I thought, in order to be price fixing, there must be cahoot. Who's the other party? Remember, the board has the right of first refusal. Buy it and resale it.

The main reason for a board to reject a low price offer on a coop unit happens to be value of the other units. When units are financed through a bank, there is a bank lender's questionnaire to fill to arrive to the right value of the unit (bank appraisal). If units have sold at a low price in a coop, banks will not be willng to lend money for a unit at a much higher value. Consequently, the price of the other units suffer. In a down or stagnant market, a low price may be rejected by some co-op boards in fear that the units will be devalued.

In a coop there is no right of first refusal. The Board just refuses for a reason or no reason at all. A low price is a common excuse in some co-ops.

AdC

You live in a co-op. Your apartment is in the same line as one for sale. You're about to put yours on the market, and suddenly the other guy drops his price substantially because he's desperate for an offer (maybe he used the wrong real estate agent who doesn't know the neighborhood and wasted 6 months of listing. Maybe the shareholder is selling it himself. Maybe he's in dire financial need and in danger of foreclosure). And suddenly, YOUR apartment is worth a lot less than it should be, because "the comps" reflect lowered pricing on his apartment. (This actually happened in our co-op; the second owner was denied more than $50K of sale price the very day before he was going to put his apartment on the market.)

Lowball prices can ruin a co-op's value really quickly. A board that's cognizant of its fiduciary responsibilities may feel it has no choice but to reject an offer it feels is too low. And yes, before allowing an offer that's too low to go through, I think the board might consider purchasing and holding on to it until the market's better if the co-op can afford it.

I agree with RLM. We had to do this in our coop and later found out the 'agent' wanted the unit for his own profit.

I don't think fiduciary responsiblity stretches to the point in which you will be protecting the market price of certain apartments when they are listed. There are many reasons why an apartment is listed and sold for less price:

1. You mentioned financial hardship of a particular individual.
2. The need to sell immediately to relocate rather than subletting or leaving an empty apartment.
3. You bought low years ago and have flexibility in the price you accept.
4. A handyman's apartment (i.e., unrenovated and in need or major work)on the same line v. a move-in, totally renovated apartment which commands greater price.

However, the main reason why Boards worry is the drop in appraisal value of apartments and the ability to obtain financing on units with higher prices.

Unfortunately, Boards do not worry nor have any power in forcing residents to improve their units and to keep them at a certain minimum statndard. This may be the cause of disparity in prices. The conditions of a unit are major considerations when selling a unit. I have seen units with the same layout and on the same line that require a minimum of $25K in basic updates and repairs. These units can only be sold at a low price so there is an incentive to renovate. As you may know, you cannot request a share loan above and beyond the asking price to conduct renovations. Consequently, unless you have the cash for renovations or you refinance the unit at a later time or request a personal loan at a higher interest, the unit may not be renovated.

I would say, Boards should be extremely happy when residents renovate and take pride in their units. Therefore, if the person buying the unit has the intention to renovate a neglected unit, tne purchaser will demand the market price at the time to sell. In the case of the shareholder who could not sell at a higher price, extra time will be necessary to find the ideal buyer or reduce the price if necessary if the wait becomes too long.

AdC

"...However, the main reason why Boards worry is the drop in appraisal value of apartments and the ability to obtain financing on units with higher prices...."

If I may add... that most of the time, it is a self serving concern as they feel the value of their own unit is being compromised, but as AdC pointed out, and I will plainly state, they may be too short sighted or narrow minded to make or draw an ingenuous assessment of the current situation and wind up doing more harm than good in the long run… Did that make sense!?

~AR

I agree with AdC, Right of First Refusal is in a Condo not in a Co-op.

If you have access to the Habitat article archive, read this:
http://www.habitatmag.com/archive/p_view_article.php?article_id=3803

An excerpt:

[A board member] asked, "Legally, can boards even set minimums?" In Manhattan and the Bronx, the courts have said, "Yes, you can." In Westchester, Queens, and Staten Island, it’s been, "No, you can’t." The logic in each case was contradictory. ... No higher court has ever reviewed the conflicting rulings.

The buiilding Super/Resident Manager should seal the smokers apt as well as the adjacent apts to prevent the smoke for entering the non-smokers apt. Also the smoker has to properly vent his/her apt.

Ellen, We too have an old building, and a number of apartments have been combined, or taken over a room from another apartment. But, this was taken into consideration when the mergers were applied for, and shares reallocated.
This is not leagal -- and the Building lawyer, as well as Board members should have taken care of each individual apartment reconfiguration. I would strongly advise the Board to have your lawyer look into it. If there is a Board member benifiting from this, since they now know the rule -- they should immediatly move to have this resolved.
If the rest of the Coop gets wind of this, there could be serious problems.

