It sounds like you have the the potential for a conflict of interest, but the transparency you described probably minimizes legal problems with the setup. A way of getting around the auditor issue is to have the board member/MA *propose* the auditor, and then the rest of the board reviews and votes to approve or reject. That way the auditor selection is owned by the entire board and not a single board member.

I am not a lawyer.

I live in a coop with a cats only house rule. I have 2 cats as allowed by the rules but have become very depressed due to many factors, most of which stem from my unhappiness with living in this coop. I can't move for the foreseeable next year due to financial reasons. I have spoken to a therapist and received a letter stating need to get a dog and I'm sending it to the board via management company before heading to shelter to adopt dog. Is there ANY reason board can try to use to deny my right to a dog? Can they make excuses about noise, etc to try and make me get rid of dog? The management company of my coop is extremely uncooperative and I know they will try any excuse to deny me so I'm just trying to head off any problems. I have addressed a letter to board with a copy of letter from therapist stating my need prior to adopting. Any thoughts appreciated.

Sorry about my dog post. I meant to create new conversation.

Because of recent abuses of "support" animal rules, the government is trying to come up with a set of standard guidelines to differentiate between "service" and "support" animals, and how each integrates into the Americans with Disabilities Act. Assuming that the your situation meets whatever regulations are in place, I don't think the co-op/MA can deny you the support dog. What the might try to do is demand you get rid of one or both of your cats because the dog will be a replacement.

It sounds like having the support dog is very important to you and I understand your apprehensions. Because of the ambiguities surrounding support animals, I suggest you contact an attorney who specializes in ADA law to find out exactly what you are allowed and what the co-op/MA is permitted to do. If nothing else, knowing definitely what is and is not permitted will lessen your level of anxiety and apprehension.

You might want to explore putting your reserve funds into Money Market (MM) or Certificate of Deposits (CD) before getting involved in the complexities of Treasury bonds. MMs and CDs are each insured up to $250k so there no loss of principle. Depending on how frequently you estimate you will need to draw on the funds, you can look at on-line "internet" banks or local brick and mortar banks.

If you're in NYC, I can make a recommendation. Bethpage Federal Credit Union. They were originally Long Island only, but have a full service branch in Chelsea on 26th St. I used them for personal banking long before becoming my Co-op's treasurer, and opened a business account with them for our reserve funds. Here's the link to their business banking department: https://www.bethpagefcu.com/business.aspx and the link to their business account rates https://www.bethpagefcu.com/rates-calculators.aspx . BFCU Money market is paying 1.75% and you have immediate access to your funds. CD's are tiered based on length of time. They were a little slow raising their interest rates compared to other banks, but in the past year the latency has decreased.

I've been with the BFCU (personally) since 1974 (I'm an oldie but goodie) and never had any problems or fund security concerns. They're one of the largest credit unions in the country.

I would invest in Ally Bank, CD's are going for over 2.% and the Feds will be raising interest rates again. Your board can also get a Ally Bank Savings Plan this will be going from 1.90% to over 2% and the board can withdraw the money right away without penalty. Also you can consult your account who can advise you the best for your board. Best of Luck

PC #1 - That's why I recommended Money Market over CD in today's environment. All indications are that interest rates will be going up in December and 2-3 more times in 2019. If you invest in a 12 month CD, it won't benefit from any of these rate hikes. MMs, on the other hand, are more liquid, and banks will increase interest rates to stay competitive during the 12 month cycle.

Of course, how important all this is depends on how much is being put into the MM or CD. If the principle is in the $25k to $75k range, an increase of 50 basis points (0.50%) to 75 basis points (0.75%) over 12 months won't make much difference. But if the MM/CD is maxed to the FDIC limit ($250k) or more, even small interest rate increments have a noticeable effect.

Does Ally offer business accounts? When investing co-op funds, they really can't go into a personal retail account. Chances are no one will find out, but at the very least the individual who owns the account will be taxed on the interest income, and they will be legally liable for any unauthorized withdrawals or other questionable activity. Board members are fiduciaries, and it's not a good idea for fiduciaries to have personal ownership of corporation funds.

