very troubling to the NYSAG that it is far from the exception, either.
There is a long and often ignored history that crops up time and again of disgruntled Coops filing lawsuits, which are a last resort as they inflict value and reputation damage on all, not just the abusers in a coop or condo.
Unfortunately, there is a long history of building management companies working hand in glove with boards to up fees and fines. Why? Many point out that the managing agents work on thin margins, and such fines and fees help float their profit margins.
Those of us who have hoped to escape through buying into condos have raised the red flag when managing agents arrive and immediately attempt to impose and improperly "copy and paste" coop rules and structures onto condominiums. The argument that "owners often want more control over their neighbors and their buildings" only holds water up to a point - yes when it involves an overflowing bathtub, "no" when it involves issues protected by fair housing laws, or even certain elements of 'lifestyle' and certainly politics and freedom under the first amendment.
Owners should check out the comments on various media very carefully and interview tenants of other buildings carefully when considering managing agents. As a field I have encountered a wide range of individual characters in it, from the best to the criminal.
Brokers on boards should recuse themselves from considering sales.
31
There is perhaps no more egregious example of these shenanigans than the situation at 101 W. 23rd Street, at the corner of Sixth Avenue. The board didn't tell prospective apartment buyers that they were looking for someone to buy the whole building. The lead board member found a buyer for the units at less than half of what the market value was and lied and railroaded everyone into selling.
7
My brother a real estate investor and lawyer, warned me off this building. He told me it had too much concentrated ownership, a land lease that has some title clouds possibly and an opaque FAR situation that was 'politically vulnerable' to getting restrictions removed from it by a new owner/buyer, who could then possibly gain value by adding floors. Too exciting for me.
7
The board member was also the agent for the sale.
10
This is a somewhat 'notorious' building in Chelsea - If my recall is accurate, a couple of years ago litigation was brought by a group, and money laundering to one of the interests that is also supposedly being looked at by the Mueller investigation for investments with Trump was implicated. Plus Joe Chetrit was involved in the deal, whose name is poison to certain neighborhood preservation advocates over his activities in the famed Chelsea Hotel. 'nuff said. I would not take on a property like that as a home if I was looking for peace and quiet. Stand on the corner there for fifteen minutes at any time from 8AM to 11PM and you'll see or hear what I mean.
7
The general tone of the comments here is that the article just proves that coops are bad and should be avoided, presumably in favor of condos.
The reality is that, while there are a few bad apples out there, the vast majority of coop boards (on one of which I serve) ensure the well functioning of their buildings. The coop structure enables us to prohibit subletting and air bnb rentals, maintaining the building as a community of those having common interests. It means that we vet potential purchasers for financial stability, avoiding defaults of maintenance fees and the disastrous effect this has on the overall budget. Finally a coop’s rights are more favorable than a condo’s when a default does occur.
14
Agreed that a well run coop can be a wonderful building. But, so can a poorly run one seem like a despotic nightmare. As for many condos - their managing agents often try to morph them into coop rules out of greed, incompetence, or convenience. Board members often agree to such rule changes without understanding their long term consequences, or because they stand to gain personally.
13
Actually my experience is the opposite: coops that attempt to morph into condos. Allow sublets, low down payments, cursory review of purchasers. Benefits those that are leaving not the ones that stay behind.
5
I've owned three co-ops and would never, ever do it again. When it comes right down to it, people are just not inherently cooperative; they almost always look to serve their own interests first. In order to address issues with the Boards in the co-ops I've owned, I had to get on the Boards myself, and it is a lot of work--meaning you come home from your regular job and then have to start the job of managing the place you live. So grateful to have left it behind and now own a home of my own. It's plenty of work, too, but I get to make the decisions, I am responsible for the work, and if it doesn't get done, I've no one to blame but myself.
