Toxic co-op:

Recently I discovered the site shown in this URL along with the “article” shown:
http://www.brickunderground.com/blog/2012/02/ask_an_expert_what_are_some_signs_of_a_bad_co_op
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Then I commented via this URL:
http://www.brickunderground.com/contact
With my notes below:
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The “original” list on the website:
• Financial statements that are not audited or are delivered more than four months after the end of the fiscal year
• A board that doesn't meet on a monthly basis or record minutes
• Negative cash flow
• A history of constant assessments
• Interest or penalties owed for unpaid taxes, or late fees to vendors or contractors
• Dirty public areas of the building
• Problems with mice, rats, and/or mold
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My inline list comments and additions (shown with “[++ ….”), which I believe are more practical and less altruistic than the above list:
• Financial statements that are not audited or are delivered more than four months after the end of the fiscal year [++We are always late as our accountants are busy with other work and we always file for an extension. Given that are financials are 100% perfect, we don’t have an issue.]
• A board that doesn't meet on a monthly basis or record minutes
• Negative cash flow [++ Good point, but needs to be recurring, year after year. Unfortunately, this is not always evident as long term financials are typically unavailable to a potential buyer.]
• A history of constant assessments [++ Totally incorrect perspective as assessments are better planned and prorated over time than applied in backbreaking burdens periodically. Why not have a small assessment every year for ten months of the year (tax purposes) that builds the capital reserves that are inevitably required as a building and its infrastructure ages?].
• Interest or penalties owed for unpaid taxes, or late fees to vendors or contractors [++ not always evident in annual reports.]
• Dirty public areas of the building [++Better view: are there areas that are damaged, unpainted, peeling paint, mechanically non-functioning, etc.]
• Problems with mice, rats, and/or mold [++ Hard to determine, but does coop have an exterminator service that replies to shareholder requests without any extra cost to shareholders.]
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My additions and comments to the above list are:
• A coop with a history of high turnover of presidents and board members, thus demonstrating an absence of management continuity for the coop corporation.
• Recurring refinancing of underlying mortgages without a plan to pay down mortgages
• Multiple mortgages because the Board lack financial planning acumen.
• Mortgages with payment plans that only include interest and minimal to nil principle payoff, (and perhaps a balloon payment) at term.
• Lack of an updated capital improvement / replacement program forecast schedule in accordance with AICPA recommendations, e.g.: Board is flying blind.
• Not having any assessment or a long term program means the Board does not plan for the future and that all financial events and requirements are ad hoc.
• For a coop corporation that is not self-managed, a persistent practice of replacing management firms showing a lack of direction and stability.
• If self-managed, is there a lack of longevity for employees?
• If the coop permits rentals, is the rental percent greater than 10%, giving rise to a transient non-caring population of residents.
• Does the sponsor still own a significant portion of the apartments (e.g: greater than 30%, giving rise to a transient population of residents?
• Does the sponsor have seats on the board? Given the voting percentages required per the proprietary lease, can the sponsor easily block programs to improve the coop. e.g.: voting down capital projects, assessments, maintenance increases, etc., thus creating a stagnant environment?