The interest rate varies from state to state. Refer to this chart (cut and paste into browser) http://statelaws.findlaw.com/consumer-laws/interest-rates.html
In New York it is 16% and yes, it is based on the number of days owing. Here is simple calculator using an example of $1,500 owing at 16% for 5 days overdue. Interest amount = $3.20 for those 5 days http://www.calculatorsoup.com/calculators/financial/simple-interest-calculator.php

Our coop has a 15 day grace period. Therefore, if you pay on the 16th (due to a holiday weekend), are you one day late or 16 days late? In such a case should they charge you the late fee for one day?

If you have a 15 day grace period, then no interest is paid if the payment is made WITHIN the 15 days. If they did not pay until day 16, then they owe the interest from day 1 so they owe 16 days of interest, not 1, regardless of it being a holiday weekend.

Normally in a situation like this, we ask for two things in the alteration application for board / management review.

1) The length of time of the proposed alterations
2) The certificates of insurance of the contractors involved

If the project started late, the management company should have reviewed the C of I prior to work starting to ensure that there would be no lapse in coverage during the estimated time of completion.

If the project started on time but their insurance was set to lapse shortly thereafter, management should have requested the updated Certificate prior to allowing them to continue the day after their certificate expired.

Keeping track of these insurance policies is a very important aspect of the management position and if allowed to expire, they create a potential liability and insurance issue for any damage or injury that is sustained.

There's a difference between expiry and cancellation.

If the coverage expired before the anticipated completion date, it is up to the shareholder as much as managing agent to make sure the coverage is renewed before the expiration date. Otherwise all work must be halted until valid coverage is reinstated.

If the coverage was cancelled or voided by the contractor before or during the job without notifying the shareholder or the MA, there is probably fraud and the contractor needs to be reported to whichever City agency licenses contractors. Neither shareholders nor managing agents are notified of a change in coverage status, so it is not a lapse on the part of either party.

If the coverage was voided and then there was a subsequent claim, the shareholder, co-op, and managing agent probably have a good defense. Each should hire their own attorney.

Hello westsidegirl;

Unfortunately, unless the By-laws of your cooperative corporation have specific language regarding cause for removal of board members, short of
the member resigning, there would be no way for fellow board members to have her unseated.

While I do not know what your By-laws say regarding misconduct by board members, some By-laws require a majority vote of shareholders to remove a board member, and some do provide for removal by the other board members. You would need to review the By-laws of the corporation to find out.

Hello westsidegirl;

Unfortunately, unless the By-laws of your cooperative corporation have specific language regarding cause for removal of board members, short of
the member resigning, there would be no way for fellow board members to have her unseated.

While I do not know what your By-laws say regarding misconduct by board members, some By-laws require a majority vote of shareholders to remove a board member, and some do provide for removal by the other board members. You would need to review the By-laws of the corporation to find out.

thank-you,,read the by-laws and a majority vote of shareholders is needed..

Good morning;

If the occupancy agreement states the apartment cannot be used for commercial space, then based only on face value of the information you are providing, the answer would be that an office would not be permitted. According to the NYC Building Department's website, www1.nyc.gov the definition of commercial space includes offices.

However, there may be extenuating circumstances, and if the issue is significant enough for your to explore, then a visit to the Building Department may be your best bet because depending on what area of
New York City your are located in (C1-C8), and taking into account that it appears certain areas do allow commercial space if "located beneath residential space" as stated on that website, then one of two things may be the case;

1) The occupancy agreement could be in contrast to what the Building Code permits and you may be able to apply for a variance based on the fact that in the hierarchy of governing bodies, the local laws prevail over the governing documents of a building.
2) The occupancy agreement could be in accordance with the local laws and there may be certain exceptions in which a variance may be granted;
for example, the office will be used as the building's business office, etc.

Please keep in mind that if you are successful in your endeavor to create an office which provides services to non-residents, certain handicap accommodations which may require design changes to the common areas of the building may be required. Best of luck.

Thanks for the info. It was very helpful.

Why do Managing agents nickle and dime? Last one we hired we rarely ever see anymore. Does nothing. Our board does RFPs, we then give it to him for logistics, our board negotiates with insurer and we handle own tax grievances. It is a small building so really need bill pay and someone to be on call for owner issues and walk property.

We interviewed someone new and right away he can bring an engineer for reserve studies, prepare buyer package for fees, bring in his own folks electricians, plumpers etc and gardners. Then to make matters worse he says I can advise you on ways to raise fees.

