Please see this NY Times (12/30/07) article.

http://www.nytimes.com/2007/12/30/realestate/30home.html?pagewanted=print

Space is one of the parameters based on the article.

Quite frankly, as we have not faced the issue I cannot offer an opinion.

What is the fee for?

When you say "adjusted for the size of the unit," are you referring to the residential unit, or the HVAC unit?

Do some units use much more electricity than others?

Need more information....

HAPPY NEW YEAR!

Thanks for your questions.

The fee would be for a yearly maintenance contract that each condo unit owner would pay for their heating/ central air system.

Also, residential units vary widely in size, and therefore also electricity use. Additionally, half the owners are not using their apts,. full-time.

Hope this helps

In our NJ coop (not condo, we have heating/cooling units (essentially fans and fins) beneath each window in each apartment supplied through a water loop (hot or cold) depending on the season via our central heating and cooling plants.

As part of the maintenance, our staff cleans the units, cleans the condensate pipe, replaces filters and performs any necessary maintenance, e.g. fan replacement. This is baked into the monthly maintenance each unit pays which in turn is based on the number of shares. Thus, our costs are based and bundled on a shares per unit basis, regardless of the number of service calls or the number of units in the apartment.

When we convert to condo as we expect we shall, we will continue the same maintenance program.

From my brief reading of the dialogue herein, your building is engaging an outside contractor rather than employ in house staff as we do to perform the tasks above. Perhaps there is no in house staff available.

Using your $352 / unit times our 500 units, I can say that our in house costs are significantly less.

I also think this should be included in the monthly charges and based upon the % shares of each condo unit.

It also seems rather expensive to me - a little like highway robbery, in fact.

http://www.habitatmag.com/ Click on the cover and then the article...

TITLE Freedom of Choice
DESCRIPTION The FCC rules on cable TV building monopolies.
TOPIC Telecommunications

AUTHOR Frank Lovece
MAGAZINE ISSUE January 2008 - Number 241
ARTICLE TYPE Hotline
PAGE # 42-44

Yes, I saw that ... am wondering what your building is doing.

Every co-op and condo should have both (cable tv and satellite) systems in their buildings to allow shareholder to have a choice. Now that Verizon is the new kid in town, people may opt for Verizon if Time Warner Cable prices can be beat. Time Warner has a monopoly on most of Manhattan. It will be interesting to see how many TWC customers will jump ship to Verizon when it is available everywhere.

Find yourself a GOOD real estate lawyer. NYC has volumes of regulations on construction, buildings and more.

PRESS RELEASE
CONGRESSMAN CHARLES RANGEL

FOR IMMEDIATE RELEASE December 19, 2007

Contact:
Emile Milne 202-225-4365
Elbert Garcia 212-663-3900

RANGEL LEGISLATION PROVIDES RELIEF TO CO-OPS

Provision would allow housing cooperatives to determine commercial rents without sacrificing tax benefits to shareholders



WASHINGTON - Thanks to the efforts of Congressman Charles B. Rangel, hundreds of housing cooperatives boards in New York City will now have greater flexibility in the rent they charge commercial tenants.

Included in a recently passed Mortgage Forgiveness Debt Relief Act of 2007 (HR 3648) is a measure that allows co-ops to determine commercial rents without the fear that the additional income would disqualify owners from deducting their proportionate share of the building's mortgage interest and taxes. Under current law, co-ops are limited to charging commercial tenants rents that do not total more than 20 percent of the building's total income from rents and cooperator maintenance payments.

Rangel was happy to see that Congress could come together to resolve such a longstanding issue.


"I am extremely pleased that the tax code will treat people who live in co-operative housing the same way as homeowners and condo owners are treated when it comes to their renting out part of their property," said Rangel, Chairman of the House Ways and Means Committee. "I hope that this will provide relief from for some from the high housing costs in New York."

Co-ops would be allowed to pass through applicable tax benefits if they meet one of three requirements:

1) If 80 percent or more of the co-op's gross income is from the tenant stockholders

2) If 80 percent of the total square footage of the building is used or for residential purposes.

3) If 90% of the costs of operating the building are for the benefit of the tenant stockholders.


Rangel thanked a number of groups, including the Council of New York Cooperatives and Condominiums, for their support and assistance in helping to tackle this issue.

