One way to test conflict of interest is as follows: If there is any seed of doubt, then it is said to be a conflict of interest that requires disclosure.

In this case and to avoid any seed of doubt, the board member in question should abstain from being an offficer of the corporation, i.e., abstain from being president, treasurer (the most dangerous of the positons since management controls the checking book) and secretary (second most dangerous position as the custodian of the corporate records). Finally, the shareholder should abstain from any discussion relating to the performance of the management company and the person should be protected by the management company by not being named manager of the property in which the person holds shares.

The other shareholders and board members must recognize that the shareholder in question has a large financial interest in the builidng and just like the other shareholders expect the builidng to remain financial stable and well-managed.


Many read great problems relating to this situation; however, it is well known that the CEO of major American corporations, in addition to being the top manager of the company and an employee of the corporation, sits on the Board of Directors and holds a substantial shareholder interest by virtue of holding shares of the corporation by way of compensation or even individual purchase.

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First of all you should have your past water bill analysed for overbilling ASAP.

You can try either of these companies. They do NOT charge up-front but, rather, take a percentage of what they save you. You can google them for the phone numbers.

Okeefe and Associates: they charge 15%of what they save.

Ashokan: charges 1/3 or about 33%.

Thanks a lot for the info.

Could you give me some contact info for O'Keefe & Associates? Googling turned up no such firm/individual.

Hi Newbie - I cant find it either. but the other company comes well recommended.

Habitat has done at least two article about this. I found them by typing "noise law" in the Search box on the front page.

The first one explains "Local Law 113 of 2005," which went into effect last year. That should provide you with the ammunition you need. It's at http://www.habitatmag.com/publication_content/2007_october/web_exclusive_adaptations/noise_complaints_and_the_new_2007_law

There's also a newer article at
http://www.habitatmag.com/publication_content/habitat_s_purchasing_primer_news_for_new_buyers/noise_complaints_when_is_loud_allowed

Since terraces and patios are part of the structure and property of the co-op and residents are only given the right to occupy them privately, I would say that the co-op would be able to provide guidance on their use and maintenance. (Don't co-ops restrict decorations, planters, floor covers, etc. on terraces and patios?) Consequently, regulating human activity in these areas, knowing that such structures and patios may be adjacent to the windows of other apartments, can be subjected to house rules. Some may argue that noise coming from the street, i.e., sirens from ambulances, fire trucks or noise from pedestrians cannot be regulated. This activity is somehow regulated by laws and ordinances to make the life of city dwellers a better place to live.

In cases where there is no prescribed house rules prescribing the reduction of noise after a certain time of the night, boards can always appeal for consideration to neighbor. Finally, as neighbors, we may speak with the offending neighbor by being tactful. For example, my neighbor would go to the terrace to speak on the cell phone at 11:00 pm and the voice carried over my bedroom. The neighbor's terrace is just adjacent to the bedroom. When I saw the neighbor a day or so later in the hall, I only commected to the person that I was also part of the conversation and the confidences the previous night night. I reminded the person that I was resting in my bedroom and the conversation was totally audible. I reminded the person that for total privacy, the apartment should be used. The person laughed and never used the cell on the terrace.

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We had a natural gas contract that at one time we thought we would extend via a blend and extend amendment to our agreement. We elected to “ride it out” rather than force ourselves into a convoluted contract. As fiduciaries, we did not want to start playing in the volatile futures market with the vagaries of the speculators who tend to drive prices. Our natural gas contract has expired and we are happy where we are.

Blend and extend is not a simple calculation. One does not take the average of the old rate and the new rate and then simply construct a “blended” rate as a number of factors must be taken into account. The remaining term, volume/quantity commitment are factored into the the extension term. Then, there is the cot of money as the fuel oil supplier has made a commitment to purchase at a certain rate. This commitment is now to be spread over the remaining months.

Sure, it is easy to look a cost $x for ten months and cost $y for twenty-two months, but is that where you want to be?

Sorry no other advice available.

It's hard for a long-time board president to feel at ease about retiring, especially one who did most of the work. Many board members are capable, offer ideas, etc., but they are content to let the president coordinate and do everything. Designate more work or ask them to volunteer for a task - overseeing a project, writing a memo to residents, etc. Make use of their skills and talents. Let them know you won't be on the board much longer and give the dedicated ones a chance to step up to the plate.

