This is playing out across the city, smaller co-ops with large underlying mortgages. In each situation the mortgage may be granted due to a particular circumstance, such as need to for capital improvements, large footprint etc.
What are the details of the mortgage – 30, 40, 50 or interest only amortization schedule? What is the rate? What were the funds used for?
What I have found in 15 years of involvement with various co-ops is there is impression that maintenance can always be raised so the mortgage should not be an issue. The sponsor mindset and many but not all shareholders are defer as much as possible – keep the maintenance payments small, pay the mortgage down just enough to roll into the next refinance. Eventually the co-op will be in precarious situation of a large underlying mortgage with a higher rate and payment amount.
Evaluate your next moves. Is refinance period coming up, has maintenance been raised enough to cover the mortgage and are you contributing routinely to the reserve fund?
I applaud the co-ops that have taken steps to pay down mortgages and maintain finances in a conservative manner.
For those with a large sponsor presence – such as my building – we have an uphill battle to the responsible thing for all shareholders even if it costs a little bit more.

By the way –we are having this very debate right now, as our mortgage is due in December, 30 vs 40 is all the rage.

One reason I can see that the sponsor wants to take an additional $350K of equity out of the building is to increase the capital reserve fund. If Billy Joe heard somewhere that the sponsor was doing this to make the units more attractive to buyers, having a healthy reserve fund is an important factor. Co-op mortgage lenders look closely at building finances before committing. An anemic capital reserve fund makes it much more difficult for a perspective buyer to get a mortgage.

The 90 day rule does exist. Also, if there are cats in the building then it is not a No-Pet building. It's unfair to allow cats and say No-Pets. This can be fought but if the pet is there over 90 days it becomes quite difficult. I myself am a Pet Lover and feel they do add to ones life. Good luck with this issue.

It IS NOT only the 90 day rule that you MUST adhere to. Before TRYING to institute any action against a pet owner make certain that the dogs ARE PETS. UNDER FEDERAL LAW ALL SERVICE DOGS and SOME EMOTIONAL SUPPORT ANIMALS ARE NOT PETS. They are NECESSARY for the persons livelihood. I faced this issue when I lived in NJ and moreso living in NY. I have a small dog that IS TRAINED as a DIABETIC ALERT SERVICE DOG. I presently live in a condo with my mother & in November I was sent a letter by the building manager stating that ALL DOG OWNERS would have to pay $100 A YEAR to keep their dogs & also provide DOCUMENTATION. Again according to the Americans with Disabilities Act THE BUILDING CANNOT CHARGE ME TO KEEP MY SERVICE DOG HERE. I also DO NOT have to provide documentation. FYI: There is NO SUCH THING as CERTIFICATION for Service Dogs in NY or NJ & many other states. Under the ADA Service Dogs DO NOT even have to wear vests or anything identifying them. If there is a question regarding whether or not a dog is a Service Dog BY LAW you can only ask 2 questions:

1) Is the dog necessary to assist you with a medical or psychiatric condition?

2) What duties is the dog trained to perform?

In response to the second question in the case of someone that has a Diabetic Alert Service dog an answer of "the dog alerts me to a medical conditon" is a sufficent answer. A Service Dog handler is protected from revealing ANYTHING that would reveal the exact nature of their medical or psychiatric problem.

Before taking ANY ACTION against ANYONE it would behoove you to go to Google (or use another search engine) AMERICANS WITH DISABILITIES ACT SERVICE DOGS. You will find a wealth of information & learn what you can & cannot do. This VALUABLE INFORMATION can protect you from possibly being sued later.

Peg Meerkatz
Disability Advocate, President
EsperanzaEnterprises

I agree with Peg Meerkatz. Also please note, that if this is a Senior, many have pets not only for Emotional Support, but Companion Support, courts generally rule with that in mind. Kudos to you Peg for bringing this up. Pets do become a family member. One of your concerns were dogs having accidents, understandable, you wouldn't give a human up because they were old and frail. There should be a little more compassion, these pets are as important as a child to many people.

If one is feeling no compassion, and one is in a no-pets building, perhaps one should move somewhere else. Insisting on having a companion animal -- i.e. a pet -- in a no-pet building is unconscionably selfish. It completely discounts the reasons why people want to live in a no-pet (or no-dog) building, and says to them, "My reason is better than yours." You have a psychological condition you think requires a companion dog? Others have a psychological or health conditions that precludes being around dogs that could jump up or snap at them, create allergy and dander issues, create disgusting smells, etc. Your psychological condition doesn't trump anyone else's. No one's disputing seeing-eye dogs. But now everyone who wants a pet is abusing a legal loophole and saying, "Oh, I want a dog, I'll claim I'm depressed and just have my doctor write a note saying whatever I tell him to." Thanks a lot.