"By working with advocates and industry groups, we were able to craft legislation that made sense to both sides of the political aisle," said Rangel. "Thanks to the hard work of many, the federal government will be able to provide some relief to families as they struggle with the rising living costs."

The co-op provision included in HR 3648 is part of a larger piece of legislation that was crafted as part of a response to the current subprime mortgage crisis. The legislation would provide relief by permanently excluding debt forgiven under these circumstances from tax liability. It would also help would-be homeowners secure their investments through an extension of the tax deduction for private mortgage insurance, and would ease restrictions for qualifying as housing cooperative corporations.

Amended by the Senate last week, The Forgiveness Debt Relief Act of 2007 is expected to be signed by President Bush later this week.

What does this mean for the buildings with 80 20 problems

This would defeat the development of the "farse" term cond-op. This unfairly keeps the commercial establishments in the hands of the developers (shareholders of the commercial spaces). I live in a cond-op and wondering how can we sustain ourselves in these economic times,but by increasing maintenance all the time. Where's the commercial establishment's contribution to the welfare of the building and shareholders? Money drained.

Presumably, fortuitously or hopefully, the apartment renter has homeowners insurance.

The renters file a claim with their insurance carrier.

The insurance carrier obtains reimbursement from whichever is deemed to be the culpable or culpable parties.

= = = = = = =

For instance, a renter in a sponsor’s unit, doing some “upgrades” had a workman installing hanging lights. The ceiling/floor between apartments is poured concrete.

The workman drilled into the ceiling, perhaps a bit too far, and drilled into an imbedded conduit severing the local electrical service within part of the apartment above.

In this case, the aggrieved homeowners were advised to file a claim with their insurance company. The aggrieved shareholder’s insurance company can then file against the sponsor, the sponsor’s renter and (or) the renter's workman.

Yes, the coop office ensured that before work began the workman had adequate insurance coverage in case the workman damaged the coop’s property.

you hit the core of the problem on the nail. bingo. now, the important thing is also that the coop neglected to fix the leak at first notice (from a neighbor) of sings of it. given that, who pays for what?

See if this works to view the article:
http://www.northjersey.com/

Then on right side under "real estate" there's an article:
A growing problem in our houses: mold
Dated: Sunday, December 16, 2007

Or this direct URL may work:
http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjcxN2Y3dnFlZUVFeXkyMSZmZ2JlbDdmN3ZxZWVFRXl5NzIzMzQ0NQ==



As it is copyrighted, I cannot reproduce here.

Read the repairs to a unit accourding to the PL and what remedies a co-op has in cases of negligence on the part of a shareholder including sponsors.

However, there is a need to put the shareholder on notice:

After 10 business days if not fixed, the co-op may do the required repairs and charge the shareholder regardless if sponsor or not. If the leak constitutes an emergency, the co-op resolves the issue and charges back the shareholder of the unit for the problem caused by a negligent act.

This scenario may change if the leak was not considered negligence on the part of the resident. It may still be co-op responsbility if the incident was not caused by a negligent resident (shareholder or not).

The best thing a co-op does is to be proactive; try to resolve the issue before escalates by giving adequate notice and deadline and intervene if necessary.

Always copy your co-op counsel so that he/she is in the loop in the event of other problems.

AdC

it was the neglegence of the coop. the tenant was traveling.. the super was notified by tow neighbors in a 15-20 day period. . repairs were not properly or effecively undertaken. result = almost three weeks of mold and subsequent damagees. the coop is neglegent. - the question is: is the sponsor also reponsible since he is the landlord.

you said the tenant was traveling. And the leak was reported to the super by two other residents. You need to find out if the super/building had keys (access) to the apartment that was leaking. If there was no access... Then this may not constitute negligence by the building as there was NO access. You can only "break in" into an apartment with a licensed locksmith if there is an emergency. Emergency is something that is Life threatening, or Server Property damage.
Access to the apartment is Key here, as I see it anyway.

there was access. the first neighbore reported the stench of wet plaster and the second got leaked on. how does the sponsor fit into all of this?

The sponsor fits in because he/she is the shareholder (owner) of the apartment in question.

The landlord (in this case the sponsor) is responsible for the negligence of its tenant.

In other words, the chain of command is:

co-op - shareholder - subtenant.

Co-op deals with shareholder
Shareholder deals with subtenant.

Done and gone!!!

