Hi, ab,
Cutting to the chase, you're probably going to have to remove your window a/c. If the board decides to prohibit them, they may do so, and a judge will most likely side with the board because it has the right under New York State corporate law to run the business as it sees fit (as long as they're acting fairly).

But you think they may be singling you out, which wouldn't be fair. However, you also mention that the e-mail(s) you have received refers to pedestrians on sidewalks being hurt. That is probably because it was a standard e-mail that went to everyone. So it sounds to me as though everyone is being treated equally. If you still think you're being singled out, you can submit the apartment numbers of your neighbors who have window a/c units or simply point out that you're not the only one violating the rules.

You also suggest that the safety of your a/c is irrelevant because your windows don't face a sidewalk. But even windows that face an alley (or other service area) present a danger. After all, the laws of physics apply no matter which way a window faces: an a/c can fall even if it's over a rarely used space. Your super could be killed if an a/c falls on him, no matter what you call the spot he's standing on.

The city requires window a/c units to be properly installed with metal brackets. In my building we require a licensed professional to install them (yes, the city licenses a/c installers). You can be fined if the fire department or building inspector decides your a/c is improperly installed. This is rare, but most people have never heard of it.

As for the lack of a "posting indicating that window AC's need to be removed," posts don't matter -- although they're a nice courtesy. What matters are either the house rules (which may point out specific rules about things in windows) or your proprietary lease, which gives the corporation the authority to decide what can and cannot go in a window.

So even if window a/c's were once permitted, the board may have changed the rules.

If you're still hot under the collar, save yourself some money and check both the house rules and proprietary lease before contacting an attorney.

The bigger question to me is this: how are your wall units blocked? From the inside or the outside? If they're blocked from the outside, the co-op is responsible for clearing the obstruction; I would negotiate to keep your window units (assuming they are properly & legally installed) until the wall units are unblocked.

If they're blocked from the inside, you will have to undertake the work to clear them.

The bottom line to remember: the co-op owns the windows, and has the right to decide what goes in them. It's one of the choices you relinquished when you signed the proprietary lease.

Change the management company with another one.Way too much turn over in the property managers position. Is it the company or is your building too hard for the agent to handle?

Either way the building is suffering!

Sharheolders have urged the current board to replace our managing agent JAL for months now to no avail. The building is not that difficult to manage but our board is all over the place. The current board does not communicate with one another, and as a result there is a complete lack of communication to shareholders. Hopefully at our next election things will change.

Get a petition together requesting a emergency meeting of the shareholders. Then see about getting the Board of Directors out of office, they seem to not be getting things done!

If you should go this route, have a slate of candidates ready to run for the Board.

Good Luck!

thanks for the information. We have an election for a new board coming up in month so hopefully this will lead to a new board and new managing agent.

Thanks for the info. Shareholders in our coop have taken your advice and organzied a petition. once we send the letter to the management and cc: the board what should we expect to happen.

I am an Account Manager for LRC. We provide affordable cleaning and maintenance services for residential properties. We are managing over 30 condominium and co-op properties in the NYC metro area. We can customize a cleaning and maintenance program to suit your individual needs.

I'd like to send you additional information about our services. Please contact me at hans@lrcny.com or at 347-867-4812.

I look forward to hearing from you.

Regards,

Read your Bylaws... More than likely your ByLaws outlines how the SH can call a meeting. In our building its with a petition signed by ?? number of SH.

Also, EmailPower. Transparancy Rules. Get everyone in the Email loop, Make sure that your Emails are not personal, stick to the subject and the business at hand.

AliceT

Our financial statement is also overdue, and our board also tends to ignore requests for information. Just two days ago our board president accused me of "wasting [her] time" when I wrote to advise about two problems that came to my attention. She said that since I came up with the answers myself later on I should not have written her. Her email was filled with bold print and underlining to make her points. Nevertheless, I'll ask why the financial statement is overdue and keep you posted.

Follow up to North Riverdale financial statement entry:
The board president replied: she turned it over to the property manager to answer, and the property manager passed the ball to the accountant, saying that since our annual shareholders meeting was delayed until June, our financial statement was likewise delayed so that he could prepare the statements of the coops with ASMs earlier than ours. The reason the ASM was delayed was the accountant couldn't be available until June - 3 weeks late.

This is a circular argument. Our ASM was supposed to take place the 2nd Tuesday of May; the financial statement was due in April.

The property manager now says the By-law calling for the financial report in April is "only a guideline" -- essentially, who cares about the shareholders!