25
The co-op experience does not have to be awful. Here are suggestions for best practices. Adopt term limits, such as three years, to prevent any one person from dominating the Board for an extended period of time. Do not permit fines. They are an obvious tool for the abuse of specific residents. Adopt a conflict of interest policy that prevents board members and their family members from brokering apartments or otherwise rendering services to residents “required” for board approval, such as architectural services for apartment renovations. Require board minutes to be distributed to shareholders and residents within thirty days of each meeting. Require that the annual budget be circulated, showing how much of the budget goes towards real estate taxes, staff salaries, and other items, such as physical maintenance or discretionary items, and what those increases are. Have one or two building wide gatherings or cocktail parties each year, so that residents have an opportunity to meet and speak with each other. Use the gatherings as an opportunity to identify potential board members. Avoid board members who do not reside in the building on a regular basis and who are not available to address issues as they arise or to interview prospective purchasers. Consider replacing the managing agent to obtain up to date modern services. Acting as a managing agent is a competitive business and the quality of services can vary greatly.
34
"Do not permit fines. They are an obvious tool for the abuse of specific residents."
Absolutely true. These are the specific residents who put the health and safety of all shareholders in jeopardy with their inconsiderate and selfish action.
Our Board has fines for not following renovation procedures, where detailed renovation plans must be submitted to the Board prior to work being done. This includes using only NYC licensed contractors, plumbers, and electricians.
Without them, shareholders would use unqualified people to work with gas pipes and water pipes - especially gas pipes. Only a licensed plumber should
be working with gas pipes.
Can you imagine unlicensed Joe Blow working on a gas pipe, doing something wrong, and having the building explode?
That's why fines are a necessary evil for renovations.
16
Good luck finding enough would-be board members to enable term limits. I'd have left my board years ago if we could convince just a few more of our shareholders to run for the board. Most years we have eight people running for seven seats, and one of the eight is a former board member who was thrown off the board long ago by the shareholders at a special meeting.
The other suggestions are excellent and most are followed by any well-run co-op, of which there are many.
5
Yikes! After reading this article I am truly blessed to live in a Co-op building that has a competent board and that is run on a daily basis by a wonderful competent staff.
27
"blessed to live in a Co-op building that has a competent board"
Competent people for board members are the exception. It is sort of like the voters who cast their ballot for Trump to be the next President! In a nation with more than 300 million people they picked the worst candidate of all. Only when a task is given to the most ignorant of a group do you end up with a result that makes no sense all all. Anyway, if it makes you feel better; we have lots of politicians who fits the ignorance model. They do not understand that you are their employer.
2
circles of wealth and power and influence. It's been going on since grade school. There are cool kids and then there's everyone else. That's why I never go to board meetings. They're going to do what they want to do and they just want everyone to go along.
10
That’s funny...what I thought of while reading the posts here was the Co-op Board equivalent at my high school (a pricey, private, all-girl college-prep). And yes, I was not in that circle.
2
We are seeing many of these same shenanigans by the Board, the management company and the contractors at our HOA. Many otherwise intelligent homeowners are woefully unaware that they have absolutely no protections beyond launching a costly lawsuit.
You have to wonder who is lobbying our state legislature when our own attorney general can’t be relied upon to protect individual HOA homeowners. Perhaps it’s time to demand some action from our state representatives.
In the meantime, we are educating our neighbors that they can no longer allow our rogue Board to act with impunity. They need to be voted out.
11
Why am I not surprised....
It's the same old story from New York to Vancouver.
Board positions are generally volunteer, so it's not the money it's the power that attracts .... and the POWER they exercise relentlessly and more poinently without oversight and/or recourse. Whatever oversight and/or laws that may exist generally don't have any consequence against the board for misdeeds, additionally many times the board member cannot be held personally responsible. Leaving the corporation to pick up the tab for any misdeeds.
An unfortunate situation....just another Machiavellian example of how: "Absolute power corrupts absolutely."
23
Board positions are ALWAYS volunteer. Anything else is highly suspect, and possibly illegal. I doubt the AG's office would approve an offering plan where the board members are paid.
Also, perhaps you are unaware of "Officers' and Directors' Liability Insurance," which any sane board has - it protects the corporation from "having to pick up the tab for any misdeeds."
3
The concept of a “co-op” is weird to most foreigners, and probably to most Americans too. While they are part of the landscape, the idea that other people would decide to whom you can sell your property, under criterias that clearly lack transparency lending itself easily to practices that shouldn’t be accepted (racism being the obvious one, but cronyism, ageism, or classism are not much better), seems so wrong that one can wonder how they could exist in the first place.
The fact that they are poorly regulated, leaving people with little recourse when things go wrong, makes the issue even worse.