AdC

1. The co-op ALWAYS contacts the owner or landlord, in this case the Sponsor. Forget about the resident, he/she will turn your letter to his/her landlord. Therefore, the co-op through management deals with the SPONSOR.

2. If there is a minor plumbing issue, the SPONSOR is told to get a licensed plumber to deal with the deficiency, if in your policy you demand the use of a license plumber.

3. A deadline for the repairs is always set if minor and not causing major problems to others, e.g., a leaky faucet, a non-operational shut off valve, a toilet tank that runs non-stop, but you can turn the shut off valve off.

4. If you are dealing with an emergency, the co-op intervenes immediately by invoking the PL and charging back to the SPONSOR.

5. What is not negligence by way of example: an unexpected rupture of a hose under the sink that was installed appropriately, but was an obvious material failure. In this case, the co-op is responsible no matter if the shareholder is the owner of the hose.

In your case if the co-op provided notice to the sponsor when the neighbors complained, then the sponsor is responsible for not following through. However, the co-op should have earmarked the problem and instituted the PL by doing the repairs for failure on the part of the sponsor to cure the problem.

AdC

1. The AICPA has a wealth of documents for homeowners associations that will provide excellent definitions and recommendations. To some extent, I am surprised the AICPA is not quoted more often herein. Quite frankly, many cooperatives seem to ignore the good advice and recommendations of the AICPA. In my view, this is how many buildings enter treacherous waters and founder.

2. Oftentimes the proprietary lease and the bylaws have stipulations regarding the need for various reserve funs and yes there are several types of reserve funds.

3. This forum is also a treasure trove regarding reserve funds and one ought to search herein.

4. Your ousted accountant (CPA) firm should also have valuable information.

5. The CAI (Community Associations Institute) website http://www.caionline.org/ is also a treasure trove.

Ted has good advice.

Just wanted to leave you with some impressions as your statements strike different chords:

1. Flip taxes are also ways of subsidizing future shareholders.
2. If you pay for an elevator now, it has more than 15 years after it is renovated, i.e., you may sell in 3 years and you contribured to 12 more years of useful life for a future shareholder.

In other words, building reserves are not just for your term of occupancy; in fact, having reserves contributes to the overall investment and value of the property and its sellability. A potential buyer will see a building with $1 million reserve fund or reserves in better light than if the same building were to have a mere $70 K in the bank as reserves.

A reserve plan should be ideally supported by a replacement plan. At least, this will help shareholders see the value of builidng reserves.

To think in the here and now is just a condition called Myopia.

AdC

Sad but true. From my very own personal experience haveing managed many properties the board member(s)appear to be the first one to break their own rules more often than not.

Example: "All dog walkers/owners must take their pets on the service car and out the service entrance except for board members who can use the front elevators and go out through the lobby." Could you also ask the staff to enforce the rules.

FN

Oh FN dont get me started on Board members braking rules.
I can go on for ever listing what goes on. Not all board members though. Just a few that feel privileged.
Its a shame that we just cant tell them the truth and what really is on our minds without knowing that to do so would mean looking for a new job.
Pg

First there must be a tone of fiduciary responsibility and ethical values which must be inculcated in the board’s activities day after day, decision after decision, meeting after meeting, etc.

Basically personal gain or good are checked at the door and the it is the good of corporation and the shareholders which is paramount.

In our case, when we found a board member had broken a rule and wanted to be grandfathered, we then found a replacement board member and asked that offending board member not stand for reelection. This was kept quiet, other board members were aware, but not made public. This action was taken even after the offending board member took corrective action.

In my view the board needs to behave in a proper manner at all times.

This is one reason in our coop the board of directors does not have access to any waiting lists for any cages, parking, etc. This simple expedient eliminates any chance of personal persuasion and also allows the board to face the shareholders and honestly respond: ”I don’t know who is on the list or in what position, nor can I influence the list, nor would I want to influence the list.”

Why don't your board contact the sponsor through your management to request that the seat on the board be given up for the explanation provided below: deadlock during decision-making. Alternatively, invite the sponsor to participate for the same reason.

Unfortunately, if the sponsor's number of shares if voted all for one member is able to retain the seat, then there is not much to be done except keep asking the sponsor to give up the seat.