Has anyone got any suggestions please?

Well, you can always write a formal letter to the Board, copying the property manager, the accountant, the NY/NJ (whichever state you're in) State Attorney General and the NY/NJ Secretary of State. Be sure to be brief, rational, objective, and factual. Use bullet points, such as the fact that your by-laws state your annual meeting is to be held the second Tuesday of May, and the financial statement was due in April. Summarize your communications with every party to date without name-calling, hyperbolizing, or editorializing. End by asking for a definite date when a) the ASM will be held; b) the financial statement will be mailed.

Make sure the cc: at the bottom lists the Secretary of State by name and title.

Try it; you have little to lose.

To Suggestion: Thank you for your excellent suggestion regarding late financial reports. Some boards seem to think they can abide by only those sections of the bylaws that are comfortable.

We typically complete and publish our annual report in May of each year for the preceding year. It just makes it easier for our outside auditors to complete and submit all our annual tax documents and then prepare the annual report.

But, a word of caution is in order. Our co-op is in superb financial condition, with virtually no hidden agenda or surprises.

So our shareholders are aware of the “program” and we have no adverse comments given the many years we have employed this schedule for publication of the annual report.

Of note is that shareholders have the option of communicating to the corporation’s attorney if one opines that something is untoward or amiss.

Without being strident in emails or letters, a paper trail is always the best vehicle.

Dear AB,

I am a corporate accountant by trade. My co-op kept on receiving late audited financial statements until we switched to Zeidman, Lackowitz, Prisand & Co., LLP (whom I met at an event). We are very happy with their work, access for questions and timing. Our annual meeting is in late June and our financial statements have already been delivered to the shareholders.

I was impressed by your knowledge of finances as evident in your note. From my experience, there are many innocent things that can hold up a Financial Statement. I would be VERY concerned if they are not available by the annual meeting. I would also be very suspicious if they are not available in advance. Handing them out at the annual meeting (if that is the first time you are seeing them) does not give the shareholder time to consider the results.

That being said, I am all in favor of having a healthy sense of skepticism however having a sense of skepticism that exceeds "healthy" can be damaging to the corporation in that it breeds distrust and makes serving on the Board very undesirable. If you have tried working with the Board to address your concerns to no result, then by all means be more proactive however if the Board has a bunker mentality for no valid reason, that is not good.

Steve,

thanks for your input. Shareholders have pressed the board and mngt and we recieved our statement last week. Shareholders have also requested a special meeting to remover several current board members due to their lack of action and lack of communication. Hopefully a new board will lead to a new managing agent at the next annual meeting coming up.

Are you referring to each shareholder's right to the peaceful and quiet enjoyment of their apts? If you have noise disturbances from another shareholder you must document it in letters to the managing agent and the Board and they will act on your behalf to settle the situation. But you must continue to pay your maintenance regardless.
Hope this helps.

Although the term "Quiet Enjoyment" may be found in your proprietary lease or other documents, and is probably the term you were thinking of, it does not mean lack of noise. "Quiet enjoyment" actually means that you have "use or possession of the property undisturbed by claim of superior title".

Check your House Rules - your problem is likely referred to as disturbing noises that interfere with the rights, comforts or convenience of other occupants.

"Quiet Enjoyment" is the phrase that everyone misapplies. I'm glad you stated what it means.

AdC

Check your Proprietary Lease....
Generally, the Board Members elect officers; if you want to elect a Prez and VP of Operations (who would effectively be Co-Prez) it would probably be OK, but I believe in the eyes of the Law, you ultimately have to have a Prez who signs off on documents, etc., a Treasurer and a Secretary who also signs off on docs.

Take a look at your bylaws. In most cases, as far as I know, it's possible to have two vice presidents but not two presidents, nor two treasurers. Your bylaws should spell it out.

Also, usually, officers are appointed by their peers on the board (not elected by shareholders). Board members are elected by the shareholders; officers are then appointed by fellow board members.

It's great that the two of you work well together. Makes for a productive board! Maybe one of you could take a turn as president this time around and the other could serve as VP; then next year, switch. In the case of our board, the titles are really just formalities. At least that's the way it is now, and we find it much more productive this way. (For four or five years, we had a BP who over-identified with his role, took it and himself far too seriously, and the result was completely dysfunctional: just a mess!)

The hierarchy is a legal requirement for corporations, but the titles don't have to be overly rigid.

Good luck, and let us know what happens.

