The two questions fit together well because your management company and building manager/resident manager must work together to provide your cooperative the best service.

Building Manager/Resident Manager: Here are two paths to take in your search for a building manager/resident manager:
1. Hire a new building manager/resident manager as an employee of your cooperative
2. Outsource this role to a service provider

Where to look for new building managers/resident managers? Your current management company or future management company should have a bench of resident managers to present as options. Groups like NYARM and CAI can be a great resource for resident managers who have been actively taking classes to improve themselves, thus making a better employee. Also, there are several resident manager groups that are great resources.
Outsourcing the role of building manager has certain benefits and drawbacks. I can further discuss your needs to identify if this is an option for your cooperative.

If you are self-managed cooperative while utilizing a building manager to manage the daily operations of your cooperative, I would strongly recommend moving to a management company. Third party management provides advantages like technical resources, experience, processes, financial expertise, collections assistance, etc.

I would be happy to talk more details about your building manager search and introduce KW Property Management & Consulting as an option in your decision process.

This is a pertinent topic to our building as well. Our manager has left the company that represents us. The president of the company wants to assign an inexperienced new agent to us, one who he feels he can train in his own manner. I suppose inexperienced agents have to start somewhere, but I don't want that happening to us. We need an agent who knows how to deal with the superintendent, vendors, shareholders, and the directors too. What are your thoughts?

Dear Andy,

Thank you for being in touch. I have located your online website for KW Property Management and Consulting and I will run your response by our Board this week and see how they would like to proceed. It is an important decision.

We have worked with management companies in the past, some good and some bad experiences. Our present manager does not report to a management company.

Patty

I will recomend that you consider sublets fees, late fees, moving in or out fees, and a non-refundable application fee for new tenants. If, in case, there is some space available in the basement you can add amenities such as laundry or storage rooms. As you say, sales are down but the building can impose a flip tax for future sales. Good luck.

Also if you have the space build a basic gym, function/party room. You could also purchase tables, chairs, coat racks, which could be rented out for use if someone was having a function.

Hope this helps MRM

Andy,
Thanks for the input! This is great. I know we have a move-in fee, but I don't believe there is a move-out fee. We do charge for certain in-unit services done by maintenance staff. Now I need to see what other buildings charge on average.
Thank you,
Patty

Thanks RMR. We have a meeting room (for shareholder mts) that I know people use for private parties and you have to live in the building to use it. I will follow up and see if we charge a fee to use this room. We have storage bins, but they come with the unit if available and there has never been a fee attached.

In addition to generating income, it is important offset the wear and tear costs associated with subletting at your cooperative. Here are some suggestions (some have be stated in this thread):
- "Flip Tax"
- move-in/move-out fees
- sublet application fee
- sublet renewal fee
- charging for in-unit services performed by the maintenance staff
- location fees for filming

You should also review your expenses for opportunities to save money.

Andy,
Thanks for the input! This is great. I know we have a move-in fee, but I don't believe there is a move-out fee. We do charge for certain in-unit services done by maintenance staff. Now I need to see what other buildings charge on average.
Thank you,
Patty

Can you explain this Flip tax?

"Flip Tax" can be thought of as a fee associated with the transfer of shares in a cooperative. There are advantages and disadvantages to imposing this fee/tax. Typically the seller would cover the fee amount. Therefor a fee of X% (or flat fee or X% up to a max of $X) of the purchase price would increase the sales price without providing a monetary benefit to the seller. One would ask, does this make someone less likely to buy an apartment in your cooperative or does this increase in price your shareholder's apartments out of the market?

These Habitat articles should be a resource for you:
http://www.habitatmag.com/Publication-Content/Habitat-s-Purchasing-Primer-News-for-New-Buyers/Can-a-Condo-Charge-a-Flip-Tax#.UFnpx66k-So

Hi Patty - Helping your shareholders by allowing a large number of sublets comes with a price; you're hurting those shareholders who want to sell. One of the key factors most mortgage companies look at is the percentage of units that are in sublets. I've been asked this direct question on many mortgage qualifiying questionnaires. I've been told by multiple sources that if a building has more than 10% of its units in sublet, it counts against a mortgage application being approved for a unit sale in the building.

