This has been discussed before. Please try to search for the same topic.

One manager is okay when dealing with the beginning of the conversion in which sponsor is majority and according to the conversion plan has not totally given up his control of the management over the co-op. However, once the sponsor conveys the administration to the co-op or board, then the sponsor may retain its own representative or agent to deal with the administration of those apartments still being sold or that remain rented in the building. This agent acts of the sponsor representative and landlord for the sponsor's tenants. The agent may be a board member and interact with the new management just as any other shareholder.

AdC

I know you want to justify this but it is not legal.

In our building we have a building manager for the overall well being of the building.

We have rental units, owned by the sponsor. The quantity has dwindled from the high point many years ago of 150 units to a current low of 12 units in a 550 unit building.

The management of the rental units has always been the purview of the sponsor and the sponsor’s managing agent for overseeing rental units.

Kindly note that there is a difference (not just a nuance) in that the co-op's building manager manages the building and the rental agent manages the rental units within the building.

If there is an issue within a unit (unless it is a clear emergency, e.g.: water flood, power failure) the renter contacts the rental agent who in turn contacts the building manager.

For us it is quite clear, both for the shareholders and the renters.

I know a woman who rents in a very exclusive coop in Forest Hills and she has a different managing agent than the coop and has for many years

one pro is that , if you have one managing agent, you have more efficient and direct communicaton concerning all aspects of apartment maintenance and repairs. This makes problems that are re-occurirng in a building discovered faster.

Our building manager does not have time, nor is the building manasger paid, to deal with renters. The renters are not our co-op’s owners, but rather the lessee of the owner’s property. The legal pathway is from the co-op via the sponsor or owner to the renter, not directly to the renter.

There is NO contract between the co-op and the renter.

When a renter misbehaves or breaks the house rules, we notify the owner / sponsor. When the renter has a problem with a kitchen cabinet, the renter is advised to go to the owner / sponsor.

Why interpose when there is no legal standing?

To no one in particular, we all need to think through the legal ramifications of our quick assessments posted herein.

Can Sponsors Employ Their Own Managers?
NY Times, Sunday, March 23, 2008, by Jay Romano
quote
Q In a co-op, must the managing agent for the co-op and sponsor-owned apartments be the same?
A “This is an interesting question because it may seem, in practice, that the law on the issue is ignored,” said Andrew Brucker, a Manhattan co-op and condo lawyer. He said that under a section of New York State’s General Business Law addressing issues governing the conversion of rental buildings to co-ops, all apartments occupied by nonpurchasing tenants must be managed by the same agent who manages all the other apartments in the building.

unquote

In point of fact, HarryM, in my interpretation, is not suggesting two managers for day-to-day operations of the co-op. In point of fact, the building manager (one only) supports all “owners”. In this case there are shareholders who own and occupy and there are owners who by virtue of a contract (by-law perhaps) are allowed to lease (rent).

The coop has one manager for the entire property, regardless of who owns.

If one is suggesting that the owner / sponsor has a separate set of operating rules, maintenance, rules and regulations, etc. then I would agree that the duality is not allowed.

But if all are bound by the same by-laws, proprietary lease, house rules, etc, albeit the owner / sponsor imposes additional restrictions which the owner/ sponsor enforces on renters, then I agree there in no conflict.

and they are far more credible than you. Sorry, you are wrong. a competet managing agent should be able to handle all units in a building. Are you perhaps not competent? what is your real issue here?

In reading this thread, I am trying to understand the penchant to burden the building manager with the units of the sponsor/owners.

Forget sponsor units for a moment and ask if the co-op permits rentals by co-op owners.

Again from the notes posted by others, the thought is that the building is responsible for the well being of the entire building and all units regardless of occupancy, e.g.: shareholder, renter from a shareholder, renter from a sponsor.

My own experience is that I would agree with this line of thought.

However, I would further offer and tend to agree in reading between the lines that rental units in general whether rented by a shareholder or the sponsor pose additional challenges.

I would hope that we all agree, as has been asserted by one writer in this thread, that the legal contract is between renter and unit owner, whether shareholder or sponsor.

Further to the above points, there is one corporation that owns the building, the co-op corporation wherein shareholders and the sponsor have an ownership interest.

