A thief is a thiesf alive or dead.

Um ... what about all the thieving board members in the rest of the story? Did you read just the first paragraph or something?

Dear Concerned: You are absolutely correct when you say that management closes their eyes and has deaf ears when the Board is embezzling funds from the coop's Corporation. Cooper Square Management is one of those Managing Corporations that do just that. They refuse to turn over financials to cover up for the Board. They do just what the Board wants them to do illegally against Shareholders. In one instant maintenance was refused to be accepted to start an illegal foreclosure on a Shareholder, the building incurred a large law suit for their actions. On the other hand Aris Properties resigned from the same building, when they were ordered to attack Shareholders with violations, when Aris Prop. wanted to collect arrears that were due by the same shareholders for two years the board refused Aris to send those certain shareholders letters demanding payment, but because these shareholders signed those members on the boards proxys they were allowed to remain in arrears while the building had shortfalls monthly to pay bills. These board members are affiliated with a construction company and all they do is sign contracts for major improvements to the building that cost more than it should, work is written up and charged to the building without physically being done. All the work is done by the same company without bids from other contractors. The corruption goes on and on, without intervention or regulations, after all even if it is a private Corporation there should be some control. Shares were written up and offered to the public who purchased apartments, their shares should be protected, why doesn't the SEC or some other form of government oversee and protect our interest whether public or private and offering is an offering why isn't the Attorney General getting involved? After all our coop's were approved and signed off through the Attorney General's office all offering plans go through his office, why doesn't his agency protect us? Crime is crime whether private or public.

DD--

You're right: sadly, some agents act as if they work for the Board, rather than for the building corporation/association. The consequences can be severe, as in the examples you cite.

Unless it's a sponsor or conversion issue (& sometimes even then), the Attorney General's office won't get involved; it's not in their scope of work. Instead, the AG will advise hiring a private attorney & filing suit. (We all know what that costs...& how long it takes.)

This situation has prompted state legislators to propose new laws which will create & fund a NEW AGENCY expressly to assist with co-op & condo governance. The impact will be profound, giving owners & Board members pragmatic options for resolution when some Board members--or professionals--breach the By-Laws or the BCL.

To read the bills, go here:

senate: http://open.nysenate.gov/legislation/bill/S7958

assembly: http://assembly.state.ny.us/leg/?default_fld=&bn=A11452&Summary=Y&Actions=Y&Memo=Y

To ensure these bills are enacted, write a letter of support to your own representatives, no matter where in New York State you live.

NOTE: Some parties--predictably--oppose these "Ombudsman Bills," claiming good Boards will be punished & the "new tax" will break the bank. Rational people that read the bills will conclude such claims are rubbish. Honest Boards that respond to their constituents will be left alone...& a total cost of $6, per apartment, per year, isn't likely to break anything.

I agree ... it is a new tax but that will save us quite a bit of money in legal fees in the long run.

The problem is that the bills have been in the legislature for 10 years and nothing has been done - It is desperately needed for some type of legislation to protect coop/condo owners - need publicity -can we all unite

I live in North Shore Towers a co op community with a budget of 43 million dollars that is run, not by the board, but by the management company. General manager tells board members what to do, not vice versa. Members probably want the title, but not the responsibility. We waste hundreds of thousands of dollars in legal fees because there is no government agency to help us. After casting 5 million shares in an election, I lost by 806. The board refused to do a recount and told me I had to go to court, which I did. My attorney charged $5,000 the board paid between $50,000 and $80,000.Our own attorney on retainer, Errol Brett didn't handle the case which occurs most of the time when we have litigation. No one can get an accurate accounting. Ultimately,the courts cleared the way to the ballots for a recount. What a waste of money. Mr. Brett was recently asked what the policy was to enforce a bylaw and we were told there is no policy. So now we have bylaws but no means of enforcement. I could go on and on with the nonsense that constantly goes unchecked here. We would gladly pay $6.00 each to help create a responsive governmental agency which would understand our communities and help us. Please support these bills immediately with letter writing campaigns and phone calls. Dianne Stromfeld

Good idea - suggest everyone write their representatives.

Great idea. If each of us could get 10 neighbors who in turn got 10 neighbors, etc. t0 contact all our elected officials as well as candidates, expecially those in a primary, we could put pressure on them to pass this bill. Also,send mail to Mike Kelly New York State Association of REALTORS®, Inc.
130 Washington Ave
Albany, NY 12210
Office: 518.463.0300 ext. 216
Fax: 518.462.5474
http://www.nysar.com/

The power of the people often can make necessary changes. for right now, let us all stop writing letters to each other and write to those who can help us make our lives tolerable. Let us fill this column with examples of success or failure we have had with p;oliticians. Perhpas together we can really get this going.