I am looking at him like we have our own lawyer, own CPA, own gardener, own handiman, own insurance broker, own snow removal service. We want someone to over see it and if you can find better folks for same price or less give us some advice. Instead he was talking about raising maint. Then he said he could approve renters for a fee and track renters and we could charge a fee.

Only folks renting are folks in a nursing home, job out of state or underwater on mortgage and had to buy a house.

I felt he did not know building and in end we said honestly we never want to talk to you. That is what we are paying you for. Just do the job.

last guy was not happy with his fee for doing it as he cant get extra money referring friends. For example he said he could cut down curbside trees, he knows a guy, I called town they did it for free. He could do our tax grievance for a fee, board hired guy for no fee, owners pay if they want to do it directly at a low rate.

Hey CondoGuy1, I can certainly understand some frustration on your part and since I'm not in the shoes of either you or your managing agent, I can only speak from my experience.

If a Board is finding that they are doing the work that they contracted with an agent for, then something is wrong. The Board is a volunteer position and since agents are compensated contractors, in effect, they should be doing the heavy lifting and the bulk majority of the work. There are times that board members have a specialized skill or interest and can add a lot of value by contributing their time, resources and connections, but on a normal basis, this should not be the operational default.

In standard management contracts (not sure which state you're in) there is a Exhibit that shows the different fees over and above the management fee. These can include costs to the homeowners for sales applications, lease applications, bank questionnaires, etc. These are extra frees but they are all laid out. You should have a look at the management contract to see if these do exist. If they don't exist, you can speak with the Board to see how they are charging these without a written agreement.

You also mentioned that the agent is always looking to outsource and spend funds on items that may be free (i.e. the tree removal) while raising your monthly dues as a result of the offset in operating expenses. We're in this business knowing that the fee is the fee and all of the previously approved ancillary charges will be there on the income side, but we're not in the business of referring people out and collecting a bounty for doing so. In some parts of the country those kickbacks are very illegal, including here in NYC.

Your satisfaction could be as simple as changing to another agent that treats your property the same as their own. Mindset is half the game. It's easy to spend someone else's money. It takes great professionalism and common courtesy to work as hard as can be to save you those two cents; over and over again. They really do add up.

Hello CondoGuy1;

Based on your e-mail it appears your board may be taking on too much, and while I am not privy to the language in your management contract, I question why your board is creating RFPs, negotiating with insurers and handling your own tax grievances. I am also concerned about the qualifications of your board to engage in these tasks. I have close to thirty years experience in the industry, consult for self managed and professionally managed properties and have an informational website for board members, and may I tell you that RFPs if written for the express purpose of what they are designed to do have some very technical language, consist of many pages in some cases, have reference to mediation standards, industry standards, and are the corner stone of a good contract. The RFPs I have written are very substantial tools.

Insurance policies are underwritten, sometimes even manuscripted and placed in the commercial market for pricing by your insurance broker or risk manager, in this regard, I am not sure how or why your board is negotiating directly with insurance companies, as they only discuss underwriting and premium with licensed insurance brokers.

The tax grievances should be handled by a certiorari attorney who would then be compensated based on a predetermined percentage which is determined by how much he saves your building community.

I believe this brief forum may not have afforded you the opportunity to fully represent the dynamics of your board's role and relationship with the property manager and how your particular management contract effects this whole situation.

If you would like, you can e-mail me directly or respond back on this board, and I will try to get a better idea of what is happening in your situation.

In summary, most management companies do not ordinarily try to extract fees for work that is included in their contract, but your situation appears to have a little more going on. Let's discuss it.

Our insurance broker pre-dates our managing agent. I caught our managing agent just paying bills, so I beat up on agent, make them get quotes, question coverage. I also go around agent to get quotes and see who will quote. I am ok with the Managing agent also doing it. But I am keeping both insurance agent and managing agent honest.

Same with RFPs, managing agent can do them but if it is big ticket we do our own due dilergence. Sometimes agent is right sometimes not.

The board also directly hired the tax lawyer. Got a law firm that never does small buildings, did ours at a big discount and agreed to collect individually from unit owners. My managing agent wanted a fee to manage process, then we pay lawyers directly then refund owners. That is putting our money at risk. The buildings lawyer and CPA also report to the board. Buildings lawyer is a different one from Tax lawyer

We never hire friends or family, always beat up anyone we hire, no conflicts of interest. We really just want a managing agent to manage building not to talk to us or hold hands.

My building has never had an assessment in history of building and has good reserves. We are interviewing managing agents right now and they almost all have projects they want to do, folks to hire, ways to raise fees, maint etc.