Dear Steve,
Trust me, we know full well how bad allowing rentals/sublets can be, but the economy has taken its toll on us. The overall community atmosphere of our building is not the same; we know that we are now at a level where just one company will still approve our mortgages as we have had to help SH who have lost their jobs and could not sell without ruining comp sales for the rest of the building. I appreciate your input!

We have several income streams beyond maintenance.
Sublet is a privilege, usually at board discretion, check your prop. lease, house rules, etc. for any comments, limitations. Too many will hurt sales and the ability to obtain mortgages. Not to mention lack of cooperation from basically 'rentals'. We limit sublets to 3 years out of 5, and charge 5%, 7.5% and 10% (of current maintenance, per month) sublet fees for year 1-3.
Bicycle and/or air conditioner storage for a flat fee per year, if you have the space. Allows people to keep their bikes in the basement, keeps hallways cleaner (dirty tires, etc.). A/C storage gets them out of the windows and improving heating in winter for a small fee.
Storage lockers - are they in common areas? If so, there should be a monthly fee for them, regardless of who paid for them. We charge $1.50 (cheap) per sq foot per month.
Shared coin/card operated laundry. Gets the machines and leaks out of the units into the basement, collect commissions from laundry co.
We get a deposit for move in/out, to cover potential damage. Charge application fees for sales and sublets, $500 flip tax.

Many co ops and condos charge a fee. It is just another way of generating income. Check to see if your by laws or house rules allow it. Our owners are charged a percentage of rent each month and all renters must join our country club. That generates a whole lot of income.

Dianne - not all sublet fees or 100% of a sublet fee are used to generate income. In my Co-op we charge a sublet fee as a fixed dollar amount per share. Part of that fee goes towards time and cost of doing a background check on the proposed tenant, interviewing the proposed tenant, additional bookkeeping, etc. Sublets are not without costs.

I think the ability to even charge a sublet fee varies between Co-ops and Condos. Share ownership in a Co-op must still abide by the proprietary lease and house rules since the Co-op corporation owns the physical building. Condo ownership is by individual title, and I don't know how much authority the Association can exercise over who occupies the physical dwelling. Interesting question.

First, a correction, co op ownership is not conveyed by title, but by share ownership and occupancy as a result of the proprietary lease.

No doubt there are some minor expenses in vetting a tenant, but in the end, the purpose is to raise additional income for the community. Generally sub tenants have to abide by the same rules as tenants (shareholders). The authority should be spelled out in the sublease agreement just as it is in the propietary lease. Of course, there could be additional resrictions on the sub tenant, but that is for the Co op board to determine. Most boards charge a dollar amount per share which is a fair way of determining the fee.

that's interesting to hear. My coop board doesn't charge and I see that someone else said it is common practice.
How much are they proposing to charge?
I wonder what other condos/coops charge?
The potential for income sounds great, depends how reasonable the fee is.

The board is proposing a fee equal to one month rent. From either the owner or the tenant plus an application to process the application and a credit check.

At the risk of sounding very flippant, you might consider yourself lucky. I know of boards where every member is an activist, or worse, has an over-inflated ego, and at best the boards don't get anything accomplished. At least in your situation you seem to have a collegial core that can keep your association running smoothly, albeit with a disproportionately distributed workload.

What about quorums? If you have a 13 member board, do you require at least 7 members be present before you can take any binding votes? Have you considered changing the decision to have every shareholder be a board member? It might take a change in the bylaws, but at least it will be a little closer to reality.

Good luck!

Your reply made me step back and think about whether what I was asking about was really the root of the problem I was trying to 'fix'.

If we as the officers are generally successful in getting quorums at meetings and then getting the board to consider and vote on business decisions we've researched - those are good things, I agree. For the most part, emergencies get taken care of and we've been able to make some preventive care decisions as well.

