The first step is to explore those variables in a building that you do have immediate control over: operating efficiency of heating plant and domestic hot water system, common area and exterior lighting and choice of heating fuels. Heating fuel: #6, #4 or #2? Availability of adequate gas to effect a conversion? Duel fuel or single fuel burner? Have you capitalized on the rebate/incentive programs for the updating of both interior and exterior lighting? If your building has a large number of thru-wall ac units is the perimeter insulated? Going Green isnt always about adding new technologies, its also about ensuring existing technologies are operating at their optimal level.

I don't know the answers to all your questions. But this is what I do know: "a director of a corporation has an unqualified and absolute right to inspect all corporate books and records." That's a quote from an article to be found here:
http://www.stroock.com/SiteFiles/Pub240.pdf. This article goes on to cite specific case law. It's a must-read article for us newbie board members.

You might also want to review the responses to my BoardTalk post titled: Denying Board Member Right to Read Building-Related Contracts
- New Bd Member Jul 25, 2011.

Last, but by no means least, you will want to find out about the Alliance of Co-op and Condo Owners (ACCO), and once you find out about them you will want to join. Here's why I say that: I initially hired an attorney for answers to my questions. While awaiting my attorney's response, I got in touch with ACCO and received a wealth of information. Good thing, too, because my attorney's evaluation of my rights as a board member was completely wrong. Had I not connected with ACCO and heard what they had to say, I would have been inclined to trust the attorney's advice and walk away with my tail between my legs.

Sometimes, knowledge really is power.

Good luck.

Thank you for the link. The article is great and now I do not have doubt about a board members rights!

However, the question is how to enforce a board members right to examine corporate records?

Do you have any idea how to do that?

Hi, here's my answers based on how most of our client relationships are working throughout the years:

1. As a Board member you should have access to whatever books and records / documents you are requesting. Granted, these documents do not have to be mailed, emailed, or taken off premises from the Management office, the Management company should allow you to view the documents so long as they are given adequate notice and that you are able to view them in the place where they are kept. Some management companies keep PDF copies of most documents, so they can share what they feel comfortable with sharing digitally to save you a trip.

2. In terms of what is ongoing on a monthly basis, some managers keep spreadsheets of open items and the prior meeting will give you a good sense of what is coming up in the next month. The minutes from the last month's meeting or last few months meetings will show you what is ongoing, what is being bid out, what work is taking place, etc. The financial filings and routine payments of the bookkeeping staff are calendared out well in advance. You can always ask the manager to provide weekly or bi-weekly updates via email so that you can keep up with the times. The monthly management package should have information on what was being worked on in the past month since the last meeting.

3. This depends on the Board. Your contract with the management company should spell out the monthly obligations for the financial reports. Some buildings will receive them by the 10th of the month and some by the 20th. Whether or not the manager goes over those reports that were given out prior to the meeting at the actual meeting is up to the Board that you are on. Often, the treasurer will work with the company's controller to get a handle on exactly where you are at the time the report was made. The manager should always bring you up to speed with regards to shareholders who are negligent in monthly maintenance payments and any legal proceedings that are coming up or in process as a result.

4. As with my answer to #1, all Board members should have access to documents, but with prior notice and an understanding that the management company may ask you to visit their office.

5. There shouldn't be, but scheduling ahead with the company will help as they may need the conference room for another closing, meeting, etc.

6. I would think that standing guard would be unusual. We're all adults and on the honor system.

7. You should be able to take notes so that you can ask intelligent questions regarding the material that you have viewed.

8. it is the management company's responsibility to give you the correct information and the complete information for whatever options you are considering. You should have either your treasurer or a committee of the Board talking to the managing agent so that whatever options are given for a loan are backed up with hard numbers and facts. There is no other way for the Board to make a qualified decision.

9. Per the Prop Lease, any complaints are usually required to be in writing. At the very least, when in receipt of a written and signed letter, the Manager should acknowledge, in writing, that the letter was received and that either the issue was resolved or needs to be brought up with the Board. If they can get it out within a week of receiving the initial letter, that's even better.

Hope that helps.

Mark Levine
mblevine@ebmg.com
Excel Bradshaw Management Group, LLC

Mark,
Thank you very much for the answers which confirm that my way of thinking is correct, just the way everything is done in my cooperative is wrong.

1. I as a board member cannot see all documents, especially monthly financial reports.

2. We are not informed by a manager on what projects is he working right now.

3. A manager is not giving us detailed monthly financial reports.

4. Right now we have a restriction that a board member in order to review financial information needs to sign a confidentiality agreement. Surprisingly, a manager does not need to sign it and have a free access to that information.

5 & 6. If a board member sign a confidentiality agreement, he/she can review financial record one an hour per week under close supervision of one management office employee.

7. Previously, we were told that we could not take notes. I questioned that and right now we can take notes.

8. Financial information is only for that board members who signed a confidentiality agreement.

9. Our manager does not answer shareholders’ letters!

As you see, everything is done in the opposite way.
Do you have any suggestions how to fix our co-op?

