How Shareholders at a Queens Co-op Reclaimed Their Turf

After the group retained Hankin, he got to work reviewing the co-op's bylaws, while Profita tried to find answers of her own.

If You Can't Beat 'Em, Join 'Em

Profita already knew about some of the co-op's issues. The four boilers were constantly breaking down. The two-story buildings had minimal insulation. There were chronic window leaks.

Central control of the heat meant shareholders had no way of regulating the temperature inside their apartments; some were hot, some were warm, some were cold.

Banks were reluctant to lend to shareholders or potential buyers because of the co-op's wobbly financial condition.

Profita created a spreadsheet detailing the history of assessments and maintenance increases. But when she took it to the seven-member board to get an explanation, "they said there was no explanation except that 80 percent of the costs are set in stone," Profita says.

"They also said that as a shareholder I had no right to look at the books. So I decided that the only way to find out what was going on was to run for the board."

Profita and two equally disaffected shareholders ran for the board at the annual meeting in 2012, and appeared to win three seats. When the board declared that all seven incumbents had won re-election, Profita and her group told Hankin to demand a recount, which proved they had won.

But the only way to force the incumbent board to admit that Profita's group had won was to mount a lawsuit, a costly undertaking with no guaranteed results. The group decided to come back and fight another day.

The Lawyer's Discovery

After the contentious election, Hankin discovered the board was allowing the sponsor to vote his shares not only for the three board seats he was entitled to, but for a fourth seat as well, which gave them a guaranteed majority on the board. The group let the board know it was a clear violation of the bylaws.

At the next election, in fall 2013, Profita ran again with six fellow dissidents. This time, without the chicanery, Profita and her fellow dissidents swept all seven seats. The group has quite a task ahead of them as they work to turn things around.

Adapted from "We Took Back Our Building" by Bill Morris (Habitat, December 2014)

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