Proceed With Caution

Eviction issues typically fall into two categories: nonpayment of maintenance and objectionable behavior. The procedure for monetary issues is pretty straightforward as long as you have a recognition agreement, which gives the shareholder’s mortgage lender the right to see every nonpayment notice that you send to the shareholder and the right to cure what is owed to the co-op, which it often will do if the amount is small relative to what’s been borrowed. 

However, eviction attempts for behavior issues are almost always contentious, so boards that want to get rid of shareholders need to do so as transparently as possible. Whether someone continually has raucous parties or has made an apartment a de facto Airbnb, the first step is to document the violations and disturbances and then hold a  meeting where the shareholder can bring an attorney and their own witnesses and make their case. 

If there’s no resolution and you decide to proceed with eviction, most bylaws require a two-thirds vote of the shareholders before you can file in court. If all goes well and the co-op prevails, once a unit is vacant, the state Uniform Commercial Code permits a very expedited sales procedure. It’s really not much more than advertising that you’re going to hold the sale, which in most cases is done at auction. 

It’s very rare that eviction procedures move through the courts quickly. And unfortunately, once you start an eviction proceeding over behavior issues, you can expect that the revenue stream’s going to stop but the bad behavior probably won’t — and in many cases it actually escalates. So be forewarned.