Thanks for your message HG. We are way past that point. Lawyers have looked into this numerous times and nothing can be done to reallocate shares. That is why we have thought about evening the playing field with some other sort of charges. It's not the mergers that created the problem it was the original unit owners that converted the bldg and gave more shares to the storage areas and maids rooms all of which are individual units today.

To change the distribution, you may need every shareholder to agree to a redistribution. Unfortunately, when it comes to redistribution of wealth, there are VERY FEW if any who may gladly embrace the idea. In this case, those who are benefited by the current distribution of shares will hold on t on to the status quo and will not vote in favor of such a distribution. Therefore, due diligence is critical when buying units and making sure that the apartment that is of interest is not unusually endowed with an unfair distribution of shares.

Good luck!

AdC

I know, i know. We would not even attempt to reallocate exactly because of what you describe. Instead I believe we can even out the inequality by charging apts with lower amount of shares per sq ft with other charges that are now split equally. Have you heard of anyone doing that?

I believe you will have a major litigation if you were to do something like that! You cannot charge phantom charges just because you wish to become Don Quixote.

AdC

Unless you can demonstrate that an apartment is consuming a larger share of a specific resource -- by submetering, for example -- then all charges must be on a per-share basis. Any attempt to reapportion charges based on subjective criteria is extremely questionable and could land you in serious legal trouble.

The resident manager prepared a cost per share vs. a cost per sq ft analysis and it varied from $1.30 per sq ft to $3.05 per sq foot of maintenance. There is no submetering in place because not all of the apt's infrastructures have been properly upgraded. As a result, any building wide charges/assessments which are based on a per share basis are widely disproportionate and constantly creates a division in agreement about any projects, etc.

Has it always made noise or did it just start?

Guests have heard it , but I haven't. Hard of hearing. But now I hear it.

You should have the superintendent ask the boiler company to check the top of the chimney, sometimes birds get in there and start building nests which could partially block the space, resulting in a whistling sound when the air is trying to escape the flue. That's why they have cages on top of the chimney's.

That is correct, Penmark is now a part of Brown Harris Stevens.

Once you replace entrance doors, you must have them open towards the outside. Most stores have them like that, this is done in case their is an emergency everyone would rush to the exit/entrance doors and have to pull open the door causing the people to stop and pull open the door, causing the people to slam into each other. They changed this rule a couple of years ago.

Thanks. That's disappointing. Even though the landing the door's opening out on to is only the size of the width of the door? Which forces people with carts and things to have to back away until the door clears.

It may be inconvenient but an occasional inconvenience to someone with a cart is nothing compared to what would happen if residents were trapped while trying to get out.

I don't believe you are allowed to use one in a apartment. But check the link to the fire department below.

www.nyc.gov/html/dob/downloads/bldgs_code/rule_28-02.pdf

they do not need a vent - if they are the new ones. nope. no city codes apply. they are like candles.

Our new board raised maintenance 6% a few months ago with no explanation other than the new Management said we were not keeping up with other coops. To say the shareholders are a little upset is an understatement. I believe in a 2% COL raise unless something in the budget went out of whack, then you have to balance the budget with a larger increase. Good luck.

We have seen an increase in arrearage. I was thinking about proposing to the Board that we borrow from our reserve fund on a temporary basis (until the specific arrearage issues are resolved through the courts) to be paid back later. We have approximately $5k per unit in reserves. I am not seeing much pressure on other expenses with the exception that it might be a colder winter. We also have the union staff raises.

I believe that arrearages are going to continue to be a problem with the general poor economic conditions and people losing jobs every day. While borrowing from reserves is a temptation, I'd be very cautious about that because how are you ever going to put it back? It's a bad precedent to set. I've brought up at our Board meetings that we need to be alert to people losing their jobs and having arrearages but no one seems to care. To me, that's a problem too, and I really don't know the answers. Please keep us posted on how things go, and good luck.

Riverdale has it right. Borrowing from reserves to pay for operations is VERY dangerous - you could easily find yourself being unable to pay it back without an even larger increase in your operating budget.

Also see my other post about real estate taxes - they are much bigger than your water or heating bill and you can be assured that they only have one way to go...UP.

OK - maybe I am missing something but I don't see a danger in borrowing from reserves for a temporary arrearage issue that I expect will go away when court proceedings are complete. Raising maintenance for true expense increases in one thing (and we may have a small one for that reason anyway). Trying to raise it for shareholder cash flow problems is another and harder to support. The only danger I see is once the funds are received, not having the fiscal discipline to depositing the funds back in the Capital Account. If I am missing something, please let me know before I present this to the Board on 12/5 for a vote.