Some presidents don't want to disclose that they'll be retiring. This often happens if there's a fear of SHs with personal agendas taking over or where no one seems interested in being on the board. Another way to start making a transition is to talk to SHs you think would be good board members. Encourage them to run. Tell SHs who are CPAs or other professionals how valuable their service on the board could be for the coop.

Also look for prospects who are "people" persons, no matter what work they do. It's good to have board members who can deal well with SHs. Some people are good with numbers, coming up with new ideas or formulating strategies for the future but they may not be good communicators. The board as a whole should communicate, keep SHs informed, etc, and having one or more board members who can do this on a one-to-one basis with SHs in an open, receptive manner is always a plus.

I've retired from several boards after a long term of service. I've sought out good replacements before I retired. Sometimes they're not easy to find but it's worth the effort. None of us want to put a lot of ourselves into something and worry about how it will be handled in future especially if we still have a big investment in it.

To Cathy who asked about retiring from her board: no one is indispensable and your coop will go on without you. But it can be hard to let go. One last suggestion. Before you retire, try to ensure some "continuity" for your board. In time people learn, but it's a big mistake to turn over governance to a team consisting only of SHs who don't really understand what a coop is yet, have been in a building for only a very short time and/or have no one with experience to help them learn and move in the right directions.

Bravo, BP! Great answer.

In fact, what you describe is eerily close to how I became president of our co-op. The former president recruited me onto the board, where I spent two years learning a lot and taking on a couple of projects that interested me. At the beginning of the third year, right after the Annual Meeting, the former president announced he was stepping down and asked me to replace him. He had told NO ONE of his decision in advance, so we were all somewhat startled.

The former president remained on the board for a final year to ease the transition, which was very helpful. I would suggest that the original poster do the same.

Now there's some good advice. One of the most interesting things BP says is something that leadership and management books all say to do but almost no one does, which is to get a variety of types of people on a team. Too often, boards (and corporate offices) work on how buddy-buddy people are. Obviously, you don't want a misanthropist in the mix, but having board-members who aren't like you helps to generate new and different ideas. Like BP says, you want a people person, a numbers person, a details person, a big-picture person, etc. You can't have all one kind.

I don't see any law that states that multiresidential buildings must upgrade their outside aerial antennas to HD.

The issue is one of PR by the Board, i.e., to satisfy the minority who does not have cable or other form of paid TV compatible with HD. For your info, there are indoor HD antennas that may be purchased and could be effective.

Finally, if the board is not agreable to upgrade the antenna, then I would suggest that the users of the central antenna pool their resources and upgrade the master antenna of the building. After all, those who currently pay for cable, FIOS or other private network are probably least interested in changing back to the master antenna. In fact, this may be more equitable, since this small minority are the only ones who will use the system. This will not tax the rest of the residents not interested in being connected to a handful of channels.


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http://www.nytimes.com/2008/05/11/nyregion/thecity/11disp.html


http://tv.about.com/od/accesspries/tp/topHDantenna.htm

HG - Read the article "Smoke Gets in Your Eyes" on p. 26 of Habitat's November 2008 issue or on their website. A few years ago a coop tried to ban SHs from smoking in apts. It caused problems, but things are changing.

This article says that some coops are making a transition to a "non-smoking building" by prohibiting smoking by sublet tenants and/or new SHs, but grandfathering existing SHs. It sounds like a good way to get this started.

My coop has 8 apts per floor. Our floors are small, and people in 5 of the 8 apts on my floor smoke. Some people also smoke cigs and "other substances" in the stairwell. I have 2 air purifiers but the odor is still awful and permeates my furniture, clothing, etc. I dread winter because sometimes I have to turn off the heat and open windows to get the stench of smoke out. We have smokers on other floors so it's a building problem.

HG, read the Habitat article and talk to your coop attorney. There are some things you can do.

Thank you for your info, I will read the Nov HabMaz ... However,is there anyone who has actually taken action.. tried to change the bylaws, gone the legal rt?