Thus, the building manager, whether a hired firm’s representative or the employee of the co-op has overall management responsibility for the building reporting to the board of directors.

Yes, I would agree with the NYTimes article if the article’s writer is connoting that there cannot be two managers each responsible for a segment of the buildings’ physical operation and management.

Maybe I’m dense, but I don’t see the issue if one accepts the premise in the paragraph immediately above.

However, I agree with the other points made in this thread that the interior of the co-op unit is the property of the owner, either individual shareholder or sponsor. Thus, unless it is an emergency, where life or property is at risk, any requests from a unit’s occupant needs to flow via the sponsor or the unit owner.

Quite frankly as a board member, I do not wish to accept responsibility via my building manager for responding to an occupant’s request in opposition to the wishes of the unit’s legitimate owner, shareholder or sponsor.

The rental agent, whether sponsor or unit owner, is garnering enough funds to cover administrative costs that I do not care for my building manager to accept. Nor do I wish to burden my shareholders with the costs of administering the rentals wherein shareholders and the sponsor are earning a profit.

By the way, we are self managed and have been so for many years and we have an outstanding building manager and long term employee. And let me assert that we have an excellent relationship with the sponsor and a respect for the sponsor; a relationship which is absent the extreme adversarial behavior intimated here in this thread and other postings.

It is a shame that some folks are apologists for the NYTimes and some folks need to proffer a rancor for relationships which they perhaps inherited as fostered or stoked by prior boards.

Obviously the managing agents hate this law because: it means they might have to actually do some work and have. god forbid, some accountability. . There , by LAW has to be one "entity" working with all apartments/units. Not some strange sponsor entity dealing with "bills " from rental / sponsor apartments. Clean the place fo the sponsor, have strong coop = get the sponsor "entity" OUT 100 percent. How to do it - call the exterminator - ie the Attorney General's office to rid the place of varmits (yes, they really are non-productive and parasitical). I am not being ironic here, This is serious. you want a really solid coop? Get one managing agent! it i your right.

Folks,

In our co-op, a proxy holder is merely allowed to submit a ballot for the election. A proxy holder, unless a shareholder,does not have the right to address the board or to address the shareholders present. But, see further below.

In an election year for board members, those running for the board are invited to make a three minute statement before we close the time for submission of ballots.

During the "open" board of directors meeting, we do not allow shareholders to address questions to the board or to make statements to the other shareholders, save the “election” statements above.

After the “open” board of directors meeting is closed, we then have a new session the same evening called the “open” shareholders meeting. Herein, any shareholder, and only a shareholder, may address any questions to the board or make any statements to the shareholders present.

...does not seem to address the fact that a proxy can VOTE for one candidate or other, presumably for the candidate preferred by the shareholder who cannot attend.

This seems like another case of a dictatorial, authoritative board refusing to honor the simple, democratic process on which the United States lives: One person, one vote.

This board belongs in the Stalinist USSR. That's how it's acting. Shame on them.

Perhaps I did not make myself clear. The voting is an issue but the BIGGER issue is the fact that the Board voted to overturn a ByLaw (it takes 2/3 S/H vote to change bylaw).

The ByLaws are a CoOps Constitution, and isnt it the legal responsibility of the Board to abide by and support the ByLaws.

Futher complicating the problem, the S/H whose proxy was denied, has been very vocal about an issue not popular with the Board. And it would be convient not to have his vote counted.

Recours?

Now that there has been a bit of an explanation, let offer the following.

In our co-op, we have never changed the by-laws, but we are contemplating a change in the next year.

In this case, our by-laws stipulate that to change some sections of the by-laws, one needs 2/3 vote of the number of units (610 * 2/3 = 407), while for some changes 80% of the shares outstanding (80,000 * 80% = 64,001) are required to vote in favor of the change.

So as to one person, one vote, it really depends on the co-ops bylaws, e.g.: person vs. shares.

For the forthcoming by-law amendment, we will accept written proxies from all shareholders. In point of fact, we will mail a proxy to any resident requesting the proxy in advance of the vote. We will have a three or four day period to provide ample time for the residents to vote. As long as the proxy is signed, the board accepts and tallies the vote.