Thanks!

In our budgetary preparations for next year, our water bill is anticipated to rise 10% again – which for a small building adds 3-4K in expenses, there are union pay requirements, plus the pension surcharge, MTA surcharge which is on gross income, utility increases, which add up as well. From our operating standpoint this will be offset with our new sublet fee and storage room implementation, so we may be lucky to keep maintenance flat. As a driver of financial prudence, we are upgrading our parking amenity, and increasing the fee to a discounted amount compared to Riverdale indoor parking surrounding us, increasing our revenue side.
The arrear issue is one we are monitoring closely, it has increased across the spectrum, and we are looking to work with each shareholder to confirm circumstances and to work with the shareholder to get back on track. For the 2010 budget we are going to go the conservative route and assume a 1% reduction in maintenance revenue due to arrears etc to be safe. If it does not materialize we can adjust at year end or bank the money.
Additional budgetary note – a provision has been made each month to continue funding our reserve fund, to keep focus on the long term needs of the building as part of the budgetary planning process. We maintain a separate project list with funding requirements and time frame and as funding is completed the project commences.
I hope this helps.

I see it raising 5% - last year an increase was not passed. This increase is due to catching up with costs. Although the economy has not been great, prices have not come down by way of services. It is also foolish to cut your scheduled maintenance in bad and good times to satisfy your shareholders. Expensive equipment suffers as a result of poor maintenance!

AdC

Each of my buildings have a different expectation for the maitenance.
We are raising maintenance in most by 2% to cover regular inflationary costs.

Some buildings we agreed to keep it the same and announced to the shareholders that the board would review the budget again in May/June to reassess the need for an increase. That is the minimum that should be done at this point, you should never reduce maintenance. If your in that great of shape where the excess is too much and you feel the need to give back, return it in the way of an increased service.

~AR

What surprises me in this chain is that no one has mentioned real estate taxes which likely represent the largest single line item in your budget.

Real estate taxes represent more than 50% of our budget. Our auditors are advising us to expect both a increase in the tax rate AND the assessed valuation on July 1 which could add 3% to 7% to your tax bill. Add to that the likelihood of a NYC mid-year increase (January 1) and you get a significant number without even considering the other line items of your budget.

Those of you budgeting for a negligible increase or no increase at all should discuss it with your accountants and sharpen your pencils!

I was advised this week by our managing agent that the city has increased tax rates retroactively 1.44% starting in January 2010 (for July -December) which means a 2.88% increase for the Jan - June 2010 period (1.44% for the past period and 1.44% for the current period).

Has anyone heard about water/sewer rates yet? I was planning on a general 8.5% increase starting in July 2010 unless someone has heard anything more specific.

Water bill is proposed to increase by 10% in July; I doubt this will be pared down given the budget shortfalls of NY City and NY State.
We are budgeting an increase of 7% for real-estate taxes, based on increased value estimates.
Also look out for increased electric costs and for those with large staff requirements, MTA salary surcharge, along with union requirements and pension surcharge.
Hope this helps.

Good idea. Because often they get lazy about electrical consumption otherwise (ie they have no incentive to be careful) and it gets abused. How about giving him a budge of $100 a month and about 12 free CFL lightbulbs ?

Superintendents should be proactively working with both their managing agents and boards on methods of further slimming expenses within their control in balance with service levels expected. If a building’s board with a $1mm operating budget isn’t experiencing them coming forward with cost-savings ideas, directors wouldn’t be thinking twice about his/her electric bill (unless you have a penchant for thinking “Green” which is valid in its own right). As water finds it own level, in time, so do supers and boards who will pair off appropriately; the unqualified super and the petty board, the qualified super whose always challenged yet appreciated by their community. Perfection isnt obtained though it's sought.

Sally, it does not matter if your a lazy super or a lazy CEO, the fact of the matter is if your not happy make a change. Resident's like yourself are the reason why you loose a good super. No good super with self respect is going to put up with your non-sense. We get called at all hours of the night, when we are out with our familes we retreat back to the building to do the right thing, we make repairs that are not our or the buildings responsibility for the simple reason that we just want to SHUT YOU UP SO YOU COULD GET OFF OUR BACK!!! And all the building politics we put up with and issues that do not concern us but we do the right thing for the interest of the building and the residents and now you want to nickel and dime the super for less then$60 a month is a spit in the face if that super had any self respect he would high tail out of there and allow you and the board to search and find a person WHO YOU AND THE RESIDENTS trust to live with you keep your spare keys and for less then $60 a month you want to create a negative atmosphere. All I can say is that I hope it comes back to you!! but your probably so misreable and lonely, and you know what they say misery loves company....