There is a lot of add on services I notice, when we say we have no interest in most if they cost extra they seem to lose interest.

Good morning CondoGuy1:

As I have not formerly introduced myself, as the instructions for this forum request, my name is Margaret Bernato, I own and operate the website askthepropertymanager.com. We are a website predominantly geared to boards that prefer to self manage their buildings or communities but do require advice from time to time regarding best practices about certain matters that they choose to inquire about as opposed to working with a management company, thus avoiding the types of relationships which your post suggests you do not want, and of course saving money on the management contract fee.

Most management companies are professional, dedicated and committed to providing a satisfying client experience, however, if your whole board embraces the same philosophy that you do, your board would probably be best served self managing the building and not having a property manager.

In this regard, your building would probably need a maintenance manager or "Super" super with good organizational and mechanical skills, and your own bookkeeper or bookkeeping service, the latter of which your accountant could help you decide.

I wish your board much success as you interview companies, and possibly consider self management. Please let me know if you have any further inquiries.

In some Coops you only get voted onto a board at the meeting and the board itself elects officers. The President should not also be Treasurer. But if only two people offered to be officers than one person wears two hats. My board of 5 we have three members who refused to be an officers. We have a President, Treasurer and appointed someone from Management company Assistant Secretary to take notes at meetings which whole board approves.

Honestly, if you asked that question at a meeting I would first ask do you want to run to be on the board. If you said now I would then ask you to contact me or management company after meeting. You accused the President of fraud at an open meeting. It may or may not be true but that i not the forum. My board is completely honest and work had and half the board on a regular basis wants to quit as it is a ton of work and they would like to free-ride like the owners not on the board.

i am more than happy to create sub-committees. For instance we picked a new landscaper, did an RFP, interviewed them all, checked insurance went to other buildings they did and got references. One person was even questioning that. We quickly brought up we are going to do same process for snow renewal contract would you like to be in charge. They said no thanks. The rest of crowd rolled their eyes.

I never accused anyone of fraud. I inquired because that was the RUMOR. As far as forums go the only opportunity to speak with board members is at the shareholders annual meeting.

I never accused anyone of fraud. I inquired because that was the RUMOR. As far as forums go the only opportunity to speak with board members is at the shareholders annual meeting.

My coop has annual elections, since no one wants to run, usually the current board gets re-elected. After the election, the board decides who will hold which position. In the event a board member resigns or sells and moves, the board may appoint a temporary member until the next election, depending on how soon the next election will be. In NY State, the Department of State requires an annual corporation registration, available on line here: http://www.dos.ny.gov/corps/bus_entity_search.html
and it should show minimal data for your coop corporation. The coop bylaws should provide information on board structure, it should state the size and it may state whether or not a member can hold more than one position, or there may be some restrictions. If you want to see changes happen or see how the board runs, run for the board.

A Flip Tax also known as a Transfer Fee brings money into the building and is certainly better than an increase in maintenance. There is a % that a board can choose. An assessment is basically for a longer term project that generally expires in approximately 1 to 2 years to pay for a particular project. What I have experienced so far is my understanding.

We charge a flat $500 flip tax on sales to add a few dollars to the reserves each year. We have been doing an assessment annually, approximating the annual coop abatements/star/senior/vet credits granted by the city and state. It helps keep the maintenance down without taking extra money out of everyone's pockets.

Instead of a $500.00 flip tax there should be a % which would most likely bring in more revenue to the building. What is the reason for doing an assessment annually? That's a little much. I agree in keeping maintenance down, but doing annual assessments is almost the same thing as maintenance increases, as far as I can see. We have a 1% Transfer Fee on a sale, some buildings have a 2% which can be paid by the seller or broker or split between both. The % is the % of the sale price. If you sell an apartment for $400,000, the Fee coming to the building would be $4000.00. That's better than a flat fee of $500.00. What do you think?

Do most buildings exempt both or either sponsor owned units when the sponsor sells that unit and/or original shareholders (commonly called insiders) of the flip tax? If yes, can the 'rule' be changed to now charge them?

Generally, the prospectus allows the sponsor to transfer shares to a buyer without incurring any fees from the coop corporation. So, they are basically exempt from paying it. You could still charge the flip tax and collect it from the buyer. Nothing says the tax must be paid by the seller.

Thank you. Understand about the sponsor. What about original shareholders who brought during the 'red herring' period? Commonly called insiders, as they rented in the building prior to the conversion to coop status. Can they be required to pay the flip tax as well?