The board and a significant number of residents are in favor of the change, but we are unsure as to whether we will achieve 80% as required for the change proposed.

Again, one must be clear that having a proxy submit a vote and having a proxy make statements are two different events.

We will provide a recurring number of forums to discuss the issues attendant to the rule change. We will even allow residents to invite a family representative to the discussion seminars as some residents may not understand the import of the proposed rule change, but when the voting dates are set, the proxy is to be cast without any dialogue.

Your co-op and your board may operate differently, but as long as the rules for voting are followed, there isn’t much to say. One may question the behavior of the board, but if the board acted within the board’s stated rights, the vote stands.
= = = = = =
To be a bit pedantic co-ops are corporations and have duly elected boards of directors. Thus, boards are empowered to act within the by-laws established for the corporation and within the boundaries of fiduciary responsibility.

Dialogue is nice, but the board need not adopt the vox populi, if the board opines otherwise.
= = = = = =

On the other hand, one can lobby to submit candidates to replace the board at the next election.

= = = = =
Here is what happens when a co-op attempts to change the rules and applies the wrong equation:
http://www.anateisenberg.com/files/400519/bergen-county-news-Jun2006-4.html
Scroll to the paragraph:
Law On The Side Of Cliffside Park Residents
The details are scant, but do search some more.

= = = = = =

Dear Ethel, This is not about CHANGING an ByLaw. The Board voted to ignore an existing ByLaw that clearly states that a S/H may appoint a proxy to represent him at the S/H meeting. We have had proxy's attend meetings for 20 years.

The ByLaws cannot be overruled by the Board. They are the Coop constituion and can only be overruled/change by 2/3 vote of the S/H.

Also, the issue the absent S/H wants to vote on, is unpopular with the four Board members who decided to take this illegal action.
AliceT

Folks,

Unless the by-laws stipulate, I don’t see how anyone much less a proxy has the right to voice an opinion at the co-op’s board of directors meeting save voting for or against a proposal or voting or withholding a vote for a candidate in accordanced with the shareholders wishes

See this URL, which is a “voting” form:
http://www.thebrownboard.com/og_mb_ups_coop_exhibitg.pdf

See this URL which discusses the participation of the proxy as a voter:
http://www.nytimes.com/2006/04/02/realestate/02home.html?fta=y

In my view and my interpretation, proxies are for voting not for dialogue.

If the referenced co-op permitted dialogue at prior board of directors meetings and then suspended the ability of shareholders or proxy holders to offer commentary at this meeting that is the board of directors’ right subject to a caveat or two.

If the by-laws permit the dialogue and the dialogue is suspended, then the board is wrong.

If it was just a historical amenity or convenience wherein the board of directors permitted open discourse, then the board has the right to suspend any dialogue. One may be agitated by the board’s change of agenda, but there is not much standing to force the board to again allow open discussion.

It seems to me that the crux of the interchange herein is that a co-op board enacted something that some shareholders don’t like and if I read correctly disallowing a vote cast via a proxy.

The only option is to judge whether the board failed in its fiduciary responsibility in which case there is legal recourse.

For instance, if the board refused to accept the legitimate proxy of the opposing shareholder, then that could be a rationale for legal recourse.

The other option is to vote to replace one or more members of the board at the next election.

Again, voicing opinion other than by “silently” casting the proxy vote (for or against) is the legal extent of proxy’s participation.

- - - - -

After all is said and done, if the board refused to accept the shareholder’s vote via the proxy, then the board is wrong in the eyes of the law.

If the board of directors failed to provide printed proxy statements or the ability to create one’s proxy statement, see URL sample, then the board is wrong.

Thanks for feedback.

To reply to one question, it is the house ruler that prohibit the distribution of any materials directly, e.g. without going through the US Mails.

In addition, those running for public office are not permitted to distribute items on premises.

As a matter of fact, some politicians visited our outdoor pool area a few years ago and the residents complained. Thus, there are no more solicitations at the pool.

Yes, there is a bulletin board where residents may place postings.

And for further clarification, the existing board does not solicit in the lobby, mailroom, hallways, etc., or via materials under doors ... and as far as I know, the existing board has never used public handouts or materials under the door. So, there is no precedent to use as leverage.