Anonymous would make a better point if he weren't so bitter, angry and full of invective. I, for one, would never want to have a time bomb like this guy "liv[ing] with ... your spare keys."

We're all cutting back. I'm a working, white-collar professional, and I've even cut back on things like the $20 a month HBO was costing me. I'm shopping at a less expensive supermarket several blocks away from the more expensive one nearby. If this super can't understand that a building may have to cut back as well, then I say cut him loose before he slits the board president's throat in the night.

And tell me, Anonymous: How do you justify the super who kept his AC going 24 hours a day? There's no need whatsoever for that when no one's in the apartment. I'd love to hear what possible rationale you can offer for that.

First let me ask a question, is there a electrical meter on the superintendents apartment? I know some buildings that the electricity is tapped off of the main building panel to connect the superintendents apartment (if the apartment is on the first floor.

Just how much electric is he using? It sounds pretty petty to do this, you say your not happy with his/her performance, what happens when you get rid of the superintendent and hire a GOOD superintendent, are you going have him/her pay for the electric? Just when does it stop?

A few years and supers ago, when we took a look at the Supers elect bill. In the summer he ran the AC 24/7. We put a cap on the electric bill, and he decided that he did not need to cool his apartment while he was away. We have also now limited the Phone bills, cancled the Supers parking garage and are finding many ways to cut back.
We are a small middle-upper calss building. We now have over 8 owners who have lost jobs, or seen retirement funds almost dissapear -- we are getting very serious about looking for ways to save money -- which may include reducing the staff.

We personally like our super, and he does a good job. Howere, we are having to take a hard look at our overhead. The Super
lives in a 2-br apartment that would rent for over 3500 a month, considers this a 9-5 job, and is away on weekends. If there is an emergencey, the DM calls the Management Emergency number, and they send someone over. No matter what anyone says, this is a cushy job -- that pays very well. VP

A conscious super should not be abusing services provided to him, but if he and his family seems to be using more than usual, you may wish to sit down with him and explain operations. I believe everyone knows their wallet or have a sense of it.


If you cap it, it should be at a reasonable amount. If you have an independent account for the apartment, you may get a history of consumption and may come to a good understanding of what would be reaonsable in this case.

Finlly, just because the super is underperforming, this should not be a bargaining chip. Try to promote him to the position he deserves if he does not amend his behavior.

AdC

I work as a Resident Manager for a very well known firm. As a resident manger/superintendent which ever title suits you best. It is in OUR own interest to take these issues very serious. Just as we are trusted to watch over the very building that we work for, we also must not take for granted what we have as every employee should. If your current super is not up to par with the board and the direction it would like to see the building go in. Then maybe the board should make a change and if that is not an option yet. Then maybe your managing agent and your super should have their job descritpions given to them as what each of them needs to be doing on a daily, weekly and monthly basis. Such as maintenance, repairs, gather information for the board and supervision (walk through) and follow up phone calls/e-mails etc. I am sure that the board can think of many ways to get the results that you would like to see. If not then maybe he should be given an ultimatum. If he is abusing his utilities, i would suggest that the most DIPLOMATIC board member sit him down and express the concerns that the board has. I believe that this is the best way, for the simple reason that he will see that the board is very serious about this and he will also be on alert that the board does see things and that they do investigate. I believe that he will either change his ways rather quickly for better that is if you outline the issues and the expectations. If he does not well you already know what the next option is.

How about if the apartment is metered, let the Resident Manager contact Con Edison and have the account switched to his/her name, then the coop/condo don't have to worry about how much electric they are using. Just a thought.

The short answer is YES, the coop corporation can indeed be voluntarily dissolved and the building sold. It is very rare, but it has been done.

For the dissolution procedure, you'll need to check your Proprietary Lease. In our lease -- which was based on the same template as many other NYC coops -- the relevant details are in Paragraph 31(g): Termination of Lease by Lessor / Termination of All Proprietary Leases:

"If at any time the Lessor shall determine, upon the affirmative vote of two-thirds of its then Directors at a meeting of such Directors duly called for that purpose, and the affirmative vote of the record holders of at least 75% in amount of its then issued shares at a shareholders' meeting duly called for that purpose, to terminate all proprietary leases..."

This was highly informative, but the questions in your case would be:

1. Do individual shareholders control a 75% of the shares to be able to pass the dissolution of the corporation?

2. What do you expect to gain from the dissolution if you were to succeed in the vote?

3. Would you have any hope that the value of the property every be higher than the total cost of the apartments?

AdC