Being a Board President myself and after reading the proposed bill, I am of the impression that "good" boards have little to fear and a lot to gain.

This going to court all of the time is itself a hidden tax of ownership. One that I would like to see reduced under mediation & arbitration as potential alternatives to litigation. Furthermore, the education factor from a non-biased (or at least a less biased) state agency would be welcome too. In my corporation, I would welcome better educated shareholders and board members.

Even good boards would benefit by the additional potential for oversight as you know, complacency can lead, however innocently, to abuse.

I can see a gain for shareholders if Managers felt like they had someone looking over their shoulder occasionally too.

What is the downside – is it $6 per unit per year? To whom can my corporation write the check!

(1) no they are not.
(2) the secretary cannot act alone without board approval.
Why does your secretary have access to your bank account ? That's the treasurers job.

You are doing a big dis-service to your building by allowing this situation to continue. If no one wants to be an officer, you should call for another election ... and find someone who is willing to take some responsibilities.

Thank you VP11104 - I thought the same thing and wrote to see if I was on the right track. Last year was my first as president -- it was a learning curve taking time from my job (not good) and my personal life (expected). This year I was dismayed that no one else would consider the job, so I am doing it again with some experience under my belt. Our biggest problem is the Secretary working behind the scenes to do as she wants (as last year), and I hear most of it from others after it's done. We need to be an effective Board of Directors, and I need guidence to help the Secretary understand her proper responsibilities/limitations. (No director will attend any workshops or classes.) Any ideas please?

As President of the board, you obviously "preside" the meetings and oversee the general management of your building ... it is time consuming, yes.

The secretary should only be involved in keeping meeting minutes and submit those minutes to the board for approval. He/She does not have the power to sign any contract unless authorized by a majority of directors for a specific item. Only you and the VP has the power to do so.

You should instruct your managing agent not to approve any expenses that was not discussed during board meetings and approved by a quorum of directors.

The best workshop I found is a board room with a copy of the property lease, a copy of the cooperator and habitat magazine with lots of reading :)

I do appreciate your note VP11104. Learning to "preside" has been a challenge, but I'm getting there. Thank you for your support on what the president's and secretary's duties are, which are also clearly set out in our bylaws. One responsibility is not mentioned though: trying to keep the peace among the directors themselves! Thanks again.

North Riverdale: Aside from other basic secretarial duties, the board secretary's main job is taking minutes of board meetings and the annual meeting.

Why is your secretary acting behind the board's back (appoving work, etc.) and why are you letting her get away with it - and for more than one year?

You said you need guidance to help her understand her responsibilities/limitations. It doesn't sound to me like she cares about understanding anything if she just does what she wants anyway.

Check your by-laws. Article III, Section 6 of ours states that a director may be removed from office by a majority shareholder vote at a meeting duly called for that purpose.

You also said your shareholders are asking what's going on and your board is taking the heat for your secretary's impropriety. Call a meeting, document her actions, and get her voted off the board.

It seems that you're having difficulty getting all board members to work actively, but this secretary will take you two steps backward for every step that you try to move forward, and she could cause your coop and all your shareholders major problems.

BP, thank you for all the information in your response. I've prepared the pertinent section of our bylaws for the secretary, and will write here again with a follow-up.

North R: Be sure to give your secretary the section in the by-laws that outlines what the secretary's duties are. She shouldn't be doing anything beyond those duties unless she's working as a team with the rest of the board or has board approval to take on a certain task or research something (but NOT approving work, signing contracts, etc.)

The by-laws outline all board directors' duties. Maybe you should give them to the others to get them working on a more active, cooperative basis.

Yes they can.

It is a violation of NY Business Law to have an annual meeting without sending proxies to all shareholder. All shareholders must be given the same rights to vote.

The meeting is technically illegal.

Thanks, VP1104. Two more questions: what is the time requirement for receiving proxies in order to be technically legal? If we send out this week, we have less than a week until our annual. We had it last year in July-is it wrong to have it in August since many Shareholders cannot attend the one we're trying to have this month? Seems like we're in a jam, here.

We usually send out the proxies with the financial report about one month before the annual meeting. That gives the shareholders ample time to review the report, to make arrangements to attend the meeting and give proxies to the person of their choosing.

