Before the Annual Meeting, Use a One-on-One Approach to Get Things Passed
Jeffrey Dryfoos, Board President
June 11, 2013 — The co-op board of our 118-unit building at 242 East 19th Street in Manhattan tried to change our bylaws for indemnification purposes one year and failed miserably. What we learned was that even though we think of ourselves as a tight-knit community, when it comes to the annual meeting, most shareholders' agenda is usually to get out of the meeting as quickly as possible. They want to hear that their corporate structure is sound and that their investment and their shares in the co-op are increasing in value or at least holding their own. And so though we approached our shareholders with a tremendous amount of reasoning about why we wanted to be indemnified as a board, we did it at the annual meeting at the end of all of our regular business, and no one really wanted to sit around and listen or take part. We came up very, very short after the vote was taken.
The next year, the board got into a discussion before the annual meeting about changing the amount of money we charged for our flip tax. We wanted to go from a fraction of a percent to 1.5 percent.
As a result, we were able
to get 85 or 90 percent
of the shares to vote in
favor of an increased flip tax.
But we learned from what had happened the year before. What we did differently was we divided the building into two sectors, and weeks before the meeting, we had co-op board members go out and talk to their friends one-on-one about why we wanted to increase the flip tax, what it meant to the building and what we could expect to see on a regular basis in new money. And the rationale was, "Look, if you are not going to move, this isn't going to affect you. But if you are moving, it's just one more fee that you are paying in all of the costs that you are involved with for selling an apartment and buying a new apartment," and everyone knew that.
We also went around, knocking on doors, sort of like glad-handing one-to-one. As a result, we were able to get 85 or 90 percent of the shares to vote in favor of an increased flip tax.
You have to remember, any good co-op or condominium is a community, and while there may not be a lot of social interaction between different people in the building, that's not always the case. We have a good deal of it. There are people who have meals out together and who get together and have a drink in different people's apartments. It's not just business.
So we work that as a conduit for change, which then, of course, brings back the mindset that maybe, just maybe, what we should do is revisit the indemnification revision that we failed to pass so miserably the year before.
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