Not necessary a rigged election, but our previous board knew the turn out at annual meetings was usually low, barely reaching quorum. Since they were unpopular and at least 1 or 2 seats would certainly change hands, they arranged for the annual meeting/election to take place in some basement in commercial area several miles away from our complex where no parking is available, expecting no one to show up. They were correct and only 5 or 6 out of the 16 needed for a quorum showed up. This ensured no election would take place and they postponed the election till the next year, giving everyone an automatic new term without being elected.

Unfortunately for them, they continued to do unpopular things and a majority of the owners signed a petition to remove the entire board and hold new elections close by.

This created bad feeling but sent a message to everyone in the condo.

This is a great anecdote. I'd like to send you my phone number just to confirm what's here and dot my "i"s and cross my "t"s. If you e-mail me at flovece@habitatmag.com, I'll send it to you. (I'm working from home today and not at the Habitat office.)

our board has been using the sponsor proxies to vote in their own slate in order to keep new shareholders from being elected.

Not sure about the word rigged, but "unsavory" things do happen,especially when you have different factions in a building and certain managing agents that don't act as a neutral party and drift from group to group and are not honest.

how about one in which six million shares are issued, over 5 million are voted and I lost by 806 shares and the board refused to do a recount. Prior election I "lost" by around12,000 or so, don't have the actual numbers handy and then a recount showed I won by around 18,000. if this isn't rigging, i don't know what it is.

"attorneys and managing agents are saying they've never experienced an actual rigged board election" ... what else did you expect them to say? Power corrupts is all I say. Best of luck with the article hope. Way too many people turning a blind eye.

How about over 15 years of the wife of pres and daughter of vice pres being appointed the election official by the managing agent and pres.
Plus a scam where they changed the voting,we could split and combine them,then a guy said he was the attorney for the building and he said the state had changed the law,we could no longer combine and split our votes,it was the new law.

How about over 15 years of the wife of pres and daughter of vice pres being appointed the election official by the managing agent and pres.
Plus a scam where they changed the voting,we could split and combine them,then a guy said he was the attorney for the building and he said the state had changed the law,we could no longer combine and split our votes,it was the new law.

What would you expect them to say. I agree with one of the writers "Power Corrupts". What would you expect agents and attorneys to say, they are part of the problem NOT the solution. Some of these professionals don't want change, they are getting something out of it, their positions to stay in place. With new board members changes happen.

flips taxes really only beneffited buildings in the first few years after converion to coop when there was lots of apartment turnover. otherwise they just add to costs and can turn off buyers. afterall, we have enough taxes, dont we?

They are an excellent resource for raising money for capital improvements. However, for accuracy sake, they should be referred to as transfer tax since few apartments are flipped and the fee you want to charge is not a flip tax which refers to a buy and sell in a very short time created solely for the purpose of making a profit. A transfer tax is used when the traditional buy/seller transaction takes place. It is an easier way to reaise revenue than constantly raises maintanence fees. Buyers would need to understand that it is just a cost of getting into the building and preserving the amount of increases to the lowest level and owners, that it is an expense for the profit made on the unit as a result of the quality of the building. This must be done using an excellent attorney who deals predominently with co ops. Your average real estate attorney might not know how to do this and protect your community. The charge can be to either the buyer or the seller or both and should go into the capital reserve account or a similar one so that there is no question as to the purpose of putting this into play and where the money will be used. Good luck, this is a smart decision.

flips taxes really only beneffited buildings in the first few years after converion to coop when there was lots of apartment turnover. otherwise they just add to costs and can turn off buyers. afterall, we have enough taxes, dont we?

I would think flip taxes also help small co-ops avoid people buying just to flip the place and as investment properties.It's important for small co-ops to have people who really want to be there.

I'll answer your second question first. Unless your proprietary lease or house rules state otherwise, there is no reason why the buyer and seller can't work that out among themselves. The seller needs to be aware that there is a flip tax so they can discuss it with the purchaser. The final results of the negotiation are usually included in the Rider to the contract of sale.

As for if it is beneficial, I would say it is. Especially for a small co-op that does not have a large base over which to spread costs like capital improvements, it can be a way of increasing capital reserves. Just make sure your board attorney is involved with implementing a flip tax. There are a lot of rules which need to be followed, and if you don't have any enabling language in your governing documents, an amendment to your proprietary lease may be needed. There have also been a number of recent legal rulings regarding flip taxes, so your attorney is the best one to help.