We in our CoOp are not in favor of too many restrictions, but we have a number of elderly and others with helth problems, this could be a health issue.
HG

HG - The Habitat article mentions buildings that have, or plan to, amend their by-laws regarding smoking.

our building has had problem shareholders with smoke and other "substances" permeating common areas and units for years. There have also been problems with smoke coming from our co-op
s private balconies and yards. What's frustrating is it's been easier to get landlords and tenants next door to us to curtail the smoking when it migrates to our buiding, and our own shareholders take a miliant stance and abuse their fellow shareholders. The smokers of whatever were problem shareholders/ difficult personalities in other ways such as arrears, lifestyle and hygiene issues.(I am not saying all smokers are difficult, but ours have been!). By not nipping the "other substances" issue in the bud by calling the police--it is illegal in NY- Rockafeller Laws substantiate calling plice--we shot ourselves in the foot. However, the cigarette smoke problem is now being addressed by our attorney in the scope of a larger complaint and we've been told that secondhand smoke is no longer an ambigious area. Read the Poyce case at 22 west 15th street. A Board and owner were deemed at fault for not making good faith efforts to curb smoke from entering another unit subleased by a couple from the owner. Apparently, this has set a precedent and smoke is being considered to be dangerous to health in the same way chemical and other noxious odors are. It is not just atributed to "this is NYC and noise and smoke are part of living here."

I'm a assistant resident manager in a high end luxury building for a major developer in the city. When we have a problem like this, 1st line of defense is to make sure you seal up all the electrical outlets, caulk the base boards/molding make sure the windows are sealed properly. Also the smoker has to ventilate his/her apt properly. What you need to do is look at the lease/ house rules to verify that this is in writing. If this is not in the house rules make an amendment to the house rules with a stipulation, which will mean a violation, then the board/owner will decide what the outcome will be. Remember, your all neighbors in a community, try diplomacy first, see the the resident will cooperate to cease or move the smoking to one room instead of the entire apt.

When I hear people talk about cigarette smoke penetrating their apartment from another, I always think of odor = smoke. My question is a simple one: What kind of cigarette, tobacco or other form of pipe provides smoke that infiltrates long after the person has stopped smoking? Do people see real smoke, that blue puff that comes out of someone's mouth or is it the odor that remains in the air, clothing, hair, etc that disturb people?

Unfortunately, I tremble when I hear smoke, because it takes a lot of people puffing to make a cloud that may invade other apartments.

Would someone clarify for me or am I a bit confused?

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My feeling is that the smoke from cigarettes is the physical form that contains the poisons and carcinogens and migrates from one apt to another and the "odor" is what is the proof that these molecules are permeating another unit. I'm sure a scientist could break it down more but according to the people that make the hepa air cleaner I bought to clean the migrating cigarette smoke from my unit, smoke particles are large and require a special absorbant charcoal filter to trap the particles. However, I read that the gases that precede the actual smoke odor are more noxious than the smoke. Does this answer your question?

The explanation is great, thank you. But, without being facetious, I would like to ask you: Don't you think that the smoke emitted by a single cigarette smoker smoking will not dilute over distance due to air volume in the room? How much of this smoke is going to migrate to another apartment through electrical conduits, baseboards and holes?


Similarly, I get the aroma of cinammon bread from an industrial bakery located 5 blocks away from the apartment parking lot. Is the smell of cinammon proof that cinammon is present in the parking lot in significant quantities? What about the smell of fried fish in a hallway? Does it proof that particles of fish and penetration of fish is in the hallway?

Don't get me wrong, smoke travels, but it takes a small army of cigarette smokers or a discotheque full of people to generate the type of smoke that would invade apartments.

This is where I question whether odor (not to penetrate another person's apartment) = smoke.


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The explanation is great, thank you. But, without being facetious, I would like to ask you: Don't you think that the smoke emitted by a single cigarette smoker will not dilute due to the air volume in the room? How much of this smoke is going to migrate to another apartment through electrical conduits, baseboards and holes?

I get the aroma of cinammon bread from an industrial bakery located 5 blocks away from the apartment parking lot. Is the smell of cinammon proof that cinammon is present in the parking lot in significant quantities? What about the smell of fried fish in a hallway? Is this proof that fish particles are now present in the hallway?

