I'm no expert -- nor a lawyer -- but I think that the state attorney general's office should be notified. The reason: co-ops are corporations, governed by New York State Corporate Law. Albany grants a corporation its right to exist, and Albany can prosecute violations of the law.

Anyone else? Anyone with experience in this?

The DA & AG won't do anything - that is the main problem - there were bills in NY Senate & Assembly for bill of rights for coops & condos - recently became only condo bill -however there are very fine laws on the books already the problem is that the Attorney General will not enforce them - lawyers for this type of action is $100,000 ti start - that is the other problem - my view is that if we could get publicity that would help immensely -

A pressure group perhaps ... of buildings with problematic boards. But we already have the good CNYC.

I had another idea, in trying to encourage the rating agencies to begin rating coops. Residents who lived in buildings managed by thuggish mafias might be enouraged to boot them once this situation seemed to quanifiably damage their apartment values.

D.

The AG will and has assisted many coops. If you decide to go that route, you must walk in with proof.
I guess the real question is, what is it you want? What is the goal?
Money? Retribution? Revenge? etc...
If you decide that financial restitution, then you may want to take your case civil, sue individually since the D&O will not cover intentful criminal acts.
All I all, your answer lies in asking yourself a more detailed question.

~AR

Right -- short but instructive jail terms, restitution to the coop, and, taking a page out of the securities industry, a way to bar them from holding office again.

I watched with interest that case of the guy who was kicked out of his coop, which stood up on appeal. Ditto the one in which the treasurer stole a million dollars, but the coop decided to keep it quiet. We know why -- if problems become public, buyers flee.

It's pretty hard.

It is best not to be high profile, you will distract buyers. But, at the same time you want to nail him/her. I would personally go the civil route, even as a class action if the building agrees, and sue them personally for damages.

Hmmm, class action. Does anyone know of an existing or developing case?

From all I've heard of the coop world, you'd think there'd be a mammoth one around somewhere.

Many years ago I had proof as well as now and it was sent to the AG - a staff member there called me and we had long discussions after each of my letters with documentation - yes they are stealing you bling - no the AG will not do coops - undermanned, underfunded - and the situation has gotten worse - they did Enron and Worldcom because they are "billions and we are only millions" same situation will not do - who do you know at AG that would consider our case and others

We've never been in this position.

But, no doubt your coop has board and officers insurance.
In as much as the carrier would need to cover any defalcation and attendant lawsuits, (depending on the lawsuit) they might be brought into the picture.

Again it is just a suggestion and not a recommendation.

Often ... but most D&O insurance, including ours, won't cover legal bills if the board is determined to have broken the law, or violated principles of sound business judgment -- e.g., I suspect thugging, fraud, self-dealing and theft aren't covered...

-Distressed

As they should not be!

What about you and new shareholders running for the board. I am not too convinced by statements that people are fearful. Yes, there are fearful people, but am convinced that people are not willing to assume their role and live to the contracted obligations of shareholders.

1. Participate in elections.
2. Serve on the board.
3. Abide by the rules.

Having 100 units vote for four to six bad pennies tell me that you should participate or move out. No sense in living in a place, not participate and critique.

AdC

It's the stock answer, but I'm afraid I find it, and the law as it protects coop living, insufficient.

I am neither a new SH nor a non-participant -- I served for a number of years as an officer, attend meetings, serve on committees, accomplished several key initiatives, etc.

Yes, I fear most residents don't care enough, and the ones who do, flee.

New York ought to be able to do better than that.

I do not want to enter into a long discussion, which may be more philosophical than what you expect as an answer:

Your own words,

"am neither a new SH nor a non-participant -- I served for a number of years as an officer, attend meetings, serve on committees, accomplished several key initiatives, etc."

-- Your only recourse is to continue to serve and be vigilant on the ways of others. This may lead you to many internal fights. YOU ARE YOUR OWN POLICEMAN - SUBSIDIARY PRINCIPLE of democracies - empowerment at the lower level possible.

"Yes, I fear most residents don't care enough, and the ones who do, flee."

--Again, you cannot do much about the indifference of those who are only interested in hanging their hats (live for a while) until they feel like it's time to go due to, e.g., work commitments, family, place does not fit their lifestyles or you name it!


New York ought to be able to do better than that.

--NO. New York is fine, people are not. Why should you impose the BIG BROTHER mentality, when SUBSIDIARY principle is not embraced and indifference reigns.