Maintenance: A co-op's mandated, continuous, and predictable source of income. Used to pay a buildings operating expenses.

General Assessment: A co-op's mandated but time-period-limited source of income. Usually established for a set period of months and used to pay for a co-op's one-time expenses like capital improvements and repairs.

R/E Tax Abatement Assessment: A procedure used by co-ops to offset the R/E tax abatement the Dept of Finance grants directly to shareholders. The abatement reduces the amount of annual R/E tax the co-op owes, but since the money saved by the abatement is supposed to be passed through by the co-op directly to shareholders, the co-op never sees any direct benefit from the abatement. The R/E Tax Abatement Assessment is usually enacted each year by co-ops and is calculated to be the same amount as the abatement. Thus the net effect of the abatement on the co-op's operating income is negligible.

Transfer "Flip" Tax: A fee imposed by a co-op on the transfer of its shares from seller to purchaser. It can be an absolute fixed amount, a fixed amount per share, a percentage of the purchase price, a percentage of the net sales income, or any other calculation based on the transaction. Transfer Tax should be used to "top off" capital reserve accounts. It should never be relied on when calculating a budget or predicting annual income, because it is completely unpredictable. If there are no sales during a year, there's no additional income.

Bottom line: Each source of income serves a different purpose and in most circumstances they are not interchangeable. In governing a co-op, income predictability is paramount and the different revenue streams should be relied on accordingly.

Hello BBCA;

Higher maintenance is a somewhat permanent condition, and is not a competitive re-sale feature.

A one month assessment can be less of a deterrent to buyers,especially if they missed the assessment. However, if the one month assessment is an annual event, and is a 100% increase or more over the base maintenance charge, this could also be a negative re-sale feature.

The expense of the flip tax on the other hand, can always be negotiated between the buyer and the seller to accommodate the dynamics of the deal.

In summary, my recommendation would be for the board to impose a one month assessment if it is less than 100% above the base maintenance fee and to revisit the matter each year for potential change in the policy based on need, or surplus. The second, less desirable choice would be the flip tax. Raising the maintenance fees should be avoided if at all possible.

Hello BBCA;

Higher maintenance is a somewhat permanent condition, and is not a competitive re-sale feature.

A one month assessment can be less of a deterrent to buyers,especially if they missed the assessment. However, if the one month assessment is an annual event, and is a 100% increase or more over the base maintenance charge, this could also be a negative re-sale feature.

The expense of the flip tax on the other hand, can always be negotiated between the buyer and the seller to accommodate the dynamics of the deal.

In summary, my recommendation would be for the board to impose a one month assessment if it is less than 100% above the base maintenance fee and to revisit the matter each year for potential change in the policy based on need, or surplus. The second, less desirable choice would be the flip tax. Raising the maintenance fees should be avoided if at all possible.

Hello BBCA;

Higher maintenance is a somewhat permanent condition, and is not a competitive re-sale feature.

A one month assessment can be less of a deterrent to buyers,especially if they missed the assessment. However, if the one month assessment is an annual event, and is a 100% increase or more over the base maintenance charge, this could also be a negative re-sale feature.

The expense of the flip tax on the other hand, can always be negotiated between the buyer and the seller to accommodate the dynamics of the deal.

In summary, my recommendation would be for the board to impose a one month assessment if it is less than 100% above the base maintenance fee and to revisit the matter each year for potential change in the policy based on need, or surplus. The second, less desirable choice would be the flip tax. Raising the maintenance fees should be avoided if at all possible.

Hello BBCA;

Higher maintenance is a somewhat permanent condition, and is not a competitive re-sale feature.

A one month assessment can be less of a deterrent to buyers,especially if they missed the assessment. However, if the one month assessment is an annual event, and is a 100% increase or more over the base maintenance charge, this could also be a negative re-sale feature.

The expense of the flip tax on the other hand, can always be negotiated between the buyer and the seller to accommodate the dynamics of the deal.

In summary, my recommendation would be for the board to impose a one month assessment if it is less than 100% above the base maintenance fee and to revisit the matter each year for potential change in the policy based on need, or surplus. The second, less desirable choice would be the flip tax. Raising the maintenance fees should be avoided if at all possible.

My coop imposed a 3 percent flip tax paid by the seller. The board did this to raise revenue and the results were unsatisfactory. No one wanted their maintenance to go up so the flip tax was the only way to raise revenue. It was irregular and inefficient, the buildings fell into disrepair. In order to rectify the situation 2 assessments were made permanent and a 14 percent maintenance increase on top of that. Needless to say I am not a fan of flip tax for needed revenue.