And as I mentioned earlier, many times when the officers ask for direct help, we get it. Those are the majority of board members.

Perhaps what we have, and what is most tiring, is just the usual 'personality' issues that any team must deal with and those would exist in the standard shareholder/board/officer model as it does in our board/officer model.

Thanks for the perception check.

You're welcome. :-)

I think in your situation (only 13 shareholders), the model you've adopted of having every shareholder be a board member is a good one. There is no need for a three-tier system (shareholder/board/officer) with such a small constituency. Everyone has the opportunity to vote on all issues, which brings governance much closer to all the shareholders in the community. In the words of the immortal what's-their-name, "if it ain't broke, don't fix it." It sounds like yours works very well indeed.

Unfortunately there is no agency to which shareholders can turn when problems arise. There is a bill in state senate and assembly to create an ombudsman agency to which we could turn, contact your electeds and try to get them to back it, we need this. Some issues might be heard in landlord/tenant court, others you might have to actually hire a lawyer and sue in supreme court. Try to get your City Councilman involved if you are in the boroughs, or any other elected.

There are more and more shareholders who are fed up with the total refusal of the AG office to prosecute the boards and managing company who are operating the co-ops as cash cows.
The AG refusal on all ground to prosecute/fine the boards for self dealing, fiduciary irresponsibility, refusal to perform due diligence, Refusal to follow BCL 624b, and many others items i missed are going to make the co-ops a flop. unless the ag office does their job. They approved the conversion plan, they approved the proprietary lease and by -laws.Noew i am hearing they are losing the amendments, and further not performing their job.Maybe it is time to sue them for fraud, or at the least lacer a diclimor on every page on the co-op mortgage paers, in karfe bold print."The AG office will do nothing to help uou if the laws govering co-ops are violated"

coop ombudsman bill in NY State .....S395/A694.......contact your Assemblyman or State Senator

My State Senator, Liz Kreiger, introduced the bill that would help co-op shareholders obtain some civil rights. S395/A694 would be a good start IF the upstate lawmakers (most of whom are Republicans), supported it instead of blocking or ignoring it as they have for the past year or 2.
It would help, I’m told if Democrats replace the Republicans in Albany this year.
One big problem: the real estate industry, moneyed and organized, is against S395/A694.

Can this publication do co-op shareholder activist outreach in support of the coop ombudsman bill?

The power to remedy this situation lies in the angst of your shareholders and not with the A/G. If, as you say, more and more shareholders are fed up, then it should be a slam-dunk to get enough shareholders to agree with calling a special meeting and throwing out the miscreants. Have you tried that? Have you even proposed it to the rest of your community?

The A/G's office is your last resort, not your first. You bylaws should spell out the procedures and requirements for calling a special meeting and for removing one or more of your board members.

If you follow the procedures contained in your operating documents and the board tries to obstruct or in some way subvert the process, then you will have something the A/G can use. Before you do anything, though, I strongly suggest you get all of the interested shareholders together and consult with an attorney who specializes in Co-op governance law. That way you can be sure you are on solid legal ground when you try to involve a legal entity like the attorney general.