I too, live in a very large co op. Perhaps you might consider distributing ballots a few weeks before the meeting allowing owners to vote up until a set time at the meeting. Perhaps a locked box in the lobbies to collect ballots from those who cannot attend the meeting. An option to return the ballot by mail for snow birds or absentee owners. This will give people who cannot attend vote for whomever they choose. They can use a proxy if that is their choice. You can still have nominations from the floor if you choose to by allowing people to change their ballot on the night of the election. Be sure to have a line on the ballot with date and time so that only the last ballot cast is counted. My personal problem with floor nominations is that the voters don't have any time to learn about the candidate and might not vote as they would have with more information. If someone wants to run for the board they should be able to make up their minds at the start of the election process. Sometimes floor nominations are only used as a "spoiler" to prevent an announced candidate from winning. Give this some hard thought. You can then count the ballots THE FOLLOWING DAY, recount if necessry and announce the winners. I hope this is helpful.

There should be ballot voting. to allow proxies to be assigned to the board is in any case quite unfair, of course the same board will continue. With ballot voting someone can still run from the floor, the person writing the ballot can always change it at the meeting if they so choose to. But allowing the board to re-elect itself w/proxies seems quite suspicious at best. The question is, does anyone else other than the current board members run for the board? If so, people can fill out proxies with the name they choose, not allow board members assigned to the board.

In our large coop we post notices about 5 weeks in advance of the annual meeting to have people who want to run submit their name. We distribute the official meeting notice several weeks before the meeting which includes the proxy ballots with the names and backgrounds of anyone who wants to run for the board. A locked ballot box is at the front desk for shareholders to vote in advance. They can also mail them in. We have a representative from the building attorney coordinate the counting of ballots at the annual meeting. The ballots allow voting for the individual board members or giving the board the proxy to vote on their behalf (which is hardly ever done). We require a majority of the shares to be present at the meeting or voting by proxy to constitute a quorum to hold the meeting and official vote. You can never get this by requiring that many to be at a meeting.

I appreciate the responses. A few comments. Typically we have around 80 unit owners represented at the annual, out of nearly 400. So we need a proxy system to gain quorum in the current model since most unit owners don't attend, or live abroad. The folks that do show up tend to be the vocal complainers with an axe to grind.

The proxy allows anyone to write in someone to vote on their behalf, or give the Board the proxy. We argue that if a unit owner give the Board their proxy, they are in fact OK with the status quo. In the last four 4 elections, the Board has achieved over 40% of the common interest with just over 50% of eligible unit owners casting votes. So a sizable majority of votes cast are given to the Board either through attendance at the meeting or proxy. If unit owners were that unhappy, they could always give their proxy to someone else if they choose not to attend in person, so to say that we're always going to be reelected is not true if enough people were vote differently.

But I agree that allowing ballots provides more opportunity to vote for candidates on an individual basis, but we still have the quorum problem which adds complexity to the process. Nearly 20% of the building is non owner occupied.

I'm leery changing a process that works, because of a few outspoken critics who think the system is unfair, because their candidate rarely garners more than 15% of the vote.

In the last three elections, we've only had 2 or 3 other candidates run that were not already Board members. And in each year we've had people run from the floor. They always get about 15% of the vote.

I've been told by the managing agent that this is very typical in NY City and only a few buildings use ballots. So this is interesting feedback.

Thanks

I own a Co-op in

I sent that last comment a little too early - I own a Co-op and i am told that my lender is suppose to verfiy our insurance coverage trhough the Board of Directors. Is this something lenders do and has anyone seen how they communicate that to the board and how they determine a proper level of coverage?

This should be a new topic. You should be able to have the management co. for the coop provide the info directly to your lender, or have them contact the coop's insurance carrier to provide it to your lender. Generally, the coop has it's own underlying mortgage and that lender checks to see that the coop itself has adequate coverage.

I would definately charge a storage fee for the use of the area. We have storage bins in our basement,they are 5 feet deep by 8 feet high and 5 feet wide made out of metal and we charge $225 per year. You should also look into a company that builds wired sections so you can make actual storage areas that you can issue to the residents who wish to rent a storage area. Make sure you have them sign a yearly agreement.

I would say 2/3 of those present. In this case, 6 of the 8.

I have a small 10 unit building 5 shareholders how many shareholders do we need to remove a board member that has withdrawn funds from the building for personal use can we have 2 concerned shareholders

I would call the cops or contact the district attorney.