In most cases, the sponsor may retain the seat to have access to financials. In many proprietary leases, boards cannot make an independent decision to assess or increase the maintenance if the sponsor still holds a certain percent of shares in the corporation. This is to protect the sponsor's own operating budgets from unforseen major incrases, specially when the sponsor may have a large number of apartments occupied with rent controlled, non-eviction tenants.

AdC

Why don't your board contact the sponsor through your management to request that the seat on the board be given up for the explanation provided below: deadlock during decision-making. Alternatively, invite the sponsor to participate for the same reason.

Unfortunately, if the sponsor's number of shares, if voted in one block for one individual, is able to retain the seat, then there is not much to be done except keep asking the sponsor to give up the seat.

In most cases, the sponsor may retain the seat to have access to financials. In many proprietary leases, boards cannot make an independent decision to assess or increase the maintenance if the sponsor still holds a certain percent of shares in the corporation. This is to protect the sponsor's own operating budgets from unforseen major incrases, specially when the sponsor may have a large number of apartments occupied with rent controlled, non-eviction tenants.

AdC

Why don't your board contact the sponsor through your management to request that the seat on the board be given up for the explanation provided below: deadlock during decision-making. Alternatively, invite the sponsor to participate for the same reason.

Unfortunately, if the sponsor's number of shares, if voted in one block for one individual, is able to retain the seat, then there is not much to be done except keep asking the sponsor to give up the seat.

In most cases, the sponsor may retain the seat to have access to financials. In many proprietary leases, boards cannot make an independent decision to assess or increase the maintenance if the sponsor still holds a certain percent of shares in the corporation. This is to protect the sponsor's own operating budgets from unforseen major incrases, especially when the sponsor may have a large number of apartments occupied with rent controlled, non-eviction tenants.

AdC

Thank you, AdC.

"if the sponsor's number of shares, if voted in one block for one individual, is able to retain the seat, then there is not much to be done except keep asking the sponsor to give up the seat"

So you're saying that apparently the sponsor is voting for himself at each election.

Hm. At each election the sponsor's name always appears on the ballot, and we (the shareholders) are told to vote for four additional officers. So the way it is always presented to us is that the sponsor's presence on the board is inevitable. We aren't given the option either to vote for him or not. He is just always there, an inevitability.

If there are five directors and the sponsor retains at least 20.01% of the shares, the sponsor's rep is automatically elected. And that's if all shares are voted, which (of course) they aren't.

Even if every single shareholder votes, there is a sixth person running against the sponsor's rep, and the sponsor's shares dip below that 20.01, you cannot hope to see the sponsor's rep defeated until the sponsor's shares dip to around 16.5%:

shareholders split 83.5% among 5 directors (16.7% each director)
sponsor's rep has 16.5%

Hope that sales are brisk.

Thanks for the info, Batch; very helpful.

Well, I guess the solution is to bring one more officer on board. So technically there will be six board members; but, since the sponsor never comes to board meetings, it will be as if there are five members and deadlocks can thus be avoided.

GK - Unless your sponsor controls enough shares of his own and/or by proxy to keep voting himself onto the board, or your by-laws give him the right to be on the Board, I see no reason why he has to be on the board.

You said his name is always on the ballot and you're told to vote for 4 BMs. Who creates the ballot? Who's "telling" you to vote for only 4 others? The sponsor, board, mgmt, coop attorney? Who chairs your annual meeting and oversees the election proceedings?

If your sponsor doesn't control enough shares or have the right to be a BM per your by-laws, get more Shs to run for the board and vote him out. If board votes on coop business keep ending in a tie, the sponsor doesn't vote and nothing gets done, that's unproductive. Talk to your mgmt company or attorney and get some straight answers as to why the sponsor is a permanent fixture on the ballot and why you don't have the option to vote him in or out. And get other Shs involved. If you want to get some action on this, you have to take some action.

BP, thank you, as usual, for your input.

The sponsor owns just under 20% of the shares at this point.