reality is the AG will do nothing, including fraud and embezzlement by board members . Another board president wrote an article on here about how they were embezzled by a trusted Madoff like character. The AG got involved a little and dropped their involvement, probably was golf season. They had to just absorb the cost since the legal fees and the possibility of recouping anything was very poor, as the coop was not the only place he had embezzled.
His article is on here , AG plays golf while shareholders suck it up.
show me a case where the AG did their job, beside try to stop a foreclosure on the building due to embezzlement., the shareholders will still be stuck with all the monies owed.
When you have a board that does nothing about self dealing, since most are involved, illegally changed the by-laws, so you can't , as the by laws use one vote per share, call apartments that have been vacant for 25 plus years as owner occupied. and all the empty apartment as owner occupied, plus the ones that are occupied by illegal subleases per the prop pease par 14, no shareholder in residence, he call these owner occupied at the annual meeting. The NY times lawyer called it mortgage fraud. . Basically every thing that comes out of his mouth is fraudulent. None of the board members i see have a clue about the finances and who signs the checks. Nor do they think it is important. They changed banks, to a bank near where the president lives in long Island, probably has other business account in that bank also. The memo we received from the managing company said send your money to a PO box and an account number in long island, no bank name, no managing company name. No one else thought this was a bit unusual including the board members. The treasure says he lives in the building, but he never has since day one, over 15 years ago. pure fraud, and easy to prove, when it comes to that time. The rest of the board sits there like peanuts, not saying a word , but i videotaped the whole meeting, so i have proof of who was there and what subjects i brought up. The board refuses to provide their contact info , i have asked for this at multiple annual meetings. In a real coop, the shareholders would go into an uproar when the board refused, that happened when the building went coop , and we had real owners. Now they must check for lack of spine before letting them buy. The list goes on and on, i have the board president saying he will self deal on tape at an annual meeting, he knew i was recording the meeting, even asked if i had it on tape and repeated it again, to make sure i had it. He said it 4 or 5 times, " i will self deal " and he has been for over 15 years. I started audio taping since the secretary refused too, and every year the minutes were BS. When i wrote to counter the minutes, they played its 5 against 1= You lose. That is why they refused to tape. I started video taping, since i was verbally assaulted , he ridiculed the side effects of my disability, and close to physically attacked me. , because i dare ask questions about the finances. They made a $27k zero drop error on the insurance, , put down 3000, not 30,000. This is someone with over 25 years of doing this..Here it is august and still no annual financial report, due in march. Every share owner i see i ask, they say they haven't received it, but don't think it is important. . They all think that there is insurance to cover any embezzlement , including a past board member i saw yesterday.
I have other info that i can't diclose until i give it to the DA or hopefully find a lawyer that works in white plains,
So let me state again the AG will do nothing, violations of BCL 624a , refuse to give shareholder list, refuse to let me see the fiances as stated in paragraph 5 of the prop lease. All these nunbers are off the top of my head. If the shareholders are all sheep, i am supposed to lose my money? I have tried to get them to read this and the cooperator, including the board members, nope, they won't even read the prop lease, and go on the lies they are told, i question them and since the BOD has zero due diligence, i post a big copy of the paragraph in question with the sentence in question highlighted in the lobby. Sorry for the rant. but the AG does nothing

I understand your frustration, but I first need to ask you what does your attorney advises? You raise all sorts of legal declarations about what the board does and doesn't do. I am sure you understand that there needs to be some clear and compelling legal reason before any government agency will intervene, so what does your legal advisor (and not any NY Times lawyer) suggest *you* to do to hasten the process?

The NY times column lawyers used, the cooperator magazine hard copy attorney used, and the habitat mag hard copy used, are all pretty well vetted attorneys that specialize in co-op law, usually 2 or 3 firms may answer the question , since their is always different scenarios, and usually all the info is not present.
Case law from the NY law journal concerning the right to occupy, that was given to me here, , which i presented to the president at the annual meeting and they ignored it. Probably 50 years or more of sublease fee,s that were never collected and they have no plans to even look at it , meanwhile we are paying higher maintenance and accessments, i doubt they ever ran it by their attorney. The mortgage fraud, i had a good idea, that it was fraud , i wanted verification. i always verify my positions. I made copies of it and placed them around the building and the president put out some fraudulent list and tore up the ny times article in front of everyone. The first couple names on his list were never owner occupied, I have it on video, as i have on tape his stating that he will self deal 4 times, when i accused him of self dealing concerning one of a number of his self dealing. The Go Pro camera chest mount , works very well , nice wide angle to prove who was there. As in board members , that informed of fraud, self dealing and more, history will prove did nothing , took no action, no due diligence, No fiduciary duty to coop.

