If No One Steps Up, a Co-op Will Go Down
Jan. 3, 2019 — What if they called a board meeting and nobody came?
The board and the management at a 10-unit East Village co-op are deeply dysfunctional – so much so that the managing agent has announced he won’t be back when the current contract expires, and the board president, who owns three rent-stabilized apartments in the building, is quitting the board. None of the remaining shareholders is willing to step up and serve. Can this co-op survive?
Everyone who bought into this troubled co-op is “a shareholder in a very small corporation,” attorney Beatrice Lesser, a partner at Gallet Dreyer & Berkey, tells the Ask Real Estate column in the New York Times. “You guys are very close to the edge. Not everybody is cut out for these responsibilities.”
But every co-op needs somebody to run it. The job usually goes to a managing agent, who collects monthly maintenance and pays pesky little expenses like the mortgage, insurance, taxes, heat, and water. Managing agents also supervise the staff, if the building has one. Smaller, self-managed buildings often delegate these chores to shareholders. But again, somebody’s got to run things. Otherwise, at the most fundamental level, the building ceases to function, and if that happens, the shareholders lose their investments.
If no one wants to join the board, shareholders could hire someone to be an officer of the co-op, depending on the bylaws, Lesser says. That person could either serve as managing agent or find someone to take the job. However, small buildings often have trouble finding property managers, so shareholders may have no choice but to get involved.
There is hope. New Yorkers with no prior experience join co-op boards and run them well. There are resources that can boost on-the-job learning. Fledgling board members can seek advice from board members of successful small co-ops, and the Times even suggests reading Habitat magazine in print and online, which is excellent advice. In the end, there’s a distinct upside to stepping up: you’ll get the chance to save your co-op and, in the process, your investment.