Yes to your question Ally offers business accounts, also you can spread your money around to money market companies. Like Charles S. if you have more then $250,000. Steven board members don't have access to these accounts only the board treasure /managing agent who approves bills/pays them. Board of directors safe guard these accounts with 2 signatures if needed. These monies will be safe after the board Treasure shows the monthly expedisures at monthly board meeting and explains/shows what was spent or earned that month. Have a great Thanksgiving

Thanks PC#1. The very same to you, and to the rest of the participants in these forums.

I agree with severely limiting signatory privileges on all reserve accounts. In our board only the president and treasurer can sign for withdrawals or transfers. We don't give withdrawal privileges to anyone who is not a board officer, including the MA. The number of withdrawals from a reserve fund should be minimal, in most cases one or less per month.

IMHO, the reserve accounts should only be used to increase the balance of the operating account if a large expense is anticipated or due. There shouldn't be any direct disbursements to any vendors or suppliers or taxing authority, etc. If direct payments are made from the reserve accounts, bookkeeping and auditing become much more complex. It also becomes more difficult to trace fraud or embezzlement. At least, that's the process we use with our reserve fund.

This is kind of a squishy questions, but from the way you describe it, I would say the new shareholder's apartment can be considered as his primary residence. I assume that the new shareholder closed on the apartment and is now the shareholder of record. Many new shareholders renovate before moving in. This doesn't preclude the apartment from being their primary residence and where they're living now is a temporary domicile.

If you have concerns, ask the new shareholder to provide the board with a notarized letter stating that the apartment is and will be his primary residence. If he turns around and sublets it or uses it as a pied-a-tier, you can always vote him off the board.

If you have serious concerns, ask the board's attorney if the new shareholder qualifies for board membership, or what he would need to do to qualify.

I agree with Steven that the buyer owns the apartment since he closed. However, that doesn't necessarily prove that it's the primary residence. It just means that he bought the apartment.

As Steven suggested, you can ask for a notarized letter. My preferred method of showing primary residence is a driver's license that has your co-op's address on it.

I would ask the buyer to show both the notarized letter and the driver's license. If the buyer presents both items to the Board, then that would satisfy my primary residency criteria.

With all due respect to the gentleman that suggested he would accept a driver's license reflecting the building's address to evidence a "primary residence;" one can visit most any local NYS DMV office--advise them of a change of address--and easily obtain a second driver's license. If one wanted to be exceptionally clever, one could claim that he/she physically lost their driver's license through misplacement--inform them of a different address--and obtain a new driver's license reflecting the building's address. Thus a driver's license with the building address is not exactly the best means in which to accept proof of a primary residence. If the Board can obtain information from a mortgagee (bank lending $ for the loan) that will support whether it is a primary residence of 'second' home (or investment.) But, leaving it to a clever shareholder is ludicrous; no disrespect intended.

No offense taken Throck. You make valid points.

Just some random thoughts
They closed 3 months ago and haven't moved in yet? Are the renovating so they can move in? What were their projected intentions when they purchased and interviewed?
Why is this important if they are intending to be full time residents and just have not moved their bags in yet? It sounds more like you (or someone) wishes to deter him and using this an cause.
If this is true, and in my opinion justifiable since someone should be a resident long enough to understand and know the buildings climate, challenges and characteristics enough to be able to contribute to it, they should be informed directly of the concerns and encouraged to run next year when they are a bit more seasoned.
If the concern is truly that they may be an investor on the board, then possibly state that directly also.. I say all that because it is always best to be upfront with intent and reason as not to cause animosity and a foe down the line. ...