Co-President is not the best solution.. How about a Vice-President?

And since you should have a VP, perhaps they need to step up and take over some of the responsibilities..
AliceT

From my experience, boards are required to pass these credits on to shareholders.

However, many boards have not factored these credits into their annual budgets.

Therefore, they must assess for the amount of the credits on a per share basis.

In order to allow these credits to flow through to shareholders, without need for assessment, maintenance would have to be raised to cover the amount of these credits.

1) No. The tax abatement is done on a per share bases:

Abatements are determined based on the value of the entire cooperative. For condominiums this total value is allocated among the eligible units and the assessed value of the property is reflected on the quarterly Statement of Account (SOA). For a cooperative development, the assessed value of the unit is calculated by: 1) dividing the entire development's assessment by its total number of shares and then 2) multiplying each unit's number of shares by that factor. The abatement is only granted to the shares of eligible residential units.

http://www.nyc.gov/html/dof/html/property/property_tax_reduc_coop_condo.shtml

The STAR Credit is not determined on a per share basis. This year it is something like $197 for basic STAR, and moe if you qualify


2) There are different ways of calculating the assessment but it must be done on a per share basis.

1 way of calculating the assessment is to take the amount of abatement received by the building, dividing by the number of shares, and making that the assessment.

Another way to do it would be to use the per share amount of the abatement used by finance and asses that

Note the 2 are similar but not the same. In the later method the assessment will be higher in a building where there are still sponsor held units

Each coop receives a list from the city detailing the amount of the coop/condo tax abatement and various STAR rebates each shareholder is to receive.
As explained on the Dept of Finance web site,it is possible for two shareholders with the same number of shares to receive different abatements, depending on the STAR rebates they receive. The STAR rebates are considered by the city to affect the pro-rata tax basis of the apartment and thus the tax abatement the apartment receives.
For most shareholders who receive the minimum STAR rebate the difference will be minimal, but for those who receive enhanced STAR rebates there can be more of an effect.

Another two cents worth:

RE STAR: shareholders all receive the same STAR exemption (about $200); this amount would only differ if an ENHANCED STAR exemption had been granted. (STAR, by the way, is an exemption -- not an abatement. It was introduced as far back as 1997 by Governor Pataki but there still seems to be quite a few people who don't realize they have to put in a one-time application to qualify for it. Only the enhanced exemption needs repeated applications since it's based on the tax payer's income).

RE THE CO-OPERATIVE ABATEMENT: This abatement is calculated as a percentage of the tax due from the building -- 25% or 17.5% depending on the per unit assessed value. However, sponsors and their successors don't qualify for the abatement; nor do any shareholders who own more than 3 apartments in the building. So if any of the apartments in the building are owned by shareholders who fall into the two excluded categories, then the building actually receives less. For example, if there are 10 apartments and 2 are sponsor apartments, then the building would receive only 8/10ths of the abatement.

SHAREHOLDERS who qualify for the abatement receive a proportion of the total abatement according to the number of shares they hold. If two shareholders have exactly the same number of shares and both also receive a standard STAR exemption, they should both receive exactly the same credit on their monthly maintenance bill.

HOWEVER, THERE ARE OTHER EXEMPTIONS. If a shareholder qualifies for other exemptions -- such as a VETERAN's exemption -- then this would add to the amount that the shareholder would receive .

THE ABATEMENT HAS TO BE DISTRIBUTED TO ELIGIBLE SHAREHOLDERS -- by June 30th, at the latest. But there is often no money in the budget to allow for that distribution because many co-ops opt to budget for the lower tax figure -- that is, AFTER deducting for the abatement. That's known as the 'net' figure. (They should really budget for the 'gross' figure BEFORE deducting the abatement amount -- because the abatement doesn't belong to the co-op. It's one of the few things that actually belongs to the individual shareholders!)

THE CO-OP ASSESSMENT. So that's why it's become fairly general for co-ops to ASSESS their shareholders for the amount that has to be distributed. That is, they credit shareholders with the abatement and, at the same time, debit them for an assessment. Boards like to do this because it's a more or less painless way of adding some money to the kitty. Shareholders see hardly any change in their maintenance for that month, even though they've been assessed.

ENHANCED COLLECTION.... Now , this is where it get interesting. If you still have sponsor apartments in your building, those apartments (see above) don't qualify for the abatement so you don't have to credit them with anything. But you DO get to debit them with the same per-share amount as every other shareholder (equal treatment for every share). So in those cases, the co-op is getting free and clear money which could be added to reserves.