The board's mantra seems to be "quality of life" is paramount. Thus, outdoor athletic court lights are deactivated at 10 PM, and there is no construction of any type permitted in any unit, or even in the common areas of the building or property, outside of Mon. to Fri, 9 AM to 5 PM. These no-noise restrictions are imposed on the eve of religious holidays.

Dear Rob, sounds like they dont want new members. We resorted in mailing out letters. Also, we now have an extensive Email list, and have become a fairly powerful group who forced the Board to make changes. (firing a Super that was caught stealing, but Board members protected)...
Good luck... AliceT

mail it. spend the money. However, in reality they cannot stop you from putting notices under doors. Also you can stand in the lobby and meet and greet people and hand them a flyer and bio on yourself. go for it!!

Yes, I did put something under the door of a resident and a complaint was made to the management office. Then, I received a letter from the attorney that my lease could be terminated if I put anything under the door.

This is why I put a question here.

my friend,

you clearly has an A-hole on yoru Board if youa re gatting a lawyer's letter onver such a trivial thing. you need to get on your coop board - you really do. for the record, it is important you respond in writing to to that letter claiming that the Board puts noticed under doors (didnt you say they do this?) and citing freedom of expression rights. i do not think they can impose such a restrictive law. It sounds ridiculous. You can also call NRDC to check on this.

About four years ago we decided that the hassle of continuing our HUD insured mortgage was not worth the effort, e.g.; special accounting forms that cost us via our CPA firm, reserve fund under control of HUD, numerous clerical errors by HUD, etc.

However, we were not really refinancing. All we wanted to do is rollover our existing mortgage without extending the life of the mortgage.

So, we contacted a number of banks and asked what it would take to convert, e.g.; interest rate, balances, relationships, etc. Oh, we did decide to seek a line of credit and asked for the terms as well. The line of credit is employed only to finance capital expenditures before the yearly assessment replenishes the coffers.

Then based on the terms, our board selected a bank and we converted, closing the HUD guaranteed mortgage and obtaining a new mortgage ending on the date of the original mortgage as well as the line of credit. Our outside counsel handles the transaction.

= = = = = = = = =

Now a nearby building had a $7,000,000 mortgage when they converted to co-op 25/30 years ago. In turn, they refinanced the mortgage to $10,000,000 and extended the term. About a year ago, (we can speculate as to the financial acumen of the board of directors), they found themselves in dire straits and needed an infusion of capital to underwrite long neglected capital projects, e.g.: roof, window replacement, driveway replacement, etc.

So they went and a refinanced a second time (third mortgage) and in doing so, they were required to pay off the second mortgage, about $7,000,000 remaining, pay a prepayment penalty of $2,500,000 and then the bank required $8,000,000 of the remaining proceeds to be placed in escrow, only to be released by the bank for authorized capital projects.

So poor management (e.g.: bad decisions by the board of directors) put the building into such a predicament that the bank is now essentially calling the shots.

So just a word of caution in any “refinancing”, ya need a long term plan to eliminate all debt. For a product producing corporation, capital infusion equals new product equals more income equals paying off the debt. In an apartment building, there ain’t no way to build more apartments to obtain more revenues.

You can easily figure this out yourselves. For a start, call National Cooperative Bank. They offer very good deals and specialize in this area. Get some ideas of figures, then call some other banks. . Also you can Google National Cooperative Bank for more info.

National Cooperative Bank : Cooperative Housing Specialist:
New York: Mindy Goldstein
(212) 808-0880

your posting is completely wacko. ok first of all - ss numbers should not be on any list. what are you asking exactly?

Your annoymouse posting is out of line. skip your editorializing and just answer the question, or skip your response.... Also no annoymouse postings!!!

It's just my opinion but why be concerned with the Patriot Act unless you have reason to think that SHs in your coop are involved with terrorist groups or activities?

Your proprietary lease says what documents your SHs are entitled access to. They generally are allowed to the SH name/address list as long as they act in good faith and intend to use the list for a valid coop purpose. But SHs' Soc Sec numbers SHOULD NOT be given to anyone at any time.