There is nothing wrong in postponing the meeting to August. Better have one late and right than early and patchy.

Yes,as a resident manager I have entered apartments to address such problems and consider it to be an emergence situation. I would hate to think that someone reported a potential problem and nothing was done.In past situations I would first try to notify the tenant and then enter if I got no response (leaving the shareholder a message as to why we entered) In addition consider the waste of water and the cost factor. Also if you believe the shareholder is doing this on purpose you may have to take a hard line approach.

Good luck.

Thanks but not a shareholder, a resident of the Holder of Unsold shares.

Same applies. Continual running water is an emergency situation. You need to be pro active. You cannot turn around afterwards when your building is flooded and say, gosh we knew about running water but did nothing? As mentioned in my previous e-mail I have entered apts in the past to address this issue and never was it a problem. Tenants were actually greatful.

MRM

Hi everyone, HabitatReporter here --

We haven't heard too much about this yet, but rest assured we are looking into it and will have more information for you this coming week. Have a great weekend everyone!

letting uncertified contractors is not a great idea because even if epa doesn't bother you a shareholder may. Also beware how much you teach your staff other wise your board may be libel as a gate keeper .

As a certified contractor and a board member of my Co-Op I can tell you this new law may very well double the cost of most jobs in any building built before 1978 and all boards should talk with their attorneys first.

Hi, everyone,

The above commenter is mostly correct. The EPA has extended the deadline for training and certification. According to the official EPA memorandum,

"Until October 1, 2010, EPA will not take enforcement action for violations of the RRP Rule's firm certification requirement. For violations of the RRP Rule's renovation worker certification requirement, EPA will not enforce against individual renovation workers if the person has applied to enroll in, or has enrolled in, by not later than September 30, 201, a certified renovator class to train contractors in practices necessary for compliance with the final rules. Renovators must complete the training by December 31, 2010." [The full PDF can be found here: http://www.epa.gov/lead/pubs/giles_RRP_memo.pdf ]

So far this is all the information that we've been able to get from the EPA, but as our phone calls are (hopefully!) returned, we'll let you know what we find out.

The time for substandard management companies is over! Metropolitan Pacific is a fresh air for the face of property management. Visit www.Metpacproperties.com

metropac - unprofessional and useless - unresponsive to shareholders, used vendors that overcharged, submitted fake bids to the board, and consistently paid bills late

We have them in our building, not perfect, but they do get the job Done. I would say they are a 8 out of 10. We have had some really bad mgmt companies by the way.

To become solvent will cost money to pay for past sins.

Cutting payroll cuts services, not always a good path.

Corrupt is a very strong word.

One may use fiduciary irresponsibility. If there is BD&O insurance, and one can prove any illegal action, the current board members can be sued. But, “stuff” you are relating does not seem to give rise to this path.

Drawing down reserve funds is not “illegal”, rather it is a stupid and irresponsible management practice to pay day-to-day expenses from the reserve fund. This also impacts your “individual” tax statements and tax basis at sale time as the reserves are typically set aside and treated differently.

So, financial controls are imperative, good practices re important. Audited statements are a must. If one suspects defalcations, then a forensic auditor may need to be engaged.

If the situation is as represented, there are many analogous postings herein these Board Talk forum. One needs to “search”.

One must wrest control from the incompetents (being charitable) and install professional managers. Remember, running a building is not running a fraternal club or a coffee klatch. Rather, running a building means running a corporation, acting with total fiduciary responsibility (e.g.; putting aside friendships, personal gains, personal desires, subjugating one to the whole). It means the Board acts like a Board.



.

Our Board is split 5 against 3, the five make up their own rules and regulations do not abide by our By laws, they give out fines which are illegal, they only do repairs for those who sign proxys for them, others get harrassed and fined. They have extorted signatures for their proxys. They allowed their friend the Super move out of the building into his new house in a different neighborhood, hired an incompetant to live in the super's apartment, pay him a salary plus union dues, free apartment,gas,electric,phone,cable service, free parking. All this just to replace the super who lives out of the building, still gets a salary without doing his work and we pay for his union dues, gets a free parking spot and if he does do work in the building he expects Shareholders to pay him for anything he does, including illegal renovations on our time. This is part of the corruption. The President of the Board has two apartments, one was her son's until he got arrested for dealing pot, she transfered his shares into her name without paying transfer tax. Her son now sublets without paying sublet fees of $25.00 monthly like other do that sublets. We found through our financials that she paid two Shareholders $3,000 for their proxys and labeled them repairs and maintenance. Since when do co-op's pay Shareholders for their repairs and maintenance and it happened to be the same amount. Yes, we intend to do a forensic audit when and if we win and take over, it will be well over due. When I said cut payroll, we don't need a body to live in the super's apartment that does nothing but sun bath outside our building and talk on his cell phone. As far as the Super we need one who will live in the building and work for the Shareholders. They breach their fiduciary responibility every day and yes we do have BD&O insurance which will be a path we will take with cause. They linked a checking account to the reserve account, when we have an operating account, why are bills not paid from the operating account? How we picked this up was when we went to management to do an audit all the monies that were paid out to the construction company was not disclosed becuase the reserve was in a seperate account held only by the Board's five members. How do I search for these analogous postings? I need to help the shareholders and save my home as well.