What Exactly does the policy state? Many times verbal policies are passed down like the telephone game . They often are not what the written policy states. Our policy is in the house rules. It is nothing like the verbal policy that people and board members,management company state.
Most people in my building do not know how to read. Written policy rules.

This is the most ignorant thing I have ever heard...ever.

No, YOURS is the most ignorant comment. Habitat did a whole article on this very subject, of selfish scammers who use fake "certifications" and otherwise corrupt the system so they can have pets in no-pet buildings.

The Americans with Disabilities Act does not apply to private residences. It applies to public and semipublic (hotels, restaurants) spaces. The Fair Housing Law applies. But not ADA.

Thank you everyone for the great info. So NJ does indeed have the 90 day rule. Can anyone give me the specific law # so that I can reference it. I have not had luck finding it online, but will continue my search. I see the NY law was clearly mentioned in a few other postings.

Yes, there is at least one therapy/medically advised pet for a woman with cancer and I've advise the board she should just provide us with a letter from her doctor that he recommended her getting a pet.

Thank you, we will look into the emotional support animals as well as some of the very elderly in my building may have them for that reason. The other pets are mostly cats and the kitty litter down the trash shoot is really a problem.

We are not trying to prevent service dogs.

We still plan on maintaining our "pet free" status.

All the comments and advise in response to your concerns are spot on, but that does not allow ESA and service animals to become nuisances or destroy other neighbors peaceful and quiet enjoyment of their homes. If any of these animals bark incessantly, have accidents that are left in the public spaces, pose a threat to residents and guests, or cause an apartment to smell so bad it the odors migrate into the public spaces or adjacent apartments, Boards have the right to pursue remedies for removal of animals because they are breaking other house rules on issues of quality of life and, in some cases, health department issues. Train your service dogs and ESAs so they are not disturbing your neighbors!

people would need to know if it is coop or condo.
If co-op, subleasing IMO is against the very reason people buy co-ops. Short term to get a buyer is one thing .
condo's is a whole different situation

In agreement with efy. Subleasing is against the very reason people buy co-ops. Why not rent? Co-op living should be exclusive not to rent / sublease.

Sorry...this is a condo...thx.

The board really should not legislate a unit-owner's participation in the co-op's or condo's governance. There might be very good reasons why a unitowner cannot return for the annual meeting, military committment being one. If you start carving out exceptions, you'll wind up with something that resembles the federal tax code. :-)

What the board should mandate is that all unitowners who know they will be away from their units for longer than a specified time (2 weeks, month, etc) pay some nominal fee to have the super or whoever maintains the common structures enter the apartment and perform a general safety review. Simple things like making sure the electricity and gas are turned off or aren't leaking, no water problems with leaks or overflows, no signs of damage like from an upstairs leak, things like that. The board's first concern should be the safety and security of the building. If a unit owner is not going to be present for an extended period of time, I don't think a nominal fee to have a surrogate like the super perform simple safety and security checks is inappropriate

even coop owners have protection against someone entering their apartment unless it is an emergency. Opening the building up to charges of theft, etc.
It has to be an bonafide emergency to enter the apartment , like a leak downstairs and the apartment above the empty apartment has no leak. i am sure once a leak above was repaired , and it was obvious that the middle apartment must have water damage , after trying to contact the owner to let them know what was going on, the building could enter for mold mitigation measures and structural checks.

I suggested a fee to (1) force the apartment owner and the board to come to an agreement on entry conditions, and (2) to reimburse the board for the time the super (or whoever) has to spend performing an out-of-band chore for this one particular shareholer.

we need a new set of laws or co-op state board to ensure that shareholders are treated properly and within the boundaries of the law.
The AG is useless and anyone that runs into the uselessness of the AG office on co-ops should write letters to their state senators and the AG himself.
Put everything in writing, fax and get the receipt, better certified mail, but that is such a pain in in the butt for me. to the co-op board, in my case they refuse to give me the co-op BOD contact info, and some say they live in the building, yet have not in 7 years,, and one has never occupied the apartment his son lives in, yet he states he lives here. Fraud and i am reporting it along with mortgage fraud to the DA.
I also hate the amount of time i have to spend researching everything and typing up letters, yet the other shareholders prefer to believe the fraudulent details given to them by the board,since they want to sell and move. I don't blame them, but that just keeps the problems happening, until a buyer with a set , realized they have been scammed and has the spine to take action and sue.

1) Ask some longtime residents what has been traditionally repaired by the coop.

2) Make a list: Usually: washers for drips in sinks, showers and toilets, changing plugs and light-switches, plaster and prime coat paint when there has been an in-the-wall leak, window problems, radiator leaks, snaking drains, etc.

