I never said that the clause allowed for "unfounded charges". What the clause allows for is costs that are incurred in the collection of arrears or any (common area) repairs that are caused by damage by either the shareholder or anyone occupying their suite.

If it's a repair to the building that the co-op at large has to pay for and if the co-op does not have sufficient funds in reserve to pay for those repairs, then those costs are past onto the share-holders. Furthermore, if those repairs are in excess of $20,000, the shareholders must vote on that repair.

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In the prior talk message from Ned in Toronto; I'm curious, in which governing document does it state, "If repairs to a coop building area is in excess of $20,000, the shareholders must vote on the repair"?

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Hello Deborah,
It's in our buildings Rules & Regulations under a section specific to board operations. "Limits of Authority". We recently amended it to allow for the board to make immediate decisions for expenses over $20K if it was an emergency situation that had an immediate or impending risk to health, life, property, infrastructure, safety or the environment. We then defined what an emergency situation constitutes and for example, no heat in multiple units, multiple frozen pipes etc. Shareholders must be informed of the emergency expenditure (>$20K) within 4 business days of the occurrence.
Ned

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Ned,

That $20K number is news to me. I've never heard of such a thing. Maybe it depends upon where you live.

Here in NYC, our Board has never had any restrictions like the ones you describe. If something needed repairing, we went ahead and fixed it without limitations. After all, that's the job we were elected to do.

I wonder if that's a Toronto vs. NYC difference?

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A. “It is impossible to determine the validity of the fee without knowing the content of the letter and the terms of the co-op’s proprietary lease,” said attorney Michael T. Manzi of the New York law firm of Balber Pickard Maldonado & Van Der Tuin, PC. “Many proprietary leases include a provision that permits the co-op to charge a tenant/shareholder for the co-op’s legal fees if the tenant/shareholder is in default and the co-op brings an action or proceeding for the default. If the co-op’s proprietary lease includes such provision and no other provision pertaining to attorneys’ or other fees, then the co-op may not charge a fee for the letter unless the letter constitutes a notice of a default under the proprietary lease and the co-op brings an action or proceeding against the tenant/shareholder. Some proprietary leases include broader provisions, however, that would permit the board to charge such a fee.


“Even if the fee is valid, it is poor practice to impose the fee on some shareholders but not others and in some cases such practice would remove the board’s action from the purview of the business judgment rule. However, there may be something different in this situation that caused the board to impose the fee. Regardless, the tenant/shareholder should write to the managing agent and request a justification under the terms of the proprietary lease for charging the fee and inquiring as to why the board imposed the fee against her but not others.”

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