It's easy enough to find out what SHs live in a building by looking at the doorbell or mailroom directory. Some coops send all SHs a form and ask them to indicate if they do not want their phone numbers and/or e-mail addresses given out. Some coops send a form to just non-resident SHs and ask if they want any of their info left off a SH list that may be given to other SHs since they live in other locations. We all still have our right to privacy.

Can't understand why anyone would want such information on shareholders to be MORE readily available. It would be interesting to find out from the orginal poster why he asked this question.

If your Super is doing any of this on co-op time, when he or she is acting as your paid agent, this could be a liability problem.

If it's being done on his/her own time, there could still be problems...

BTW, do your House Rules or Proprietary Lease address the issue of permits and licenses?

Contact your co-op counsel about this issue ASAP.

Where is your management company? They should be taking care of this for you.

I agree with your letter to the residents regarding medic alerts. Those who have it should be thinking with their family members how they wish access to apartment to be handled if they trigger the medic alert. The co-op should not have an involvement as this is a "private emergency call" for a shareholder, but is not considered an emergency for the co-op.

AdC

I am appalled by the inhumanity of the above two forum posters.

They speak about not wanting the co-op or condo to be responsible for elderly neighbors, for fear of liability.

Yet they know very well that any competent attorney can fashion a simple form that removes that issue.

These forum posters simply don't want old people around. Old people may not aesthetically pleasing. They may, god forbid, need a hand to get across the lobby, or to get their groceries up the elevator.

Of course a frail older person wants the building staff to have access, and to be the contact person who calls for help. The building staff is there 24 hours. Friends, relatives, other neighbors may not be.

Jesus, how hard is it to call 911 or to give a freaking key to an EMS worker?

The liability issue is a smokescreen. A lawyer can create a form that frees the co-op or condo of liability.

But nothing frees each of us from the simple human responsibility of taking care of our neighbors.

I hear you.

I’m really encouraged by the dialogue, despite what one may infer from my comments.
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But, allow me to regale you about life in the insurance industry as we have experienced it
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We had a long term resident trip on the carpeting in out hallway. It is perfectly good carpeting, installed on all floors, in all hallways and well maintained. Resident sued, and insurance company paid without fighting it.
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We had a resident trip on the sidewalk outside the building because an acorn fell from a tree, maybe not even our tree. Resident broke a wrist. Resident sued. Insurance company paid.
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We had a resident who parked in our garage for many years in the same spot. One day the resident tripped when walking away from the car. The parking deck is perfectly within specifications. The resident sued. Insurance company paid.
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Why do insurance companies pay? The answer is they do a cost benefit analysis and determine the cost of paying vs. the cost of fighting.
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But then, our insurance experience file showed a number of “liability” payments. And our carrier cancelled our insurance. Assigned risk, here we come.
,
What do you folks think will happen if a resident’s medic alert sends an alarm and there is delay in gaining entry to the resident’s apartment because our folks (security, doorman, etc.) are 10 seconds late (yes, try and prove 10 seconds) and someone’s survivor sues?
.
As fiduciaries, we cannot allow our other 499 shareholders to be put at financial risk by a major insurance claim, not to mention the erosion of time for our highly paid board members. We pay our board members $00, twice what other buildings pay, but it still does not cover their “costs”.
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Our position is that we cannot be the penultimate respondent to a resident’s medical emergency.
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Thus, we are about to publish a letter, with essentially the information contained my original posting. If that is the form which the counter view herein poses as a solution, so be it.
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Our next step is to put the letter in our admissions package such that every buyer signs the letter.
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And I need to ask what “form” would our attorney draft other than the letter that would emerge from my posting?
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Yes, I am very empathetic to the needs o the elderly. That’s why I moved my father, now 92, to an assisted living facility in NJ from his condo in Florida. A year ago, I moved him to a nursing home as his physical prowess declined.
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Why an assisted living facility and now a nursing facility? We’ll because they are accredited to provide a certain level of service. One may argue whether they meet the commitment, and my response is that in my estimation they do.
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By the way, he has the clarity of mind to assert that he could have changed world history, maybe spent a few years in jail and perhaps ruined the family, while in prison. After all, he was the NYC police department assigned bodyguard for Fidel Castro, upon Fidel’s first visit to NYC, when he stayed at the Hotel Teresa in Harlem. Fidel offered him cigars, fried chicken and brandy
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Again, I need to repeat that we are not a nursing home or an assisted living facility. Nor are we a warehouse where children can warehouse the elderly to avoid their responsibilities in this day and age when our adults are living longer, albeit curtailed life styles. We are not Florida with endless senior citizen warehouses where parents are stockpiled by Northern children until their next dutiful visit in nine months to a year, unless death prevails sooner.
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Perhaps we can charge an extra fee for being responders to medic alerts. After all, responding, regardless of situation, its not in our proprietary lease, our bylaws or house rules. After all, why should all residents underwrite the costs of the few?
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But can you conjure the liability insurance we would incur for failure to provide an agreed and paid service.
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Folks, it’s a litigious word and as fiduciaries we cannot place our shareholders at financial risk
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Perhaps, we should sue the children of the resident needing assistance for failure to provide adequate care and for endangering the life of elder dependent.

