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This is great, thanks so much. What is unique about our building situation is there is a perception that using our credit line and paying minimum amount of interest due monthly --couple of hundred bucks-- is in lieu of ever paying back at all. Becuase these are short term owners-3 years is the average. We hava a 20 year old elevator and roof and there is no projected budget that includes these things. It's a small building and the transients just want to pass the debt on to the next owners. The minority of us are looking to own for a 10 year time frame. So how does the fiduciary duty of the Corporation impact this failure to plan responsibly for major capital repairs? The answer we get from flippers is to use the credit line and don't worry because the mortgage is small--$150,000 $ and the value of the building a few million?
AR, I am on the Board, sadly, I don't have a lot to work with. What you are suggesting is what I believe in too. Are you a managing agent in the NYC area?
Yes, I am...
Feel free to email me directly if you would like off line assistance.
~AR
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That is just what it is.. perception and illusion. in the end, you are paying more than you should.
Unfortunately, the transient mentality is all too common. everyone is looking for short term satisfaction (this is why we have the highest personal debt rate also). It is not prudent. However, if the corporation believes they are acting within the best interest of the shareholders, there is no illegitimacy in their duty.
You need to run for the board, or show where they are wrong via an accountant or professional letter, as to make them accountable to their fiduciary duty.
With a mtge of 150K, I would suggest to make a plan for debt elimination and capital all in one. Have your managing agent assist, or do this for you.
One of my buildings are in a similar situation (only 14 units) and we owe 148K and have some repairs, but the plan will allow us to be free of debt in 6 years, while performing capital improvements at the same time.
~AR
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