Don't get me wrong, smoke travels, but it takes a small army of cigarette smokers or a discotheque full of people to generate the type of smoke that would "contaminate" and eventually invade apartments through exhaust systems and crevices.

This is where I question whether odor (that should not penetrate another person's apartment) = smoke.


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Fish "particles" will not give you cancer, or, hopefully, set off asthma or other serious allergies. The reason secondhand smoke is being taken seriously in courts these days is because the surgeon general has legitimized the serious health issues caused by secondhand smoke/odor etc. It's not akin to strong perfume odors (which can cause allergies)or cooking odors though those can be restricted under the "unreasonable odors must not permeate other units or common areas" clause in house rules. Secondhand smoke has been proven to cause cancer and that has evolved into an actionable violation that has been upheld in the courts.

And, yes, the smoke/odor from one cigarette can and does migrate through floors/outlets. Our Board has checked out complaints of this nature and we've seen one cigarette produces this insidious smoke that travels and is very evident in adjacent units.

You sound angry. Yet, you cannot convince me that smoke from a lonely smoker is not diluted in a large volume of air and that the odor does not indicate presence of smoke.

Sorry, but the topic becomes rather emotional and statement repeated of what is well know: secondary smoke causes cancer; but, is odor too? I think this is a new one!
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I lived in a building where a resident lived on the lobby floor across from the elevator. She was a chain smoker and rarely left her apartment. The smoke/odor was horrible. When she opened her door smoke would escape to the common hallways. The rug and the outside of her door were brown from nicotine stains. We put a deodorizer in the hallway and advised her of the complaints that were being received from other owners. She was receptive to the complaints and tried to smoke near an open window. The situation remained the same. It was an embarassement to take a friend to your apartment and have to smell cigarette smoke.
I believe that smoke odor is the same as second hand smoke. How would the outside of her door to her apartment and the carpet be brown from nicotine? I guaranty that everytime you waited for the elevator you got to breathe some second hand smoke. With that said I believe that smoke and odor is the same.

How do we know the smoker was lonely? Maybe she was happy to be alone and left to her smoke. Maybe her husand left her because of secondhand smoke. Maybe she loves her cigarettes more than life itself. Sorry, I couldn't resist. As an ex 2 pack a day smoker, I know what it is like to be addicted, but as someone who gave it up 25 years ago, I have little patience for inhaling other people's smoke/odor/carcinogens/particles whatever. If we wanted to expose ourselves to the risks of any and all of the above, we can smoke firsthand and suffer the consequences. In a community you have to go with the socially accepted norm and that is not to inflict your lifestyle on other people. It's the basis of civility and without civility and respect for other people, life in a co-op hasn't got a chance. It is very draining and not happy work for the Board to make shareholders comply. Back and forth with counsel takes enormous time and energy from an unpaid Board and we have to sacrifice our personal lives for the sake of the greater good.

I think AdC meant "lone smoker," not "lonely smoker." In any case, his strong defense of smoking odors is very odd, especially that cinnamon comparison. Smell operates on the existence of microscopic particles and not waves. Thought it may stretch the bounds of AdC's imagination, particles can travel surprising distance ... and even leaving aside the well-documented effects of secondhand smoke, cigarette odor is both noxious and obnoxious. It's a warrant of habitability issue -- and he ever-helpful Joseph Shkreli put everything in exactly the right, proactive context.

Check your By-Laws. Typically, "each shareholder" gets to vote, regardless of being in default on the lease (Article II, Section 5 in our By-Laws).

If you're in the midst of canceling someone's shares and lease due to default and have already gotten at least one court to rule in your favor, it's murkier. Ask your attorney.

No wording such as "in good standing"?

Yes, by laws state "in good standing"-does that imply arrears and violations render the errant shareholder ineligible to vote?

generally means current with maintenance, no arrears whatsoever, no House Rules violations, etc.

Check with your Board; if you're on the Board and are the liaison with the co-op attorney, check with him/her.

My friends

The coop first and foremost is a corporation.

Thus, corporate bylaws prevail at all times. Yes, there may be case law that overrides some by-laws, but this is not a frivolous undertaking. Always have the co-op’s attorney provide guidance as self interpretation can lead to chaos and pain.