.

A well reasoned point of view and an interesting story about your father but still, you must admit, somewhat cynical and at base, detached. If we are not our brother's keeper, a nursing home will be.

ANYBODY in the building can sue over a trip-and-fall case. You're simply singling out older people. (I'm not one myself, nor have I an older friend or relative in a co-op, nor am I a lawyer, so I'm speaking as a disinterested party.) It sounds like nothing more than resentfulness that other adult children DO NOT follow lockstep with you and put their parents in a facility. That's fine for some families, but the way you do it is NOT the only way and wasn't brought down to you in tablets from the mount.

And that whole story, who knows whether it's true, advocating the assassination of a foreign leader we disagree with but with whose country we are not at war? The only relevance I can see to that tangential tale is that, taken together with your attitude toward older residents, shows a remarkably cavalier attitude toward the lives of others.

D, it's not about wanting to get rid of elderly residents -- no one ever said that, and I think you are jumping to conclusions. What's so wrong about requiring those who use a medic alert service to list neighbors, relatives or friends as a contact rather than automatically assuming the building staff is ready, willing and able to let police/EMS into their apartments?

Our building does not have 24-hour doorman coverage, but we do have an older resident who uses a medical alert service. She has a sibling who lives 30 minutes away but who cannot or will not be involved in any aspect of her care. She was recently offered a space at an assisted living facility but turned it down because she wouldn't be allowed to smoke or to use her mobility scooter there. When our older resident falls out of bed in the middle of the night, the only way the police can gain entry to the building is by pressing buzzers until someone lets them in.

Thank you, TedNJ. I will propose to our board that this older resident provide a neighbor or nearby friend as her medical alert service contact.

Very well said, Disappointed.

As a building Resident Manager, I am asked by some of my older residents about responding to the medic alert. I tell the residents that it is fine with me if they would like to put my name and number down to check on them. I think some of them don't have anyone (family members) who can check on them.

...to the resident manager above, who behaves like a reasonable and decent human being.

Ted,

I think that the only type of activity that we prohibit by way of stuffing papers has to do with outsiders, i.e., restaurant home deliveries who end up putting menus, politicians who gain access to the builidng, etc.


My opinion is as follows:

If the House Rules and By-Laws are silent about stuffing mailings under doors of shareholders for co-op elections, why would a board object to such an activity if it promotes elections within the building?

I would say that boards should promote independent election committees for the promotion of ALL candidates prior to the annual meeting. Similarly, information nights in lobbies, meeting room etc. should be held well in advance so that shareholders may have an opportunity to exchange ideas with prospective candidates for a better informed decision on the part of the shareholders. These committees may help pre-print a ballot for those who would like to vote by proxy.

Finally, if a board has not done the homework to form election committees, then it should collect proxies that will guarantee annual meetings. At least, shareholders may be able to submit their names from the floor at the night of the meeting and at least have the opportunity to be elected.

In our case, the co-op counsel and independent auditor count the ballots and destroy them once tallied.


AdC

Some questions:

How was the independent auditor selected?

How costly is an independent auditor?

Any recommendations for where our building might find an independent auditor?

Thanks!