There should be zero reason for me to spend money on an attorney when the laws that NY State for coops as in BCL, are blatantly violated.
Self dealing is a serious offense, and for the AG to call it an in-house problem is total BS. Maybe it is due to the quality of workers they get nowadays, they don't have the work ethic that the older people had.
Years ago i contacted the Ag office for matters from gym closings after signing up people for lifetime memberships and received professional responses and they filed paperwork on my behalf and sent me copys.
I did the same when i had a problem with the cable company, same deal, they took care of it, since the cable company was violating the law, and they sent me the letter and the closure on the case, which i still had 20 years later. and when i tried to sign up for broadband, they said i had an unpaid bill of $400 . i produced the letter, and their BS game didn't work. Glad i kept that letter!
Another gym pulled an unlawful manuever and the AG handled it and i don't lose any money.
I had an attorney return money to me due to their incredible FU, known technically as prima facie evidence of malpractice. They preferred to do that then go before the bar. So i have pretty good history of being a consumer and knowing the consumer laws

But in response to your question, i have nor spent money on an attorney since the laws being violated are very cut and dry. I will be getting my paperwork together to retain an attorney, but it will be for much more than could have been corrected 4 years ago . They have ruined the building and my investment. Total lack of fiduciary responsibility to the building, plus all the self dealing , discriminatory conduct,has most likely made the real shareholders, the good people ,move.
However if any shareholder informs the AG that the BCL is being violated, like refusal to provide a shareholder list , and the shareholder puts in the necessary wording, which should be a template on the AG co-op site, not something that a year of readings and you figure out how to word it, especially after the managing company has used the "AFFIDAVIT" information to improperly solicit the shareholders by the Managing company's real estate department to use their agents to sell their co-op. That is a crock.
AG has performed their job for me many times in the past, As far as co-ops, they put up or shut up, AS in They won't do shizza for an honest share-owner, Maybe they get a job with someone like the Madhoff investigators did.

the first journey into the AG co-op site shows their booklet on how to handle problems, and gives information on what is allowed and not allowed by the board , plus informs shareholders of what they are entitled to as far as the BCL. No Martin Act here. Plus your proprietary lease may give you additional rights of review of corporate financial documents as mine does in paragraph 5.
However after reading the cooperator,habitat and the NY times attorney"s volunteering their knowledge. i do not believe the AG official memo/pamphlet is actually correct , At least from what i have read over the years on this question.

from the NYS Attorney general co-op Q&A section:

"Upon request, any shareholder who shall have been a shareholder of
record for at least six months preceding demand is entitled upon five
days written demand to examine a record of shareholders, and make
extracts therefrom. (BCL Section 624(b).

Nothing in the AG section mentions that you must declare that you are not now nor have been in the business of selling mailing list information for the prior 5 years, or that you are not going to sell the info to a mailing list company or anyone else when you obtain it. That you are only going to use if as a shareholder for coop business.
Nothing in there about having to file an affidavit concerning the non commercial use.,, i even wonder where that is from, since per bcl 609 concerning voting by proxy,, no affidavit or witness of signature is required for voting by proxy. I guess if i went in person, no affidavit would be necessary
Nor the very handy info, that if denied the info under 624b, that you request the written details of the denial l from the co-ops attorney which i would call the. "slam dunk" for filing and pursuing in the supreme court..
If the co-op attorneys are correct, the AG office is doing a large disservice to the shareholders with the quality of their information ,
.

Your frustration is felt by many shareholders. However the truth is that the A/G does not have authority once you pass out of sponsor control. When these problems arise the first steps must be, community board, city council member, state senator and assembly person. There are bills around that need to be acted upon, S395/A694. These are to create an ombudsman agency that would handle the type of problems outlined here. Your neighbors and others who suffer similarly need to band together and fight this politically. All owners have the right to protection under the law, but the vehicles to achieve this are not in place. Make appointments with your electeds, especially now, just before elections and put some pressure on them to get the help you need from government agencies. This has to be a well planned action. Try to hook up with other buildings that have the same type of problems and confront the electeds with unity. Have the problems in writing and succinct. Once presented, keep after them. Try this, it just could work. Good luck.