Never heard of this for a coop or condo unless you want to improve your home. Our coop has a 30 year mortgage which some was used to get new elevators and boiler the rest was used as a cushion. HELOC is not tax deductible and it does not cost you money to fill out an application. I world have a lot of concerns and questions about the dealings of your managing agent. Your board needs to seriously change agents he/she sounds shady. I'd also have your accountant double check your books this managing agent sound like he/she needs money. What is the name of you managing agent? So we can rule them out. Let us know what the end result is. Best of Luck

As a managing agent, I look at the whole picture and do require Shareholders to fill out a simplified financial statement form.
In most coops, I have moved the 80% LTV to 75% because of volatility and ensure this will be maintained if any LOC is maxed out.
We run credit, ask for current income verification and ensure stability.
We charge $50 for the credit, and 250 for the app, which is more industry standard and includes any bank questionnaires, etc that need to be filled out and submitted.
As opposed to purchasing, other questions such as "why?" come into play because it would concern me if they were financing their lifestyle that may be in a deficit..
But at the end of the day, if there's tons of equity and you maintain leverage, you can afford some leniency if needed.
In essence, you do need the whole picture.
~AR

PC#1, I think Muddled was asking about HELOCs for individual shareholders and not for the co-op corporation. That's the impression I had from reading the first part of your reply. I apologize if I read it incorrectly.

That being said, I agree that $1,150 is a very excessive fee to charge an existing shareholder for a HELOC review. I could see charging maybe half that amount for a new purchaser review because such reviews require a detailed analysis of the purchaser's assets and liabilities. But a HELOC? Very suspect.

Keep in mind that the shareholder already has a fiscal history with the co-op. Do they pay their monthly maintenance and any assessments on time? Have they ever asked for any special financial considerations? I'm assuming the shareholders haven't given the appearance of any financial distress, so the board knows they're reliable and good community members.

When we do a HELOC review, it's usually the treasurer who does it and not the MA. When I did the reviews, all I really needed was enough financial information to verify that the shareholder's mortgage+maintenance+HELOC monthly payments did not exceed around 35% of their annual pre-tax income. I may ask for a few documents like paystubs to verify income and employment, disclosure of any new, non-discretionary debts (large loans, divorce maintenance and child support, things like that) but not nearly the level of financial information the MA is requiring.

To me, the giveaway that the MA is price-gouging is the request for references. WTF? This is someone who's lived in the building, and the quality of their character should already be known to the board. You might ask the MA why they are requesting references and what their purpose is.

Two additional points. It's a pretty well-known tactic of some MA's to lowball their monthly fees with the expectation that they'll make some of it up in nuisance fees like excessive shareholder chargebacks. Before doing or saying anything, check your contract with the MA to make sure the fee wasn't specified in a rider to the contract.

Do not accept a bank's approval of a mortgage or HELOC as verification of the applicant's financial soundness. Remember what happened in 2008-2009 with no-verification and liar loans. There's been talk that this behavior is starting to appear with certain institutions. Due Your Diligence.

Good luck!

Thank you Steven424 for clarifying this for me.

Thank you Steven424 and People's Choice #1. Yes it's a personal HELOC, not a HELOC for the co-op. I'm not sure the managing agent is being dishonest. I think they are trying to get a fee for an unnecessary service, and have gone overboard in requesting documentation. That said, since a HELOC is a line of credit, not a loan, Steven424, there's no way to complete your calculation. And even so, why would a Board want to deny a HELOC to, say, an aging shareholder who's got millions of dollars in equity but only social security to pay his bills? Unlocking that credit avoids an apartment falling into arrears and avoids a premature sale of a property, both of which could lower values of other apartments. The 2008 crisis had nothing to do with this. That was about single-family homeowners who took cashout refis, or who bought using exploding ARMs and thought they could flip before the market crashed.

In my building we do not give out residents personal info. Unless the resident says it's okay. I instruct my staff if a resident requests another resident's info, the resident requesting should leave a telephone number or email address and my staff will give to the resident to contact them if they wish too.

Mike MacGowan, RAM, NYARM

This article appears to be on-point for your question:

https://cooperator.com/article/a-board-beholden/full

Have you asked your insurance carrier why loss assessment coverage was denied? If so, what did they tell you?

Yes, Steven, I did. They said they don't cover pools and that water damage, a pipe bursting, man-caused or not, was not covered. The pool replacement is part of now a bigger issue, the bulkhead and patio, both condemned, which we must replace, even if we don't replace the pool. And the building is now suing the insurer, since we believe we should be covered. Wondering if the Board can rewrite the assessment stating it's just for the bulkhead and patio.