Thank you for your response.

Sincerely;

DD

This sounds, (all that I have just read from everyone)just like my building, it's awful, a forensic investigator might help but that costs lots of money. Is the Managing Agent just as bad? I would suppose so, because ours is since they only listen to the majority of the members. We have issues where our board made a separate board within. I would like to hear some ideas.

Yes, the management company is just as bad. We fired them three years ago. Just before these people were elected a new management company was brought in, when these people got elected they tried to corrupt the management company, they refused to participate in our politics, they did nothing for the building and waited till they got fired. These people brought in another management company, they tried to corrupt them, they refused and quit. Now they brought in the company we fired, because they were always corrupt and now they are once again violating their fiduciary obligations, putting on illegal fines to shareholders maintenance statements. They even brought in their own corrupt attorney to work against us.

We had to hire our own attorney to protect us and hopefully, we will win and overthrow them in the upcoming election.

Could you share the name of your attorney - we need to find an honest lawyer who is able and willing to take on a corrupt condo. We also need a forsenic accountant who would work for a percentage of monies recovered.

Our board stays in power by bribing a few influential owners who then sway opinion from their friends. These people are loud bullies and most owners don’t want to cross them.

Our board also stays in power because our management company is able to manipulate and strategize keeping their friends on the board to the detriment of anyone who votes against them. Who is your management company???

How about if everyone in a corrupt building writes a report to the Attorney General and sends it on the same day. We can alert the press that condo buildings will be doing this and we hope that potential candidates that hope to be elected to the attorney general’s office will investigate and prosecute corrupt boards of directors and corrupt management companies. If we can get this into the press and the attorney general’s office gets enough complaints, they could use condo corruption as a campaign issue. What do you think?

Excellent idea

Are you located on the UES. Sounds very like the building I reside in.

Billy.

Do you know anyone in the attorney general's office that would help with an out of control and corrupt board.

Dear Harry B. The Attorney General does not interced in privately owned Corporations. We are basically on our own. What you must do, is take over the Board, write letters send it around the building enlighten the Shareholders on what is going on in the building. Collect proxies and get an honest team together. Once you get them off the Board, hire a good attorney for the building and do a forensic audit and sue each member for willful misconduct, breach of their fiduciary obligation and other counts that the attorney and the audit will reveal. What State are you in?

Corrupt is a very strong word.

Reserve funds are there for rainy days ( unexpected repairs ) or for capital improvements.
The new board will have to work very closely with the management agent and the corporate accountant to review expenses and contracts. There's always a better deal out there.
You can keep an eye on Payroll and avoid overtime. You might be able to cut a shift here and there, but try to avoid cuts that would affect services that shareholders expect.

If you have doubts about the performance of your corporate attorney, CPA or management company ... you should consider replacing them.
It's important to surround yourselves with a good team that will work for your building and its interests.

This is going to be a long and time consuming process, if things are as bad as you describe.

I understand that corrupe is a strong word. Bills are being paid from reserve account. After reviewing the reserve account in Sept. 09 we had $115,952.42, than in Oct 1 thru Nov 30th. there was $79,384.00 how did they know in Oct, what Nov will have, the statement for Nov. disappeared. Which now leaves $36,568.42 missing without any explainations no checks written out in that amount. Comes December 09 a check was written out for $3,685.48 without explaination to who or what for. Why would you use the reserve to pay month to month bills, when we have an operating account.

