I don't what is the ratio of apartment retained by sponsor and those individually subscribed, if you have a co-op counsel hired by the co-op. The issues here are many:

1."Sponsors are allowed to sell apartments WITHOUT board approval. The Board has no idea who the new neighbors are or, no personal recomendations, no idea of thier history. Or if they can pay the maintenance."

A: This is true and approved by the General Attorney's Office. For your info, this is how the co-op became a co-op.
The reason for this is to be able to complete the conversion of the building. Although a mixed blessing at times, you are better off to have the co-op convert and have the board "bring into the fold" the new shareholders, than have the sponsor keep renting units.

If you have a good relation with the sponsor, you may ask to have the new purchasers meet the board to go over any questions they may have. JUST and INFO EXCHANGE, not an ADMISSIONS NIGHT! Some SPONSORS have agreed to this.

2-"Sponsors are not required to pay the CoOp a flip tax. Which, if you sell your apartment, you have to pay."

AGAIN, I don't care for "flip taxes" and they may not make too much sense in a high percent sponsor represented building. After all, the flip tax will subsidize the sponsor by the % it controls. INSTEAD, an assessments makes the SPONSOR responsible for the improvements of the building and building reserves.

"All of which, defeats one of the objectives of a CoOp. For example, one sponsor sold a group of studios to a few SouthAmericans who for years, allowed thier friends to use the building as a hotel. After numerous (some serious) problems, we were able to stop this. And, the Sharholders are also losing money on the Flip tax. "

-- If it was stopped years later, why wasn't it stopped years before??? Sometimes it takes boards to consult the problem with co-op counsel and clarify issues. Don't know if this was your case. Finally, if the investors were South Americans or Jews or Australians or Chinese or UFA (for Unidentified Foreign Aliens) the bottom line is that boards as well as residents have to be atuned to what is going on in the building...some may think that this should be left TO HOMELAND SECURITY!!!

Safty Issues: Sponsors generally dont care who they sell to, just so they get top price. We have had prostitutes and bookies living in our building.

--From "have had" means that you do not have them anymore. So, the conversion worked and these individuals, considered society "scums" are no longer present. Well if the sponsor rents to the same individuals, you have the same situation. The main thing is to be ALERT and discuss the problem with SPONSOR if you have a good relationship or with you co-op counsel as to any irregularities that might be going on in a building.

Finally, ADMISSIONS COMMITTEE, may have similar problems. The bad guys also know how to look like GOOD guys too. So, no matter how much due diligence you do, there is something that may INFILTRATE TOO! Also, while we do not call "PROSTITUTION" certain life-styles, you may end up scratching your head as to who will be the "transient" roommate of some perfectly dignified individuals (I'm sorry if I strike some a sensitive cords with this statement!).

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