Hi, Distressed,

The civil way is usually the best way to go unless you have dangerous problems.

On your other point, that co-ops are a dicey investment, I agree only partly. Like any corporation, investing in a business with others in control is never a guaranteed win-win. Just look at Enron as the worst of the worst examples, and there are plenty of other examples of corporate mischief across all sorts of businesses. Co-ops are just one example.

Why do co-op values tend to be lower than condo values? In NYC, at least, when you buy a condo you (typically) pay off your portion of the corporation's mortgage; when all the apartments are owned, there is no underlying mortgage which increases the value. In a co-op, you're typically buying only your apartment; the corporation pays the mortgage out of your maintenance fee. With an underlying mortgage, the apartment is not worth as much.

Lots of other variables, of course, but the most basic is the amount of equity in the property.

All that said, there are good co-ops out there, with honest board members. The problem is that it's nearly impossible to find out which is which until it's too late.

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All good points, Steve.

We could surely use a more transparent system for coop purchase. When I think back to mine, there's no way I would've been able to discover what was going on here. In fact, it took some years on the board, and digging t to find out.

I am still thinking of a sort of independent rating system. The residents of coops that failed or got low marks would feel suddenly inspired to help the place improve. AdC is right in a sense that it takes active -- and perhaps he/she lives in a coop of smart, involved, civic-minded people -- but what's happening here is that people seem to be surreptiously fleeing. Not how I want it to work.

Distressed

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I did not expect to respond to another of this types of messages; however, your comments provoke some thoughts:

"Coops are a failed structure, in my opinion. The proof? No one dares create any more of them."

First, I agree with you; yet, they are a MIRACLE since they still continue to exist in spite of the turmoil of the late 80's and early 90's AND in spite of the "fallen human nature" seem to reside in such multiresidential forms of ownership. Consequently, co-ops are not are not failed structures. The fact that they don't work in your case or my case, does not mean that they should be banned from the face of this earth. Otherwise, we may also call for the doom of democracy as such.

I believe the great problem is the Admissions Committee and the form it screens and selects residents. Perhaps too similar to each member after the financial test has been passed.

Thus, I propose hiring an INDEPENDENT PSYCHOLOGIST to administer a "COMPTENCE TEST" for potential shareholders. What are the traits expected after your PL has been modified to demand that shareholders are appointed without being able to refuse the appointment:

1. 100% Honesty and ethical behavior on the part of each shareholder.

2. Second component:

a. 15% of shareholders must show STRONG LEADERSHIP.
b. 40% Must be followers. These will push the agenda of the leaders.
c. 30% Highly detailed individuals. These will scrutinize the leaders and followers.
d. 15% HIghly empathetic individuals. These will advocate for indidivual rights of shareholders.

Once you have the ideal mix of shareholders, you may start having good boards that will do and take care of their fiduciary responsibilities.

Sorry to inject some fun, but I can only believe that the whole thing starts with ME and those whom I think are worthy to be called MY NEIGHBORS.

AdC

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