3) If staff does any work beyond the traditional repairs it could be that, legally, the staff member is a independent contracctor without workmans comp and the coop could be laible. Be careful. Put your policy in writing.

4) Find a good licenced handyman (outside the bldg) or two that the building can recommend for minor work by residents and give out his/her name and number.

i wouldn't want the super moving furniture, even if it was billable,unless small items, with everything cleared off. To much risk of injury , and if furniture is expensive , claims to co-op. I worked for a public utility and we had to do installs inside the house, we were told never to move furniture, that is the customers responsibility. even changing bulbs, is more of a favor, but not a requirement to a resident. Tough to draw a line, since when in the apartment to work on a covered item, before they leave they could change a light bulb. Since tips are given to the super at the holidays, the light bulb changing fee is kinda included in them. The co-op i live in also tips the super and to my total opposition, the managing agent. Who doesn't even do the basic work required of him. We had fire dept fines for fire door rusted shut and unable to be opened, yet they tip and give raises, it's the prez in cahoots with the managing company with a puppet board.

If you really think about it - it is just a bad idea to allow staff to do side jobs. You open the coop to hundreds of dollars being used in building supplies (plaster, etc) to say nothing of liability issues and conflicts of interest regarding priorities towards regular building maintenance. Many buildings are told otherwise - usually by the managing agents or the board members hwo gett treated favoribly by staff. Beware.

As far as what people say has been the historical supers duties in the building, People pass down what they want you to believe or what someone told them , but not what the house rules state. Our house rules state that the super is not allowed to do any personal work or errands for the residents.

your second scenerio is correct, the number of shares owned multiplied by amount of increase.

In a strict tecnical sense, shareholder financial oblications like maintenance and assessments are calculated on a "per-share" basis. If your board has approved a 15% maintenance increase, it means that the amount of maintenance every shareholder in your building pays is being increased by 15% for each share they own. Assessments are usually calculated by "X number of dollars per share"

The cost effectiveness of converting from #2 to gas involves several factors including the cost to upgrade your systems internally and Con Ed's cost estimate to bring in the gas line to your building. Natural gas has been running at about half the price of oil for some time now. The price per therm for gas will vary with market conditions and you chosen supplier, which does not have to be ( and shouldn't be) Con Ed. My firm, Informa Energy, could do a simple pricing analysis for you based upon current rates. Depending on how quickly Con Ed can bring in the gas line, though, it may make economic sense to wait to convert. The natural gas market hit a ten-year low in April 2012 and has climbed steadily from that low ever since. The mild winter of 2012 and enhanced extraction techniques ("fracking") created a huge surplus of gas that drove the price down to those lows. While gas prices are still quite low generally speaking, the surplus is not predicted to remain at current levels due to factors such as: large users switching over from coal to gas & the unexpectedly hot summer increased demand for gas (which is used in generating electricity). Thus, many of our gas customers have opted to lock-in gas for multi-year terms to avoid the likely rise. However, be way of any firm wanting to help to you finance a conversion in exchange for locking-in for five years -- you could lose your conversion savings in the process.

The cost effectiveness of converting from #2 to gas involves several factors including the cost to upgrade your systems internally and Con Ed's cost estimate to bring in the gas line to your building. Natural gas has been running at about half the price of oil for some time now. The price per therm for gas will vary with market conditions and you chosen supplier, which does not have to be ( and shouldn't be) Con Ed. My firm, Informa Energy, could do a simple pricing analysis for you based upon current rates. Depending on how quickly Con Ed can bring in the gas line, though, it may make economic sense to wait to convert. The natural gas market hit a ten-year low in April 2012 and has climbed steadily from that low ever since. The mild winter of 2012 and enhanced extraction techniques ("fracking") created a huge surplus of gas that drove the price down to those lows. While gas prices are still quite low generally speaking, the surplus is not predicted to remain at current levels due to factors such as: large users switching over from coal to gas & the unexpectedly hot summer increased demand for gas (which is used in generating electricity). Thus, many of our gas customers have opted to lock-in gas for multi-year terms to avoid the likely rise. However, be way of any firm wanting to help to you finance a conversion in exchange for locking-in for five years -- you could lose your conversion savings in the process.

The cost effectiveness of conversion depends on several factors, including the cost to upgrade building systems internally and the external cost Con Ed may charge to bring in the gas line to your location. Upon receiving your info, my firm, Informa Energy, could easily do the price comparison based upon current rates. natural gas has been running at about half the price of oil for some time now, so there are definitely savings to be has in that respect.
The natural gas market hit a ten-year low in April 2012, but has been recovering ever since due to switchovers by large users from coal to gas as well as the unexpectedly hot summer creating increased demand for gas (which is used in generating electricity). However, the prices are still quite favorable and many of our customers have been opting to lock-in for multi-year terms to avoid rising rates. However, be wary of any firm offering to finance your conversion in exchange for locking-in for five years or more, as the markets simply aren't predictable over such a long period. You could lose the savings you'd otherwise enjoy. If Con Ed can't bring gas in anytime soon and you can't afford the conversion costs, it may make sense to burn 2 oil and wait.