After purchasing a co-op I came to know a few major problems that could not have been known otherwise. What I began to learn from shareholders was "fear", fear of a rogue board run a muck. These people, hard working, rule abiding people are actually living in fear of this board. I was beside myself when I went on to listen more, talk about bid rigging etc. Is this illegal? Went on to experience my own situation when I contacted the board about major flooding and other serious issues. Thinking well, the issues would be discussed and resolved. Much to dismay, the board members came out on foot passing my unit, stalking me, harassing me and was warned by other shareholders that they dont do things by the book and to be careful. What? This is criminal isnt it? I sit here today with 15k in damages between legal fees and damages from major flooding that they were aware of and refused to rectify and that aint all. When I share my story, people are beside themselves thinking it is to much to be true. Oh yes it is. Dont dare ask to see any books or try to assemble a shareholders meeting because they will harass you and there is no one to enforce criminal acts. A free ticket to do what you want to people! I cannot fathom that this is real, still, and this is 2012. I contacted my Senator, Mr. Lavalle's office who was not interested was apparently annoyed by my call, the response was, "hire an attorney". The actions I saw were as low as the Vice President stealing food, buying catered food and offering a social and making people so uncomfortable to attend that they didnt go. The shareholder's watched out their windows as he piled up the catered food into his vehicle and they watched him carry it into his apartment. This is unbelievable, and no attorney general or district attorney to investigate. This is nothing short of a nightmare, people imprisoned by a group of people that have control with no recourse other than expensive legal fees that most people cannot afford. Laws are waaaaaay overdue! You think????

the AG official site states
"Upon request, any shareholder who shall have been a shareholder of
record for at least six months preceding demand is entitled upon five
days written demand to examine a record of shareholders, and make
extracts therefrom. (BCL Section 624(b)"

This is a different from what i have seen posted concerning this often asked question in the co-op magazines and sites.
I have seen that you must provide a statement that you have not been involved in the business of selling names for mailing list at the present time or in the previous 5 years
I have read on these sites that an affidavit of such is required. Nothing on the AG site details what the next step the shareholder should take if denied or if ignored.
The best sentence i have culled from these sites is to add
the statement
" if my request is denied, i request that the co-ops attorney provide me with a written detailed explanation of the reasons for the denial".
From there you file in the local supreme court to ask the court to enforce the law.
The affidavit i find confusing , since the only reference i have seen that comes close to this ,states that the same procedure as detailed for proxy voting in BCL 609 applies. However no affidavit nor witness is required for signature verification for voting by proxy.

If we can involve up-state NY co-op residents and they get their elected reps to work on solving their problems, we have a chance of getting the co-op ombudsman bill passed.
Here in NYC, our Senator Liz Kreiger, has been doing her best to get the bill passed. Her office told me that the up-state reps, most of whom happen to be Republican, are standing in the way.

I have owned a condominium in WNY for nearly three years and have grown increasingly concerned and alarmed at our board of managers/management team's complete lack of professionalism regarding maintenance, repairs, reserve planning and wasteful spending, as well as a general disregard for operating according to our by-laws and other laws of NY. I believe this an area where the ombudsman office could be helpful and beneficial to unit owners.
I have read that "upstate" is not in support of the law - does anyone know who those "upstaters" are and who I might contact?

I'm not understanding why you wouldn't go through your insurance company, especially since you say you have a 20 year relationship with your agent. If the claim is "BS" as you put it, your insurance agent should have no problem denying it and asserting such in writing, which would only give more weight to your harassment claim against the super.