Before they took over we had $244,000 in reserve, we refinanced our mortgage and took out half million dollars for construction. They used their own company to do the construction, which the scope of work was cut in half and most of the work that was to be done was never done. They breached old contactors contract which put a lien on the building for $150,000, breach contract for railings for balcony which cost us $5,000. Arrears in maintenance went up to $40,000 uncollected because these people signed their proxy's. Where is our money, they refuse to give our attorney the financial statements and other financial documents,bids for the construction, garage list etc. Our attorney had to file in Supreme Court to attain these records. The list goes on and on.

Why not go after the people that are stealing your money (board and management?) instead of laying off staff. After all why should a hard working staff member suffer because someone else is corrupt?

MRM.

My Goodness are you speaking of my coop. We are having very much same problems. Majority rules and as corrupt and self-serving as they come. Visited with Attorney General and of no help. If your situation is solved, please report back. All in all, shareholders are entirely at fault as they tolerate these incompetent board members and keep electing them year after year.

You need to overthrow the board. If you would like to know how we helped a building overthrow a board, and then helped the new board increase cash flow by $250,000 annually since then, without laying of staff, please contact me directly: tina@thecoopblog.com

This blog seems to be filling a vacuum. It seems to be offering objective assistance to shareholders who want to take action to create an educated, effective board in order to put their building on a sound long-term financial footing.

Is there a fee for this service?

Thank you for your comment. Yes, we were inspired from our own experience and our professional expertise as financial professionals. We therefore started a professional service helping other boards. We are happy to offer free advise or to be engaged for a professional review charging a small percentage of actual savings/increased cash flow. If engaged in a deep dive, no upfront cost/risk.

If your allegations are true then this is a police matter, it's called Grand Larceny. I do hope you have proof of these corrupt members. I would take all your paper work (evidence) that is backing up these serious allegations and bring them to your local police station/district att. office. What you are stating is a very serious crime. You will need no money by doing this just proof to back up what you are saying. Good Luck

So, we are not the only building with this problem.

Let us know how this works out for you?

That was my frustration emerging.

The "letter" was my frustration emerging....tongue in cheek....but some of us thought we might post it to rile the residents or rouse the residents to action – whichever is best.
. . . .
It is not the resident, per se, though the resident supplies the “liquid” bleach. Typically, it is the “careless and uncaring” household aide who causes the spill.
. . . . . .
But, we do have a “carpet dyer” that we call to effect repairs - restoring the colors. It isn’t 100%, more like 85% to 90%, but it certainly looks better and saves on wholesale removal and replacement. And, the dyed color survives repetitive carpet shampoo treatments with our power shampoo machine.
. . . .
Bonne chance!

Instead of doing, this I assume "Fake Letter" I would rather take action in a different way. For instance, I assume you have a laundry room; do you have security cameras in there if not why not? Get them installed if you do not, not only will it provide surveillance but it will also allow you to view who is in there. Have your porters do hourly inspections of each floor, have them sign off, and describe the condition of each floor. Usually there is an schedule/pattern when people or the help do laundry so get that noted. Also, get estimates for new carpets through out the building from 3-4 different vendors. Send out a FYI letter to the residents stating that their maintenance will go up or an assessment will be put into place to pay for the new carpet. That will show the residents that the board is serious about the appearance of the building. Also keep in mind that the bleached carpet is probably coming from a resident who fills up a cup with bleach enough for the laundry and some spills over, that’s how it has happened in my past buildings.

I would focus more on educating my tenants rather than "ban the bleach". It is not the bleach rather more so the careless individuls. Like the previous RM response, you have to educate your shareholders/domestic help and also make sure your staff are extra vigilant and support them when they report "an offender". I had pretty much the same situation in the property I manage and being pro active helped. Did you ever look into installing a cabinet in your laundry room where bleach would be available for use so there would be "no transportation" of the product from apartments. Just a taught.

ARM

It may not even be the tenants who spill the bleach, most tenants have house-keepers who do their laundry. The house-keepers really don't give a damn about the buildings carpeting. I agree that the bleach shouldn't be transported and like the idea of having bleach stored in the laundry room.

Hi! HabitatReporter here! The short answer is that it depends on your building. The longer answer is that you'll have to check with your board and your own proprietary lease, and even then it might not be clear. Check out this Habitat Magazine article from our February Digital Edition, called "Inside, Outside, Whose Side?":

http://www.nxtbook.com/nxtbooks/habitat/201002/#/32

You can also access the article in the Habitat Archives:

http://www.habitatmag.com/archive/p_view_article.php?article_id=3889&next_page=p_article_list.php?returning=true&print_only=

You might have to copy and paste the URLs; Board Talk is sometimes a little funny about hotlinking. Hope this helps!