Oh, and who can in their own mind think that owning shares rather than an apartment is normal, rather than a weird legal gimmick (with serious consequences if the co-op goes bankrupt)?
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@Bob: Co-ops ARE regulated by NY State Corporation Law. If you buy into a co-op, you need to understand what you're getting into, which I find most people do NOT. Most people can't even tell me the difference between a co-op and a condo in terms of ownership, boards, restrictions, etc.
As to "owning shares" - do you have any investments in stocks? Because those are also shares of corporations. Do you consider that to be a "weird legal gimmick" also?
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We have something similar in Australia, called "company title" for apartments. It's a relic of former ownership legislation prior to 1961 https://www.realestate.com.au/advice/strata-title-company-title-whats-di...
Since 1961, new apartments have been strata title, where the owner has title to the space of the apartment. In company title, the owner purchases shares in the entire building, but located at the address of the apartment. It also means that the board has to approve the sale (not so, for strata title).
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I did not say they were not regulated (the article clearly mentions they are), but that they were poorly regulated. If the board misbehaves, but your only recourse is to sue, prove damage and get reparation, this is clearly not as solid a system (and actually a pretty bad system as the examples in the article show) as if there was a regulator that would by itself control boards and order fines. Not as efficient either, since homeowners don’t generally have the expertise to understand and investigate wrongdoings (unlike regulators), and lawyers are much more expensive than regulators’ employees.
And I maintain that the share system for coops as a gimmick: why do you think some people can’t make the difference between a coop and a condo? Because most people when they buy housing expect to own their home. That’s the whole point. Any other system is a weirdly circumvoluted way to achieve this, and just like other complicated ways to do something simple, do not work as well as the simple way. An apartment is not a company, and shouldn’t behave like one, so your example of company shares is silly.
As a buyer and seller of 2 co-ops in Queens I can absolutely state I would never buy another co-op again. I don't understand why co-ops are basically given a carte blanche to do what they want. As the article states, there may be laws on the books but no one to enforce them.
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@kaydee: I will bet you know nothing of the actual corporation laws in NY State - which is why you don't understand the "business rule" under which co-ops are supposed to operate. They must be run for the benefit of the MAJORITY of shareholders. If anyone has a problem with a co-op not adhering to the corporation laws of NY State, they should contact the NY State Attorney General's office with a complaint.
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Unfortunately, I have sensed and bad behavior at my coop as well. When the coop informed me that repairs needed to be made that involved my unit structurally, I was upset, but happy that they offered to roll it into existing work on the structure. My mistake was not getting a timeline guarantee in writing (I am not a fan of litigation).
Six months later I decided I needed to sell the unit because of a career change and notified the managing agent of my intent to sell; however, it took the coop nearly three years to complete the work. In that time I burned through my savings, went into arrears (which the coop moved quickly to file against me) and had to sell the coop at a significant discount.
My mantra now - when in doubt - don't hesitate to retain an attorney to get things in writing from your coop board.
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Be happy that most NYC condo and co-op owners don't need to cut the grass. Some Florida HOA's have over-the-top landscaping committee members who actually measure the grass to see if owners are complying with the HOA grass length standards. Most don't allow artificial turf.
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At our condo in Riverdale NYC, the renovating contractor still owned a bunch of yet unsold units so she basically could vote over anyone else. Unfortunately, there were shared mechanicals from the early 1980s that needed immediate work but the contractor would have had to pay for the bulk of repairs and updates (because of her total shares in unsold units) so the work never got voted on at all. Even worse, the current board voted however she wanted -- unanimous every time on everything. We sold four years later. Not worth the hassle. If I had to do it again, I would have asked how old the building mechanicals were before I bought. Asked to see them with my inspector, etc. The next condo we bought had no shared mechanicals, which was great.
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An experienced transactional real estate attorney - such as Steve Wagner, who is mentioned in this article, but there is a known group of them, I have a 'go to' list of five to ten I regularly recommend to clients depending on what they're looking for, look for 'red flags' in Offering Plans such as a significant % of unsold units. And buildings being marketed by a renovating contractor or novice developer always invite special scrutiny. Looking under "Special Risks" and checking the histories of converted rental properties and non-eviction buildings should include contacting and speaking with a couple of the existing residents other than the seller or those associated with the sponsor. Due diligence is often glazed over, or worse, 'building inspectors' who have little say or sway to common building areas are brought it who provide a false sense of security. An experienced transactional attorney is 10X's more valuable and effective.