Unless specifically defined in the co-op’s by-laws, one is spawning a firestorm, if it is determined that the board of directors was arbitrary and capricious. In my view, the bylaws must explicitly state that a shareholder in default and duly notified cannot vote in one or more procedures, else one is seeking trouble.

You mention the president, but what about the rest of the Board? If shareholders are concerned, what about a change in the guard?

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You say that "Our maintenance income does not meet our operating expenses," which is certainly a problem. The money's got to come from somewhere; depleting your reserve fund to pay day-to-day expenses is intrinsically a bad idea. You're just putting off the day when you'll have to raise maintenance -- and probably by a lot.

As for your reserve fund itself, the rule I've heard is that your reserve should contain at least three months' worth of maintenance. Lawyers performing due diligence for potential buyers are going to get nervous if the reserve fund is lower than that. "Far less than $100K" sounds like way too little for a 120-unit building.

It can be difficult to overcome resistance -- both within the Board and among shareholders -- but a straightforward, transparent approach is usually best. "We're spending $X per year, and we're not wasting any of it on unnecessary luxuries, so it's a matter of simple arithmetic that maintenance needs to be $Y per share to balance our budget." Especially given the current credit crisis, people should readily understand that careful money management is essential.

The only organization that can survive spending more money than it earns is the federal government. All you have to do is convince your board pres to buy a printing press and then have the super crank out greenbacks.

Seriously, you're in debt and you're going deeper in debt. How on earth is that normal? Remember that a "co-op" is just the cute name for your Corporation. Corporations need to make more than they lose or else, well, ask your board president if he remembers AIG and their ilk.

Ask your corporate accountant to attend a board meeting and tell her/him to give you the benefit of his/her professional experience.

I'm guessing you're going to have to increase your maintenance and find other ways to broaden the revenue base. A flip tax did wonders for our co=op. Good luck.

A negative budget, e.g.: planned operating deficit, leads to disaster

If a board votes negative budgets year after year without wresting itself from the abysmal situation, the board of directors is plainly abrogating its fiduciary responsibility. The board can be sued and one can further assert that the BD&O insurance does not cover malfeasance by the board, e.g.: fiscal irresponsibility.

Why do so many boards feel they can operate in a laissez faire atmosphere? In some cases its naïveté. In other cases, boards are obtuse or live to please their constituency, e.g.: not raise maintenance, not impose assessments. To what good purpose?

If a bank reviews the budget and the history of the co-op in anticipation of a line of credit or a loan, it will ask for several years of annual reports as well as the currant year’s budget and pro-forma.

What can the co-op pledge to the bank as collateral? The answer is the maintenance income. But if maintenance income does not cover the costs day-to-day, how will the co-op repay any loans or lines of credit?

A series of operating deficits as well as planned losses can preclude the acquisition of operating funds and lead to bankruptcy. In truth, there is a condo nearby to our co-op. It was a co-op, but the board ignored all the deficits over and over again. They went to the well one more time. This time, the bank said absolutely NO. In turn, the co-op was forced to convert to condo. Besides the normal transformation costs imposed upon each shareholder, e.g.: several thousands of dollars for each shareholder, the owners (shareholders) were required to absorb their prorate burden of the outstanding debt and payables of the co-op. These amounts were in the tens of thousands of dollars for each shareholder. Many were required to increase their loans by substantial amounts. So who won?

The monthly maintenance must cover all expenses, all payments for loans and lines of credits as well as fund and maintain a modest operating (cash) reserve fund. In addition, a board is remiss if it does not have a yearly ongoing assessment and sadly most co-op boards ignore the need for this capital reserve fund; even in the face of bylaws that define such a fund.

How many have read the AICPA document dealing with co-ops and condos as noted elsewhere in this board talk?

So, a co-op always needs to have its house in order.

What about the case where we have massive deficits each year which occasion massive increases and assessments each year and nothing is done in the building - and money disappears - should you not question the board, accountant and management company, but apparently this situation is not that uncommon yet apparently nothing can be done about it - any advice will be welcome

Run for the Board.

Only when you can work from the inside will you feel comfortable. And only then will you have access to the information you seek without legal proceedings.