Those restrictions sound pretty... errrr... restrictive. Any way you can look up what your coverage included in your originally policy documents.

I live in a co-op so a comparison to a condo is not really valid. I never considered what my exclusions are, and I'm going now check. My policy comes up for renew next month and I checked how much loss assessment I had. $1,000. Again, coverage may be different between co-ops and condos.

You might want to go to another insurance broker and get a competitive quote. During your discussions, ask them what their loss assessment covers and what is excluded. At least you'll know if what you're running into is industry standard or just your coverage underwriter.

Good luck

I'm going to check with USAA for a comparison and definitely ask what is an isn't covered. You should upgrade from the standard $1000 coverage which normally comes with most policies, consider your deductible as well. My neighbor has $1000 coverage, but her deductible is $1000 so that is a wash. My $10,000 coverage only costs me $5/month, peace of mind, which I still think is worth it, should something else occur.

Would love to hear from those that have used their loss assessment coverage. I live in a coop.

This is a health issue and needs to be reported to the proper authority, call 311 ASAP. Sounds like the owner is breaking some kind of rules in your Condo and can be forced to move.
Now for my question. Where is your managing agent? If you have one get a new one. This is your managing agents job to guide you in such manners and your lawyer. It's also time to search for a new managing agent. Search the Habitat for Managing agents, they have one issue each year that rates and gives a lot of info. on each agent. Let us know what your out come is. Best of Luck

If you are a condo 311 does NOTHING- You have to take the unit owner to Supreme court. If you are a coop or rental , it's easy, not so for a condo. You own the unit with a deed and the rules are different. WE have been in contact with a lawyer, arbitration , according to our by-laws might work, but if the unit owner is not willing , Supreme court IS THE ONLY OPTION from wht we are told. We found a lawyer how can speed up a court hearing within a month. The good thing is all the lawyers fees according to our by laws will be billed to the affending unit owners account.

A bad credit can be a hell of a nightmare. But i was soon awaken from that nightmare when f i r e w a l l b r e a c h e x p e r t @ g m a i l . c o m removed my inquiries and all derrogatories i had all thanks to a colleague in my programming team who introduced me him. I as a programmer sure knew it could be hacked but didn't know how to or who could get the job done, and trust me i tried and even contacted a few connects i had who claimed they could but failed not until recently when my colleague called me at the middle of the night about how her credit score was raised by this same hacker. You can guess what i did. Emailing him was the best i ever took in my life. What a life.

You'll need a good quality speaker phone to set up in the room where all of the on-site individuals are meeting. It should be a quiet space with carpeting and other sound deadening material, if possible.

As far as your remote dialers, if there is only one individual, she/he can directly call the line with the speaker phone. If there will be a number of people who are connecting remotely, contact your phone company. Most of them have conference call services they can set up either for free or a nominal charge. Your remote callers will be given an 800 number and a PIN. They dial the 800 number, enter the PIN, and are connected to the conference. The speakerphone in the conference room will be the moderator and will also dial into the 800 number with a different (moderator) PIN.

Hmmmmm... Let's see. An unidentified loan officer working as a shill for a "great hacker" tries to scare the crap out of me by raining down the ten plagues of FICO... unless I take his miracle cure.

But wait, there's more! The miracle cure only works if I mention the unidentified loan officer, whose name is conveniently missing, and impossible to list as a reference. And impossible to trace.

Yep! Definitely! Someone I would absolutely trust with my social security number, net worth statement, bank and investment account numbers, first born child.

Steven - Let's also not forget the impeccable grammar of the author. Get this deal while it's hot.

NOT!

If nothing else, the Dear Hacker is prolific. Put "PYRAMIDEYE.HACK" into Google and prepare to be amazed!

But you know, I really need to be very careful about this. "Pyramid Eye" is one of the great signs of the Illuminati. Check out the back of a $1 dollar bill. With Halloween coming up and all, I may end up riding around as the Headless Board Member.