THE GOOD NEWS IS ... the co-op abatements are getting bigger and bigger every year.

THE BAD NEWS IS .... the abatements are only getting bigger because they're calculated as a percentage of our tax bills that, every year, are getting bigger and bigger .... and bigger ... and...

Thank You for the detailed response, its much appreciated. I have a question: We are a small co-op 60 apartments, with 52% still owned by the sponser.
The question is - We received the abatment for some and not all resident shareholders, seems like the ones that didnt recieve the abatment credit were owners that purchased from the sponser.
Will this money be forthcoming once the paperwork is updated or will we have missed the boat per se for this year and need to realocate the credits?
FYI - My apartment was one of the three that didnt not receive the abatement and we are wondering how to proceed.

One possibility if you didn’t receive an abatement is that your purchase of the apartment from the sponsor was recent and the apartment status has not yet been changed. The Dept of Finance sends a detailed statement to a co-op’s managing agent listing the abatements and exemptions due to every apartment so you should be able to ask your management to tell you whether your apartment qualifies for an abatement in the 2008-09 tax year and, if so, exactly how much it is. Alternatively, you could phone the DOF abatement ‘hot-line’ directly at 1212 361 7099.

If your co-op is already receiving the co-op abatement, you can, individually, submit a new claim for your apartment. You can do that on-line at the DOF web site (see below). This has to be submitted by Jan 5 to qualify for abatements in the tax year starting July 1. (The city’s fiscal year starts in July whereas most people work with a fiscal year starting in January.) But, generally, management is responsible for updating information on the status of apartments; you are only responsible for applying for the various exemptions, like STAR.

If an apartment is sold to another shareholder during the tax year, then each shareholder should get a pro rata amount of the abatement because the apartment, itself, was already eligible for the abatement. However, if you buy a SPONSOR apartment, there is no pro rating. Sponsor apartment do not qualify for the abatement and the eligibility of the apartment is determined by the prior owner’s abatement status as of Jan 5 for the tax year starting July 1.

One other possibility to look at is that you received an abatement credit but the total amount of your maintenance didn’t reflect that because you also had debits.


http://www.nyc.gov/html/dof/html/pdf/05pdf/exemption_abatement.pdf

For sure, banks are more likely to give mortgages for high-percentage owner-occupied buildings.
Other than that, extreme sponsor presence can be disruptive on boards.
It's always best for co-ops if sponsors sell rather than rent.

There are many negatives if the sponsor is not willing to work with the Board for a common good. I am listing a few problems:

1. Read the prospectus or plan of conversion for rights the sponsor keeps while trying to sell units. Unfortunately, if your sponsor is not in the process of selling units nor it has any intentions of doing so, the conveniences are a sore thumb for many individual shareholders, i.e., no sublet fee paid by sponsor, no interview process for prospective buyers or renters, right to alter a unit without consent except for providing insurance for the contractors.

2. The Board does not have control over the tenants the sponsor rents to. They could be wonderful or they may not be the kind of people that you wish to have for neighbors. Consequently, you do not have input as to discontinuing a lease at the end of the term unless the sponsor has a good relationship with the Board.

2. Sponsor's renters must abide by the rules, but it all depends on your working relationship with the sponsor when it comes to violation of rules and trying to make an individual observe the rules.

3. Some sponsors do not care to renovate or keep up with the general physical maintenance of its units. Consequently, some of the sponsor's units may have serious problems such as tiles in bathrooms that are in bad conditions and leak, old stoves that may leak gas, etc.

4. Emergencies in sponsors'units may become nightmares for a co-op as the sponsor may not be reached off hours. Consequently, the co-op ends up absorbing the work that many times is not for the co-op to assume.

5. In some cases the sponsor may be consulted first in order to have an assessment or to increase the maintenance based on the annual budget. This is because your sponsor may be holding a major stake in the co-op and the maintenance may affect the spsonsor's budget and the financial position of the co-op.

I'm sure there are more reasons, but let others add to the posting.

Excellent points, AdC. Let me add another vis-a-vis renovation:

While the Sponsor may be REQUIRED to provide insurance for the contractor, the Board has no right of review of the alterations planned. Walls may be removed without the Board's knowledge; electrical and plumbing work may be performed that could alter the physical structure; and whether the proper permits/licenses are enforce is anyone's guess.

In a building where Shareholders are scrutinized for compliance, this can be a real headache.