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Unfortunately, they usually do overstep and misbehave. It's the power to tell your neighbors what they can, and can't, do. It's addicting. Best reason to avoid co-ops.
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Because this is NYC, there are a lot of folks who have never worked ever in their lives serving on the board for decades (they have trust funds, etc). The problem is that they too often lack real-world experience managing anything like a building or staff. Teamwork and mutual agreement is something too often alien to them. They will tell you they love the "work" they are doing on the board but they are the least qualified to sit on the board managing major investments held by other people. One condo I lived in a few of the non-working board members looked happily 'medicated' glossy-eyed and a bit out of it.
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The HOA is a perfect parallel to our governmental democracy in practice. Gossip, lawsuits, bizarre issues being debated with little positive outcome. HOA demands that children not use chalk on sidewalks is an a bagatelle issue, for one. We as a nation are knotted up in such trivia and first world issues, that we cannot solve anything due to the processes involved in democracy with lots of money and self-interest added. We need a new model of democracy if this is what we get, be it the HOA battle model or the Trump battle model.
I prefer the Scandinavian model of coop - the root is cooperative is it not?
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Lazuli--Hear, hear!!
I live in an original co-op, one that was built that way and not converted from rental. Converted co-ops often allow subletting that I regard as an evil. Rather than being a real co-op, these become rental buildings with a hundred absentee owners whose interest is passing on expenses to residents rather than themselves. In these situations, you can end up with a board of people who do not even live in the building.
There are many areas of possible corruption when it comes to real estate. Kickbacks to management companies and board members can be problem. A board member who has a business interest in a matter before the board should not be permitted to vote on it and ideally should not even be present in the room during deliberations. I believe that a list of unit owners must be provided upon request.
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David--We have an "HOA" that really does nothing for the residents, except pay the taxes and insurance, so most don't support it. We have some of the worst renters you can imagine, and absentee owners, and nothing to be done about it. Really keeps our home values down. Also, the neighborhood isn't as safe as it should be.
Kickbacks to managers can, and do, occur in condos, coops, and rentals. Employees at large rental management companies are glad to take some extra cash in exchange for handing out a contract for construction, or lawn maintenance, or anything really.
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I lived in condos for many years. It is possible to put a cap on the percentage/number of units that can be rented out. I would think that the same thing could be done in a co-op.
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That’s why my spouse and I sold. You have fewer rights than as a single-family house owner or rent-stabilized renter. And, the board isn’t the worst of it. The Managment companies fine and harass with impunity as they’re typically also running market rentals. If we had stayed I would have exercised legal recourse - it’s no way to live. And, in general, for all the positive aspects of high density development there are also a lot of problems - whether 100 year old Coop or brand new Condo.
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I believe that most coop boards act honorably and in the best interest of their building, but there are always bad actors.
1) indeed a broker/real estate agent who sells in the building shouldn't be on the board. While a building may benefit from a shareholder agent (as they likely know the building, etc. there's too much opportunity for conflict of interest if they are on the board.
2) Make sure that the building has an annual meeting, and that elections are monitored.
3) Shareholders should read the documents (bylaws, houserules and articles of incorporation)
In my years of cooperative living, I have learned that most people don't want to know how the sausage is made, some people assume the worst and behave badly, and others truly want to change their buildings for the better. Good luck to those shareholders whose boards are real nightmares, and thank you to the members of honest hardworking boards.
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@Minmin: Annual shareholders' meetings are MANDATED by law. Any co-op that isn't holding an annual shareholders' meeting is in violation of NY State laws governing corporations.
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I know! But some bad buildings shirk that and even good buildings can have trouble getting a quorum. But thank you. Some shareholders might not realize this.
On a different note, to one of the other commenters: indeed sponsor control too long after a building has been cooped is a problem, as is board participation by owners of unsold shares.
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@Minmin: If I were living in a co-op that was not holding annual shareholders' meetings, personally I'd be contacting the NY State Attorney General's office to report a corporation that was in violation of the law.
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