From seeing what you've written you have one of two choices. Either the Board members who were there prior to you are enforcing this behavior to the management company and you can try to reason with them to overturn this or the management company is enforcing this rule without authority. If it's the latter, the Board has to make an effort to change this mode of operation or you have to look around for a new management company that has a bit more transparency on the agenda.

Mark B. Levine, RAM
mblevine@ebmg.com
Excel Bradshaw Management Group, LLC

Personal shareholder matters should be kept confidential -- otherwise, everything can be shared with the Shareholders.
And infact, if there is noting to hide -- what is the need for a confidentiality agreement? When this was attempted by a Board member (who had reason to keep things secret) on advice from thier Lawyers -- board members refused to sign.

For about five years we had a "secret" board and we are still recovering from the problems that resulted in this board who did not abide by the bylaws, did not keep the board min, and did favors for friends -- such as no permits for renovations.... Like Washington, the more transparancy -- the better the Board. We now have complete transparancy -- and we have seen a very big diffrience in both the way the building is maintained -- and our finances.

The Board member who most wanted the confidentiality agreement -- as it has turned out -- is the biggest problem in our Coop. On legal advice, Board members refused to sign this agreement -- and that was the end of that..

As a Board member, who can be held legally responsibile for the decisions you make -- I should think you would want complete transparacy.
VP

I agree with you.
What would you say if a board have already passed a resolution (by majority) that board members who want to review co-op finance need to sign first a confidentiality agreement? It was done after I as a new board member wanted to know co-op financial situation. They made many obstacle for me to review books and finally made that resolution about the confidentiality agreement.

I need to say that I am the only one on the board interested in the co-op finances. The rest of the board members do not want to know financial information. So probably I would be the only one who will need to sign the confidentiality agreement. Isn’t that discrimination?

What if I do not sign and still having fiduciary responsibility want to review co-op finances?

We recently sold three former renter units for record high prices for our complex after the renters move out and we completely the units. We sold two for $342k each (record high price for any unit) and one for $331k (record high price per share) - all two bedrooms. We spent an average of $40k each on renovations. The net proceeds went into capital funds and we are now repairing our roofs without a loan or an assessment.

We did not have to buy the renters out - they either passed away or moved into a nursing home.

If someone is asking you to buy them out, talk to your lawyer and accountant to see if $10k or $25k makes sense (or lower). It sounds like they are interested anyway so you may not have to pay top dollar to get them to move.

By they way, the quality of the renovation makes a huge difference. These units need to be renovated as an owner would revovate them and not as a rental owner would renovate them.

We recently replaced all of the complex's windows to dubble glazed, argon filled, R-42 casement windows from Skyline. The buildings have a great uniform look. Whenever I drive by Central Park West and see all those buildings with different windows in each unit - I think "Thank God I live in a Co-op".

Please think long and hard before allowing this - I suggest you drive by CPW and see the mess that creates - especially near 72nd street.

If you read the lease, which I assume every condo has, just as every coop does, I suspect there are definite rules about what you can do to the outside of a building. The windows would be an obvious area you would probably find the owner cannot just decide to do his own thing on.

If a coop owner ignores the rules, the owner risks losing his lease (ie, can't live there--bye!) so the condo board needs to be vigilant in protecting the building. What next? He'll decide he wants the front door zebra striped, or painted with a confederate flag?

A privilege. In my co-op anyone with a window A/C pays $100 each season to have the A/C in a window. The reason is that water condensates may potentially damage the ornamental brick.

A right. This is the 21st century. By any practical sense in the world, we have a right to a stove, a refrigerator, air conditioning, running water, toilet facilities and other hallmarks of a civilized society. Do we need anything of these things? No only in the most technical sense -- we could use a hot plate, keep food in a bucket of ice, etc. But in any civilized sense, yes, a/c is a right.

It depends on your proprietary lease, black book and house rules. If they all silent then it is a privilege, if they are addressed then they would be a right based on what is written.

Under the PL's lessor's responsibility, co-ops are 99.9% responsible for windows. Consequently, the prescription of use and rights of windows remain with the lessor or corporation. The lessee may be called to maintain the window and, in many co-ops, balances and other hardware may be identified with the responsiblity of the lessee to maintain or replace due to wear-and-tear. The installation of the A/C in a window may be prescribed by the co-op and the co-op may recover or charge for preventive work due to A/C drips caused by lessee A/C installed units.

Under the PL's lessor's responsibility, co-ops are 99.9% responsible for windows. Consequently, the prescription of use and rights of windows remain with the lessor or corporation. The lessee may be called to maintain the window and, in many co-ops, balances and other hardware may be identified with the responsiblity of the lessee to maintain or replace due to wear-and-tear. The installation of the A/C in a window may be prescribed by the co-op and the co-op may recover or charge for preventive work due to A/C drips caused by lessee A/C installed units.