If you are in doubt you may always call the building department and search the property for permits filed. If the walls are being taken down, and not permits were filed, you may always be the small devil by calling the builidng department and cause a bit of a problem. However, in doing so, you may have to pick up sosme of the consequences.

AdC

You and the rest of the shareholder population cannot do much to stop the new fences as the Board is in command This is probably the worse part of living in a co-op community or even a condo. You have subordinated or surrendered your decisions to the Board. This is what happens in democracies such as in ouuntry. Only your vote may change an unpopular board member (including the president) for poor decision-making.

However, you may check your by-laws to find out if you and a group of shareholders may request a special meeting of shareholders to go over the decision of the Board. If enough dissenters with the capital improvement exist, the Board may reconsider (not change) their wisdom or decision.

AdC

Boards and even bullying board presidents cannot just do anything they want. Their actions must be in good faith and demonstrably demonstrating fiduciary responsibility. Tearing down existing fences the co-op did not pay for and erecting lower-quality fences at co-op expense seems clearly a breach of this.

I think a few shareholders can band together and retain an attorney to draft a letter to the board saying that this seems a breach, and threatening a shareholder lawsuit. Often, the threat alone will be enough.

If it is not, then calling for a special election (if the bylaws allow) seems the next step. A third option would be to organize a shareholder revolt: If 50% of the shareholders withhold maintenance, the board can't just evict half the population, and would have to back down since the co-op could not survive such a financial blow.

But first, take the attorney-letter route.

The Board's argument is going to be that they are protected by the Business Judgment Rule. They're going to claim that the PVC fences are better based on some particular criterion -- maybe longevity -- and they're really acting in the best interests of the building. That's not so easy to disprove, and a lawsuit is an extremely expensive proposition in any case. See the decision in Horwitz vs. 1025 Fifth Avenue, in which the Board successfully required a shareholder to remove an awning that had been in place since the 1950s.

Although a letter from an attorney sounds like a reasonable proposition at first blush, I would guess it's just going to waste time in this case. If more than 50% of your shareholders feel the way you do, I would call a special election *immediately* and oust the entire Board. Check your By-Laws for the procedure; typically, you can call a special meeting if 25% of shareholders request it.

If the contract to install the new fences has already been signed, it's going to be more difficult.

I suppose you're right. It's maddening, though, how the Business Judgment Rule often automatically protects amateur, unpaid board members -- and I say this as one myself -- who aren't trained in running a corporation and do not necessarily make professional business judgments.

Not because of anything untoward, but because, well, the judgment and skills of an amateur wedding photographer are not what I would want at my wedding. Shareholders need a better safeguard.

I agree, JB. The Business Judgment Rule can be (and sometimes is) used to justify amateurish and ill-conceived decisions. However, it's a reasonable rule when Boards have done their homework with their experts and need to move forward without the threat of protracted litigation.

And that's a key that might be useful to the original poster. If it turns out the Board ignored the advice of their professionals -- or, worse yet, never even bothered to consult any experts -- then you have a decent argument that the decision was not made in good faith. In that case, the BJR would not protect the Board.

(For the record, I'm not a lawyer. The original poster should certainly consult one!)

Whatever your issue, transparacy is one of your tools for exposing a bad board or questionable decisions.

EMailPower works! Without persoal slights, keep an ongoing Email trail by sending Emails to the Board and any SH whose Email addresses you may have. Keep it business-like, and others will listen. Dont answer personal slights, just stick to the subject, and others will pay attention -- and no one will have a basis for leagal action. Once it becomes personal, you lose creditability (sp) Dont forget to keep all Emails... otherwise the "trail" is dead.
AliceT

AliceT makes a good point about emails and keeping personal references and emotions out of them. It's not always easy to do! But keep that paper trail -- you never know when you'll need it, even several years distant.

Thank you for all your input. Unfortunately, I have found out a contract has already been signed and sealed and the fences are being installed this week. The good news...the board president resigned abeit after the damage was done.

You rely on a competent outside engineering firm.

Any project we do in or co-op is accompanied cost and competence of an outside firm. This licensed engineering firm writes specifications, identifies RFP recipients, evaluates responses, levels bids, performs on-site inspections, manages punch list remediation and approves invoices.

As a board member, despite my background, I do not have the breadth of experience to act in the capacity of a competent engineering firm.

Yes, it is money well worth it; and it is in line with a board’s fiduciary responsibilities.

In your case heaven forbid a safety hazard arises, one has the engineering firm as backing.