*Usually*, a renovation begins with the signing of an alteration agreement. This is so the board and shareholder start out on the same page and the shareholder formally is made aware of the board's requirements and limitations for the renovation. From this point forward the renovation is governed by the terms of the alteration agreement and other policies in place.

*Sometimes*, with a very extensive renovation that can impact building services or the structure itself, an informal drawing or description is submitted ahead of the agreement, to make sure the board is okay with the work to be done before any more time and effort are spent.

The board can exercise its discretion, provided the board is mindful of its mandated responsibility for fairness and impartiality when making decisions.

Have they provided a reason for this behavior or have you or anyone else asked a board member for the reason behind this odd behavior?

I think in their heads it’s making money for the co-op but to me with all the added cost especially if you have to repair a unit to sell or buy it doesn’t add up. It’s making everyone rich on each sell right? Lawyer, agent etc.

So you find it odd too?

To me once in a blue mood a co-op has an opportunity to buy a unit but I also find it odd is if you want to raise the maintenance and talk about the economy etc to shareholders but yet we have enough money to buy units? Doesn’t make sense.

Almost sounds like a money-laundering scheme to me. If there's a large difference between a unit's purchase price and its selling price without any obvious reason for the difference, it could be a way of washing money or funneling money to the putative owner of the unit.

It could also be a way of goosing up the unit's price for comparable checks or loan collateral. This happened a lot during the 2008/2009 real estate market meltdown. Units would flip-flop between the same two owners, but each time the price would go up. Then it could be used as collateral for larger mortgages and other real estate-backed loans.

If you can, try to find out more about these transactions or speak to your co-op's attorney

Does your co-op own any units that they rent out and possibly sell at times when funds are needed?

That's an interesting question, Pooh. It it turns out to be true, it exposes the board to a whole new level pain - abrogation of the board's fiduciary responsibility to the shareholders.

Imagine a board needing to tell shareholders that an apartment the co-op bought for $500k is now worth only $400k when it needs to be sold to raise a large amount of cash.

Yes, if both the buyer and seller agree to it in their contract. There is usually a specific date mentioned in the contract when the seller must leave.

I’ve seen contracts where the buyer gives the seller a few weeks to stay so the seller can tie up loose ends.

When I’ve seen this situation invoked, the seller must leave by the end of the month, making it nice and neat for the buyer to take over the apartment on the 1st of the month.

I’ve never seen a Board reject this type of agreement.

Thank You Marty, that is great to know. : -)

Try Googling "SHARC technology". I'm sure you'll find the greatest amount of information available.

Thanks, Steven424, Will Do.. :-)

You piqued my curiosity, so I looked up SHARC Technology. If you want my opinion, I think it would be a complete waste of resources to install a unit that does nothing more than recover heat from a building's wastewater. Most buildings today do not generate sufficient wastewater at a large enough thermal differential to justify the return on investment.

Here's an article I found https://highmark.co/technologies/sharc-wastewater-energy-recovery/ Your mileage may vary.

You should consider consulting a California attorney who specializes in CA co-op law, rules, and regulations. Most of the contributors on this board are familiar with NYC co-ops, and I'm pretty sure this is little to no commonality between CA and NYC co-op rules and regulations.

My best and only advice is that you not do anything except bring the matter to the attention of the co-op's attorney and be guided by what they tell you. The few dollars you may save by trying to do this yourself could mushroom by orders of magnitude if you don't proceed to the exact letter of the law. My wife was a Trust and Estates attorney and you would not believe the levels of detail and complexity in dealing with something like this.

Good luck

What ever happened to the unsold shares?
We own co-ops throughout the City and would be interested buyers if they're available for sale. lf you would like to discuss email me @ stevenduck88@gmail.com
All the best!

I agree with Steven that consulting an attorney is *mandatory* here. Unsold Shares are one of the most complex and contentious areas of co-op law, with significant changes in interpretation over the years.

One point which I don't believe has ever changed (but confirm with your attorney): if the shareholder has lived in the apartment for even a day, then they are no longer a Holder of Unsold Shares and cannot regain that status.

- Carl Tait

Quick question. Where do you think the co-op's management would get the funds to replace fuse boxes with circuit breakers throughout the entire building?

Quick answer: Shareholder maintenance increase or assessment

It's much more financially fair to all shareholders that each unit owner be responsible for replacing their fusebox only. Over the years individual shareholders may have added additional electrical capacity to their fusebox or made other changes resulting in a more complex replacement and higher individual replacement cost.

If you read your proprietary lease, there should be a section that states you purchased your unit "as is" and become responsible for all defects extending back to when the Offering Plan was approved. I think it's paragraph 18 in most standard PL's

Our Coop did the same it's an upgrade from the old glass fuses to breakers. Cooperators should not be significantly upgraded without Board and Management approvals to increase electrical capacities. This is to ensure code compliance and safety measures. It would be on your proprietary lease, or house rules

Hi, your Proprietary Lease (PL) should have a section called Repairs by Lessee which spells out the responsibility of the Shareholder and the corporation with regards to repairs.