Join my camp or Winnebago mentality. Otherwise, grow a thick skin and be another indifferent resident.

AdC

AdC

Nah, AdC. Haven't general events of the last 10 years even hinted to you that a laissez faire approach can't solve every problem on earth?!

--Need new laws

It means you get involved if you care. Without involvement of those who care there is no better conditions.

Certain types of violent crimes decrease in summer because people are on the streets. Just like there are others that tend to decrease in winter when it's too cold.

Laws do not make much for you unless there is enforcement. Courts exist to administer the LAW. HOwever, what I read from many who expect BIG BROTHER is the COURT route means MONEY ($$$$$). Well, what else do you want???

An arbitrator that may pound on those that you wish to involve accuse without investigation, which in the end also means MONEY???

Unfortunately, nothing is for free in life: YOU WORK for the good of your community or co-op or YOU PAY to take people to COURT for being involved and serving themselves without your presence.

Sorry, but WHAT ELSE???


AdC

I want criminal prosecution for criminal acts. I want the DA, AG & police to be involved, even in $5,000 or $10,000 cases. I want criminal penalities to apply to people who give themselves priority in parking spaces, to managing agents who solicit and take bribes, to realtors-residents who abuse their board positions to snare business, to people who hire their pals for coop projects & pocket kickbacks.

Don't these situations sound familiar to you, AdC?

Distressed

People have as short a memory as amebas. In other words, you may prosecute 70% of crooks living in co-ops, but unless honest people get involve to prevent the problems or watch for their investment, HISTORY REPEATS ITSELF. So, in the past elevator companies have been prosecuted, management have been prosecuted, deals under the table have been prosecuted, but THEY CONTINUE TO HAPPEN in and out because GREED is a HUMAN TRAIT that cannot be erased. Then, there is LAZINESS, UNINVOLVEMENT and WHO CARES attitudes that allows CORRUPTION.

Years ago someone commented on the fate of the country in which he lived by saying, the GOOD PEOPLE are behind the iron safety bars placed in their windows while the BAD PEOPLE are walking the streets.

This is a good analogy. Unless every well-intended person is willing to serve on the board, corruption is bound to take place.

AdC

True and astutely expressed, AdC.

But what else can we do to make coop living viable?

Back to a Shareholders' Bill of Rights, consider this potentially useful provision:

"All financial records of the corporation will be open for inspection by shareholders."

That would've knocked out quite a bit of chicanery in my building, and in many others I can think of, in a way that just the vague, aggregate annual fiancials could not. Moreover, the very fact open records would scare off the crooks.

Is there a downside? Possibly a few owners in trouble, or in arrears, wouldn't appreciate such info becoming public. But I can't think of another downside. Can you?

--Distressed

It may sound vulgar, but to me sounds like "toilet paper." You'll be surprised the amounts of people who buy in co-ops and have no idea that they are partakers of the building soundness (financial, etc.)

Some of our shareholders think that our management is our landlord. So, what is the use of BILL OF RIGHTS when they have no idea what they own.

Sorry... BILL OF RIGHTS is another paper that looks that the NYTimes motto.

AdC

Sorry, AdC, am not quite so cynical as that.

Good, enforceable laws often work well enough, here in the U.S. anyway.

What's clear to me is that coops were, legislatively and legally, set up in an enormous hurry, with too little thought to later governance. Too bad we didn't have any modern James Madisons around back then.

But if coops are going to survive, they are going to be forced to improve.

I can see how a Bill of Rights might be useful, but I agree with AdC that it serves little purpose if Shs don't know what they own or how they fit into the coop picture.

I'm for a Bill of Responsibilities. People buy into a coop and say they understand what it is, but they don't have a clue. They do what they want and don't even consider that board approval may be needed first. They're all for rules and standards, but they're the last ones to uphold them. They think the coop should fix (and pay for) everything in their apt, from spackling a "mistake" hole when they hung a picture to stopping their floors from creaking. They want access to all coop financial documents, but they don't know what "accounts payable" means when the annual statement is reviewed at the annual meeting. They expect the super to do whatever they want him to do, but they don't want him to tell them they can't smoke in the stairwell or keep their bikes in the hall outside their apt. Naturally, this isn't true of all Shs...but enough. If it becomes a matter of too many, it could be the downfall of coops (in my opinion).