...or your by-laws give him the right to be on the Board...
I've looked again and I see nothing in the bylaws that explicitly gives the sponsor this right. There is one passage that confuses me, though:The president shall be a member of the board, but none of the other officers need be a member of the Board. . . . An officer who is employed by or affiliated with a holder of unsold shares need not be a shareholder.
BP said:You said his name is always on the ballot and you're told to vote for 4 BMs. Who creates the ballot? Who's 'telling' you to vote for only 4 others? The sponsor, board, mgmt, coop attorney? Who chairs your annual meeting and oversees the election proceedings?
It's amazing, isn't it, what people will accept when something is unfamiliar and they are told that that's simply the way things are done. In most aspects of my life, I question just about everything—but it has taken me five years to start peeling away the opaque layers of this co-op. At every annual shareholders' meeting I have attended, ballots are passed out by the managing agent. (In a thread from last spring I talked about how the managing agent "lost" my proxy at the most recent election.) Those who are running for the board are listed with a checkbox next to their names. The sponsor is also listed, but his name is in bold and there is no checkbox. At the first meeting the person next to me said: "Oh, yeah, there are five board members, but you can only vote for four; the sponsor is always assured a seat." And, you know, I thought that was weird and I didn't really get it but I got busy with the rest of my life and didn't think too much about it.

I would like to get some independent advice on this. The board VP and I were just talking today about how we should seek independent legal advice re: a fuel spill that occurred in the building in October. Residents called the managment company to complain of overwhelming fumes; the super perceived that a spill had occurred and notified the management company. But the management company waited a full week to report the spill to the DEC, lied about when the spill occurred (stating that it had occurred just minutes before they called the spill hotline) and cleanup was needlessly delayed. As you can imagine, we're not happy about this, and we feel that we need legal advice. But co-op counsel is employed by the management company. So the board VP and I are concerned that we won't be dealt with honestly. (By the way, I've always been bothered by the fact that the co-op accountant and co-op counsel are both employed by the management company and wonder if that's the norm. Is it the norm? Not to mention that the only board member counsel/accountant/managing agent have any contact with is our problematic BP. I think I'm finally making some inroads into persuading others that this situation needs to change and that there needs to be more transparency.)

Thanks again for your feedback. I am going to push hard for removing the sponsor from the ballot or at the very least making him run for the seat like everyone else.

Good luck with your aspirations.

In my experience, the sponsor will be with you on the board until the last rental unit sells.

First, about the sponsor. It doesn't matter how many apartments the sponsor owns. What matters is how many shares the sponsor holds. Your building has 5 seats on the board, so the sponsor needs only 20% of shares to elect him-/herself to the board. When the sponsor holds less, you may be able to run five residents and the sponsor; if the 5 residents get the votes, they win. (Ask your attorney for details -- prop leases vary on how votes are counted in contested elections.)

As for the number on the board, it sounds to me as though you have a perfect reason for adjusting the number. As long as you explain to shareholders why you're making the change -- and do it politely (no reason to annoy the sponsor) -- they shouldn't have a problem. After all, it will increase THEIR voice on the board.

in our coop, the sponsor has a right to elect on person every year (unsually himself) and last year - the board president used all the sponsor proxies to vote himself and his own slate in to prevent a new comer from being elected. (the newcomer was actually a very decent person) - so what can we do about that?

In other words, is the term of office 2 years in which the sponsor is elected for two years, then the votes are used to elect another member? or

Is this a matter of double counting?

Who acts as the supervisor of the elections? The independent accountant and counsel or someone else...?

AdC

Every year without doubt this subject comes up. To be or not to be, that is the question, the bottom line is that any cap or pre buying scenario involves speculation. As in any speculative market there is risk. You are either the hero or the donkey when you sign for this agreement. I have been both donkey and hero, let me tell you first hand last years hero says nothing to this years donkey, so much for short memories.

Here is a new slant on this dilema, contact you local oil suppliers and ask for a rate keyed to the barge reseller index, your supplier will offer a percentage above this FIXED and POSTED rate (on the Journal of Commerce)number, you can use this as an effective tool to obtain price quotes on your fuel oil

It's all a ball game. The good thing about locking prices is that you will know what your budget will be during the heating months or during the time your contract lasts. However, it's hard to lock the prices much in advance because of the market volatility.

Just read and follow the forcast provided by EIA to have a better idea of what is an uncertain world, then roll the dice and make a decision. You may be lucky or you may not be as lucky, but at least you made a decision on best available knowledge for your shareholders if it goes the wrong way:

http://tonto.eia.doe.gov/oog/info/twip/twip.asp

Also, the new york mercantile exchange is a good page to check for current and past prices. I believe the webside is

http://www.nymex.com

Good luck with your decision!

AdC