I am calling my agent today and informing him of the allegations. But I will not allow them to get away with making a fraudulent claim and I am sure that my agent is on my side. This co-op is run very inefficiently and ineffectively. This is the same managing agent who told me it was OK to hire the super to gut and renovate my bathroom as he has done for many others on co-op time. When I asked him who was responsible should something go wrong he said that I would be the responsible party. I was shocked to hear this because if they are allowing him to do this you would think that they would be confident enough to back up his work. I was leery because one of his renovations caused me to be without water for 3 days, in fact the renovation took place in the apartment that was recently flooded. The managing agent also told me that if something went wrong I could go through my insurance. This did not sound right and it is in fact not, why would my insurance cover damage caused by an unlicensed contractor? When I called the village they informed me that it not OK for the super to do any plumbing because he is not licensed in the village (or anywhere else for that matter). They also told me that he could do some electric work, but nothing major. This is the exact opposite of what one board member told me. In fact this board member told me that the super could do any and all plumbing, but no electrical work. I hired a licensed and insured contractor and paid the going rate for labor which was more then double what I would have been charged by the super. The bathroom came out great the contractor treated me with respect and I did not have any complications. But I do resent subsidizing renovations in other apartments that employ him because he does the work on co-op time.

In the contracts that we have with our clients (Coop or Condo), we have a clause that states that should we wish to change the management representative, the client has the authority to approve or veto the contract, and if we do not request the client's approval, that is considered a breach of contract.

I would see if you have any language in your management contract that would be similar.

Hope this information helps.

I'm not sure what is in our contract

My issue is that I feel the board should have some input as to who is hired

Why hire someone that may not meet our needs

Hi,

For my co-op, the issue is about giving the shareholders flexibility while keeping an eye on owner-occupancy. Any sublet decreases owner occupancy and we charge for all. We had a 2 year policy and extended it for a temporary 3rd year when the market tanked. We throttled back to 2 years this year when we learned about the stringent owner occupancy requirements on shareholder mortgages approval that Fannie and Freddy were imposing. We may have to throttle back even one year. My suggestion is to enforce the fee as a deterrent and to explain why (Fannie/Freddy and owner occupancy).

Good luck!

The BOD in our building accepts any and every explanation that a shareholder gives, so we have many illegal sublets. How do you suggest that we require that the BOD enforce our sublet policy, which states that a shareholder can sublet for two years with 10% of the maintenance paid to the corp. as a sublet fee,

The BOD likes to call the illegal sublets, roommates, even though the shareholder is absent. This is a fair and easy way to raise funds, but the BOD would rather raise the maintenance and cost of amenities while allowing illegal subletting. The president of the Board insists that we cannot prove that the shareholder illegally sublets their apartment
.

This sounds so familiar, the same is happening in my building. The president of our BOD who always claims fiduciary responsibility and liability, has a signed contract on her apartment and is selling, yet makes decisions on finances and does nothing about illegal sublets. We have illegal sublets for years without any fee. Certain members consistently say it cannot be proved. Yet the shareholder is not living in said apartment. They seem to circumvent our offering plan and by-laws to their advantage. I've spoken to attorney's and was told that the burden of proof is on the shareholder, but certain members of our board insists that the burden is with the co-op. Can anyone shed light on this?

These are short-term sublets in the same apt - over and over - to current shareholders who are renovating . Not sublets to outsiders. They - nor the owner of the apt - pay the usual fee to the coop - is this a bad idea?

Tammy, yes, it's a bad idea without a fee. Even though they are are shareholders, they are not shareholders of the unit in which they are currently living. They are sublets and should be paying the sublet fee.

i had read that to qualify for a roommate status in a coop, the shareholder must be living in the apartment with the roommate.
Similar to the "and" "or" wording in paragraph 14 of the proprietary lease concerning right to occupy.
I have been battling the same issue in this co-op, many of the coops have been occupied by the adult sons or daughters of the new shareholders, plus the prospective shareholder who attended the interview , stated that they were going to occupy the apartment and never mentioned the child, and the apartments were studio or 1 bedrooms.
I had asked this question in the NY times, disguising non-owner occupied apartments as owner occupied for better sale prices, meeting mortgage requirements for banks. The answer was, it is mortgage fraud and to contact your local mortgage fraud unit, in my case the DA

Efy, thanks for the mortgage fraud information. I think my building must go that route as we are out of options and do not have the support of the board. They cover it up.