Traditionally, all electric wiring and service, once it enters into your unit is the Shareholder responsibility. We do this replacement of Federal Pacific / STABLOK breakers that are a fire hazard and the shareholder is always responsible for the payment, as per the PL.

We have applicants who bought a co-op of three hundred thousand, and the board refused to interview the people who would put in a trust fund. The daughter paid all cash for the apartment for the parents.

There is a whole list of purchaser characteristics known as "Protected Classes" which prevent boards from denying the sale of an apartment. Some better-known Protected Classes are race, religion, sexual orientation, age, handicap, etc. If a purchaser falls into any one of these classes and their application is denied, they can sue for discrimination.

This leaves a very limited list of reasons a purchase can be denied. The most common one is the purchaser's financials. Lesser known reasons are diplomatic immunity or status, firearm ownership, disallowed pets, etc.

It is for this reason that all board members and anyone involved in the purchase review should never have *any* contact with a purchaser, ever. The financials must be reviewed and approved before the interview is scheduled, otherwise, the board leaves itself open to a discrimination suit for the briefest of encounters.

Putting shares into a trust is an entirely different situation. It's much more legally complicated than simply titling the shares in the name of the trust. The board needs to pass a resolution allowing shares be held in a trust, and a lot of ancillary issues worked out and agreed upon before the formal transfer takes place (who's allowed to live in the apartment, who is responsible for maintenance and assessment payment, who are noise and other complaints directed to and notices served upon, etc)

The co-op may not allow shares to be held in a trust, which is why they refused to interview the purchasers. The board knew they would reject the sale and did not want to allow a situation where the board could be accused of discrimination if any of the protected class characteristics were obvious at the interview.

From this point, the only communication should be through the attorneys. And since I AM NOT AN ATTORNEY, this advice is worth what you're paying for it. ;-)

As usual, Steven424's answer is excellent. I do have to disagree with one sentence, though: "This leaves a very limited list of reasons a purchase can be denied." It's just the opposite: there's a "very limited list of reasons" for which you *cannot* deny a purchase. It is perfectly legal - though idiotic and infuriating - for a board to deny an application for a ridiculous reason. Left-handed? Enjoys Beethoven? Has the same name as a board member and you don't want mail getting confused? (I've read that this has actually happened.) None of those are protected classes, so there's no legal hurdle. But of course it would be hideously inadvisable and misguided to do so, and your coop would get a terrible reputation.

In practice, rejections are *overwhelmingly* for financial reasons. A poor credit report would certainly fall into that category. The runner-up reason would be the proposed use for the apartment. "I plan to practice flamenco dancing for approximately 16 hours per day."

And to repeat Steve's important point: do not have *any* contact with the prospective purchaser(s) before the interview. Make your decision based on the application and associated documents, then after you've decided to say Yes, make the interview a meet-and-greet. Do not interview at all if the financials are unsatisfactory, including the credit check.

Note: I AM NOT A LAWYER.

Thanks for the additional information and updates, Marty. The only rejection we really ever considered was for financials, and we were able to work something out.

I agree Steven. In my 25 years on the Board, I think that every rejection was for financial reasons.

I would think so. Paying for a credit check is normally a routine part of submitting an application, whether or not the application is ultimately approved. It's just a step in the process. There are many reasons why an applicant might be denied after an application is submitted:

1) The applicant's credit check may reveal a poor credit history and thus, a bad risk for the co-op.

2) The applicant may not be making enough income to be relied upon to pay their monthly maintenance on time and in full

On May5 shareholders of co-op will protesting. Board avoid to do election for new board.
They want to be for life. On our letters HPD not respond. What else shareholders can to do, for election. Protest will be on: 156-11 Aguilar Ave, Flushing NY,11367

Glenn - I suggest you start a whole new topic thread for your question. Right now it's buried in the middle of a thread discussing rejecting a new purchaser and I don't thiddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddnk very many people will see it in its current location.

Coincidentally, Cooperator News just published an interesting article on this subject at https://cooperatornews.com/article/the-board-approval-process

Some quotes:

"Boards can demand troves of personal information from buyers, and can approve or deny a purchase for just about any reason--or no reason at all--but they may not engage in illegal discriminatory practices."

"Unusual demands aside, most boards are primarily looking at the purchaser’s financial profile when assessing their application. Can this person afford to buy the apartment and cover the monthly carrying costs? Do they have the resources to pay a special assessment, should one be necessary?"

Building square footage is only one of many factors the Dept of Finance uses when calculating building Assessed Valuation. What you need to do is contact an attorney who specializes in lowering overall building valuations. They're called Tax Certiorari attorneys.

If your managing agent already works with Tax Certiorari attorney or they can't help you find a one, I can recommend the one we've used for at least 15 years. Tax Certiorari attorneys are paid a percentage of the amount they lower your R/E taxes so there are no up-front fees.

My old co-op used to charge $75 a month as a late fee if you missed your maintenance. I know they didn’t do this during the pandemic.

We have just started back up with our Late fees since the Pandemic. After the 15th of the month, your maintenance is late. We assess a $50.00 late fee everytime the pymt is late across the board.