If you're talking about supermajority approval for something as required under your proprietary lease, the 2/3 majority almost certainly means neither "2/3 of 11" nor "2/3 of 8." It means "2/3 of the total number of shares issued by the co-op." Check your governing documents to be sure. Our own lease puts it this way: "... lessees owning at least 66-2/3% of the then-issued shares of the Lessor."

Three lawyers with fine tooth combs may provide five expensive opinions, but on the face of your statement, you appear to be a victim.

The camera may not be illegal or discriminatory at all and the coop may have very sound reasons for locating it where it does. While it might be pointed at your door it may be picking up everything in the hallway and has been located in such a way as to maximize the area under surveillance because of some past problem. In any case anyone in a public hallway or who leaves their door open should have any expectation of privacy.

My suggestion is ask in writing why the coop has located the camera where it is. Perhaps they will give you an answer that is reasonable. Or if upon determining that there are other locations it can be located with equally good surveillance costs, you can offer to pay to move it.

Hi Alan, That is not what I have read. They can't just do one door. One door is discriminatory. Especially if there is any history of different treatment or prior discrimination of the residents of the apt with the camera pointed at it. They would have to place cameras in all areas of hallways pointing at all doors for it to be non-discriminatory.

“... attorney Dean Roberts of Norris McLaughlin & Marcus, P.A. “Residents do not have an expectation of privacy in common areas, hallways, lobbies, laundry rooms, so any security measure installed there is usually reasonable.” Roberts continues to say that security only can become a problem if say, a camera is pointed at the interior of a particular unit or measures target individual owners or shareholders.
.....“You couldn't use [security] to harass,” Goldstein adds. “In other words, if I don't like my neighbor, I can't decide, if I'm the board president, to set up a camera outside their apartment, just so they know they're being watched. That would be bad faith. Boards always have to act in good faith. They can't act in bad faith. So, something would be lawful so long as done in the best interests of the co-op. If it's meant as a vendetta or based on personal animus, automatically becomes illegal.”

Dean and I are in total agreement.

see above . there is lots of animus in our bldg.

we agree that there may be a valid reason for camera location and if it is in the hallway and focused on hallway and closed doors there is not necessarily any invasion of privacy.

Ask the Board what their reasons are for locating it.

If they don't answer, you can waste money and sue (it will be very hard to win unless you find a smoking gun in discovery showing discriminatory behavior or a desire to invade your privacy) or you can opt to simply keep the door shut.

and remind us not to move into your building.
there is no reason for a camera to monitor residency if there are lobby entrance cameras.

It has come to my attention that even though there are security cameras every couple of feet most are just dummy ones and the only one working is directed at my apartment. Please advise

Perhaps they are in an eviction process and trying to prove that the Shareholder is either not living there or maybe they are illegally subletting the apartment. Before you jump to conclusions, there may be a specific reason to the evidence that they are building on this particular unit.

no changes in all that time it is a family apartment. Same residents there since before it went coop. I suppose a co-op could try to mess with that. But they have little to stand on.

NY Law Journal, 2010


“…..the business judgment rule will not insulate a board from liability where its actions are discriminatory or involve self-dealing—for example, where an apartment owner can demonstrate that he or she has been singled out for adverse treatment by a board decision to install security cameras only on some floors but not others."

Sounds like they over-stepped themselves.

PK, your timing is excellent. Last week I posed this set of questions to the attorneys who record Habitat Magazine's weekly podcast:

1. Can we ask about gun ownership or gun storage on our purchase application or at the admissions interview? If we can, what wording would you suggest?

2. What due diligence does a co-op need to do to reduce or eliminate liability in the event of a gun-related injury or death?

3. Can a co-op establish a policy regarding gun ownership and/or storage? If so, how should the policy be worded and in what document should it be placed?

4. Finally, are gun owners considered a "protected class", and can we reject a potential buyer based on gun ownership or storage?

I don't know when the questions will be answered or when the podcast be available online, but I suspect it won't be too long. If you're not on Habitat Magazine's mailing list to receive notification, I suggest you sign up.

Hi Steve, and thank you for the heads-up on the podcast. I think everyone is afraid of the topic but we must know what our liability is and what our rights are. I'm glad you have posed these questions and will watch for the podcast as these are the exact questions I have.

Does anyone have personal experience with this issue? (i.e. it came up at a board meeting or an annual meeting) If so, what happened?