Some very large coops have a committee of non board members that handle sales. They make recommendations to the board, which in turn makes the final decision. Not the committee or the shareholders.

Regarding disgruntled shareholders, not much you can do. It's part of the daily routine of coop life. Just keep the residents informed, educate them when necessary. As long as your decisions meet the expectations of the majority, and the needs of the building, you should take pride in your work. (it is a non paying full time job by the way)

Frank, With a coop your size it is very common to have the shareholders
vote on sales. That is what makes a coop different form a condo. In a condo the board handles all sales and the shareholders do not have a say. In a coop the shareholders have more control or say in who enters in their building. If you are a Board member this may seem unfair to you, but for a coop shareholder who has to live next to a new family or couple it is their right to have an input on a sale. A sale to the Board could mean something totally different than to a shareholder. The Board may push a sale through because it will bring more money into the building with the flip tax and make their life easier. A shareholder may see it as a quality of life issue. As a Board member you should give a little history of the new people that wants to move into the building and have them meet the shareholders and have an open discussion. Then let the shareholders have a vote, it's called democracy.

Bob,
I've seen this issue from three sides. I've been in the building when we used shareholders voted. It was a bit of a farce. Shareholders were led to believe board did its due diligence and background checks. Little did we know at the time the board did very little research. Board also said "no lawyers" would be admitted,would also have the children come to the voting meeting and on some occasions jjust the board would meet prospective buyers. It seemed to me that the shareholders were simpy voting on "looks" and their idea of a fit. Also, the vote would be a show of hands not a private ballot. No pressure there to say "yes". We ended up with having a lawyer in the building who took the building to several courts.

It's is a long story but this issue of having shareholders vote is not democracy - voting in a board and upholding the community's PL and house rules is democracy in action.

Its funny, as small as the building is no one really sees one another. It's not summer camp and pot luck dinners. It's living under one roof and hopefully all will treat their neighbor with respect.

I would end with the fact that a board follows (or should) code of behavior/ethics and stays abreast on new laws and coop matters. Shareholders do not always put in the effort to stay educated on coop matters.

Hi Frank-I guess my question is this: what would you have these people do? This is a very small co-op - but it seems that there is a really bad feeling that has never been resolved. Either it gets dealt with in a way that everyone agrees is to make a positive change or it will just stay the way it is. You say no one really sees each other and there are no "pot luck dinners"-frankly, maybe there should be on occasion. If the only time people meet as a group is the annual board meeting it is really not a time for socializing or airing grievances. Do you ever have informal gatherings? Has anyone ever suggested this? If people really want it to be different they should put the effort into making a change. I know everyone is busy but it is such a small group there should be a way for enough to get together a couple of times a year. And not for simply a "kumbaya" moment, but a time to behave as neighbors and fellow shareholders who all have a real stake in making a successful co-op. Because in so small a group, despite the efforts of the board, which I am sure is trying to do its best, 3 disgruntled shareholders out of 12 is still 25% and that is kind of a lot. It seems that there is a lot of bad feeling that has to be dealt with or it festers as it seems to have. Also, people who feel they have no other power often are the loudest in their complaints and look to do whatever they can to make themselves heard. Look at congress. I think maybe you should organize a pot luck. With lots of wine!

Thanks everyone for input. I am exhausted however because this small group is caring a grudge and are not interested in community goals. They continue to make personal attacks on certain board members and now attack coop's professionals. I really think their goal is to more vindictive and retaliatory than for the overall good of the community. After this issue they will move on to another and point the finger at someone else.

When they controlled the board I would add they never gave an ear to others.

Hi, we are small coop and our shareholders vote on the sale.

Another aspect to consider is who will be legally liable if a general shareholder vote denies a purchase and the purchaser sues for discrimination. You must check with your co-op's attorney, but in my opinion only those individuals who are at risk (the board) should be allowed to vote. You also need to also check who and what your D&O insurance will cover. A very convincing argument against having all shareholders vote on purchases and sublets is if they know they may be named as defendants in a discrimination lawsuit and not be covered by the co-op's insurance.

If a coop denies a purchase, if it is just the board or all the shareholders, you should never give a reason why they were denied. If you gave a reason then they can use that to come after you with a lawsuit.

A rejected purchaser does not need the formal statement of a reason to start a lawsuit. They can simply *claim* discrimination, start the suit, and then the legal process takes over. Unless all of the shareholders are willing to assume the financial liability of losing a civil suit, they should not be allowed to participate in a vote that can put a small minority of shareholders (the board) at risk.

Currently boards are not required to give a reason for rejecting a purchase, and I agree with that position.