Boards, staff and mgmt need "education." So do Shs. Coops should have a manual with sections on all topics that tell Shs everything they should know about their coop, including what a coop is, bldg procedures, corporation policies, fees and charges, who's responsible for what, House Rules, etc. and master copies of forms like alteration agreements and sublet applications. We've had one for years and make sure every new Sh gets it. It answers many questions, saves mgmt and board members time having to explain something to Shs, and eliminated Sh excuses like "I didn't know I had to do that" or "No one ever told me that's a coop policy" or "I called the property agent but he wasn't in." Feeble excuses aren't accepted because all Shs have a manual and one of their RESPONSIBILITIES is to refer to it.

You'd expect a 30-yr-old who just "bought" his first apt not to know much about coops, but it's surprising how many 50-yr-olds don't either - and how many Shs who've lived in a coop for years still don't get it, don't want to or don't gripe about maintaining standards or enforcing rules unless it's expected of them.

Shs have rights, but with rights, benefits and advantages come responsibilities. At least, they should.

It is easy to say that good people should get involved but there is one thing you left out they have to be elected and many have tried but the corrupt and incompetent get elected because they have the votes and people do not listen when you try to explain things to them especially when you question the accountant and he says no and who are you - well you can't have corruption without the accountant -

Thank you for putting it as clearly as that!

New shareholders (and specially those who come from rentals and never have owned anything) would like to be treated as owners on one hand and have the full benefits of a rental unit. Individuals whose educations go beyond a bachelor degree all of the sudden lose the capacity to read and comprehend. The idea that they have responsibilities for their common ownership does not cross their brains.

Right now the co-op in which I live has over 65% new shareholders since 2003. The whole process of training has to be rekindled. This is a never-ending process. Board need to be atuned to this too.

AdC

We created a small (5.5"x8.5") manual that we give to all new Shareholders (also distributed to Tenants and existing Shs). It's a summary of the PL, in plainer English, and covers everything from renovations to pets.

I recommend it highly.

How could I get one. We would meed it too so badly...

I created ours for the co-op. I'm in the communications business, so it was a snap... but really, anyone who's capable of clear writing can do it.

Just start with your PL, outline what areas need to be covered (sublets, pets, noise, repairs, renovations, etc.), and what your PL says about them.

Paraphrase these rules in plain English. You might want to run the finished version past your managing agent or attorney to be sure it's both clear and accurate.

RLM's idea of a SHs' manual that puts the PL in simplified language is a good idea. I did one for our coop. Ours is a composite of manuals I saw in other bldgs. Along with PL info, ours contains all coop policies the board's enacted, other key info not in the PL, a copy of our house rules, and our alteration agreement and sublet applications so SHs can photocopy them as needed.

When we send a letter to SHs about a new or revised policy, new fee, etc. we state at the end of the letter (in caps + boldfaced) that it should be inserted in Section X of the manual. This way the manual is always current. Our mgmt office also keeps a "Master Manual" with all such letters attached to it so we can give SHs who need another manual if they misplace theirs, or new SHs, one that's completely up to date.

Our manual is a 3-ring binder with tabbed sections and a TofC so SHs can find things easily. Our sections are:
Introduction
Apt Facts (sq ftage, shares, rooms, etc. for all apt lines)
Apt Use & Maintenance
Apt Improvements & Renovations
Apt Sales
Building Staff
Charges, Fees & Fines
Common Building Areas
Complaints & Reporting Issues
House Rules
Moves & Deliveries
Recycling & Trash
Repairs
Subletting
General Information (a page with phone #s for mgmt, super, etc. and a couple blank pages where SHs can write notes, phone #s for other SHs or whatever they want)

Never occurred to us to list the square footage/rooms for each line... seems as though that would be good information to include, though. (The rest of our info is there... and in only 12 booklet-size pages - quite handy.)

How did you figure the square footage? -- realtor's numbers or actual measurements? Our building's old enough, we don't have original architect's drawings; perhaps yours is younger and they're still on file?

We figured sq footage based on actual measurements and we noted this on the page in our manual. Realtors' numbers vary too widely and we didn't want to have a realtor number misinterpreted by SHs as something written in stone just because it might be in our manual.

I'm glad you did it accurately. There are such inflated numbers out there... both "rounded up" and "created". Better that your Shareholders be able to trust your information.

I agree completely - got any ideas there are many many too many coops in the same condition as ours - some know it some do not but the frequency and amount of theft is massive - some people do not want to acknowledge it is in their building -I know some very rich people in Forest Hills and they know what is going on but will not say anything