Michael, this is a lovely email, but it's 128 units and if the person has an accepted offer and contracts are out on the apartment, which is most probably a ploy, why would she vote to put all shareholders in extreme debt. Why would this board member vote for such a huge debt and then leave? What does that tell anyone?

It would have been a good idea to have a series of meetings over a few month period before deciding on a line of credit for a financially strapped corporation. Was there enough representation at the meetings? Were all issues addressed? Did the shareholder's have adequate information and an adequate timeframe in which to answer? A sale can be turned down for no reason at all so where is the violation of any fiduciary duty?

You mention that the majority of the board believes that the corporation is open up to liability issues. Was this said at a board meeting or a shareholder meeting? If it was a board meeting, then how and why would anyone know? Bantering at board meetings are commonplace. If the majority of the board leak this, it is they who are in violation. Board members should be allowed to express opinions without fear of others leaking this to shareholders.

You state that two past members held their seats, did these past members also inflict a huge debt on shareholders and then decide to leave? That's a question.

Morally, one who creates a huge debt especially on affordable housing, which seems to be most of the building, that's generally the case on mixed housing, (they generally have restricted income floors), should morally not create such debt or recuse oneself if one will not be there to assume such debt. On the affordability, during economic times this should be carefully looked into. If votes were taken were they the ones on the floors with the most shares? That would be unfair. That will always counteract the votes on the restricted floors with less shares.

To M.C.

How much is the LOC? We can better answer if we had this information.

I am not a lawyer, but from the nature of the issues and questions being raised, it sounds to me as if you need to speak with an attorney about all of this, to know where you stand and what your options are. One obstinate board member cannot block a sale (unless your bylaws require a unanimous vote), and Co-op boards are protected to an extent by the business judgment rule.

Though I'm not a lawyer, it's a fundamental principle of co-ops that shareholders have to be treated equally. A board absolutely cannot condition its approval of a sale on how a shareholder voted on a particular issue. I can't imagine such a decision would pass muster under the Business Judgment Rule, since it's a classic example of a bad-faith decision.

And what's this weirdness about sticking around to pay the debt? A shareholder has no such obligation, moral or otherwise. If the debt is large, then the value of the apartment will be reduced. The shareholder doesn't get off scot-free and the debt doesn't disappear. It's effectively figured into the sales price.

For future reference, please keep in mind that you were under no obligation to put this to a shareholder vote. The board has the power to arrange financing, so long as they don't breach their fiduciary duty. Transparency is great in general -- and you should certainly be 100% up-front with your shareholders -- but I'm wondering if this would have been less divisive if the board had presented the line of credit as a fait accompli.

Bottom line: consult your attorney right away.

A sale can be turned down for cause or no cause. Is this a line of credit or another mortgage. What type of building is it? Some say there are restricted income floors, does this building have anything to do with the City? Was it built under a program of sorts? If so, there is more to it than meets the eye. Was there funding involved, credits and such? It might not be a straight forward co-op. I don't know about the value of an apartment being reduced? There are many issues to this large debt.

The anonymous poster wrote, "A sale can be turned down for cause or no cause." You have to be EXTREMELY careful with that statement. There are reasons for which a sale can NOT be turned down. Not only would it be illegal to reject a sale for these reasons, but the board members could be held personally liable and subject to damages. On top of that, New York law prohibits the co-op's Directors and Officers insurance from covering punitive damages in these cases.

The best-known example, of course, is discrimination based on any of the 14 protected classes, including race, age, and whether or not a person has children. Refer to the well-known case of Broome v. Biondi, in which board president Biondi was hit with six-figure punitive damages and had to sell his apartment to pay for them.

Most cases along these lines involve claims of illegal discrimination against the prospective purchaser. But a shareholder has additional grounds for a lawsuit based on NY Business Corporation Law (BCL) -- especially Sec. 501(c), which requires that "each share shall be equal to every other share of the same class." So if you treat shares that were voted in favor of the line of credit as unsellable, you're in egregious violation of this law.

It's not going to help you to claim that the purchase application was rejected for no reason, or a made-up reason that doesn't hold water. If the court finds that your real reason was a different and illegal one, then the board has acted in bad faith and is not protected by the Business Judgment Rule. Just ask Mr. Biondi.

To reiterate: CONSULT YOUR ATTORNEY. You're going down a very dangerous path.