My experience with assessments is that your statement is correct. Everyone must be assessed at the same rate, which is usually done on a $$ per share assessment.

Assessments are used to raise a certain amount of working capital to cover either an existing or anticipated expense. It is calculated by taking the amount to be raised, divided by the number of co-op shares, divided by the number of months over which the assessment will be levied. Period.

There is no logical or fiscally viable reason why a board should knowingly reduce the amount of money an assessment brings in by offering <b>any</b> sort of a discount or reduction.

At the end of the day, the full amount of a properly calculated assessment will need to be raised. If a 5% prepayment discount is offered, and every shareholder prepays, where will the last 5% come from? Another assessment? And if only some of the shareholders can afford to prepay, there is no faster way of pitting neighbor on neighbor than the appearance of financial favoritism, legal or otherwise.

Prepayment discounts on assessment obligations is a very bad idea.

If the prepayment avoids the building borrowing money for a portion of the assessment, thus lowering the interest charged to the shareholders (b/c if an assessment is happening, it is likely to be paying back a loan), why wouldn't a discount be offered?

In the outlier scenario you describe, your only choices may be a 2% LoC draw or a 2% bribe. However, in my humble opinion, if a co-op has so little money in it's reserve accounts that they are forced to use their line of credit to initially cover an unanticipated expense, then the co-op has far greater fiscal issues than whether or not to offer shareholders an inducement to advance the money.

They way this is *supposed* to work is a co-op maintains a minimum of about three month's worth of maintenance income in their reserve account. If the co-op get hit with an unanticipated expense, the reserve funds are used to cover the expense. Then, the board imposes an assessment to replenish the reserve account in an orderly manner. The LoC is untouched and there are no unnecessary interest payments.

The reason it's *supposed* to work this way is to avoid the exact scenario described here. Whether the LoC has a 2% interest rate or the co-op offers a 2% prepayment discount, the co-op is still short 2%. With the LoC, all shareholders equally share the pain resulting from poor fiscal management. With the prepayment discount, the class of shareholders who can afford to prepay the assessment reap the advantages while the class of shareholders who can't afford to prepay are penalized.

This scenario is akin to a firefighter trying to put out a blaze before the hose is connected to the hydrant. If the fire truck doesn't carry some emergency water, nothing's going to initially come out of the nozzle. If the co-op doesn't have any reserve funds, they'll be forced to borrow money to cover their emergency, either from the LoC or from shareholder largess. Either way, they'll be paying more than they have to.

Sure, but lecturing folks when they are in the midst of an emergency repair situation is not helpful. Clearly OP hasn't given the full extent of the situation but, if it is the case that a coop need an LOC draw in order to make a repair, then it is what it is. No one is short 2% since you only borrow the money that is needed (essentially the shareholders that need to loan the money) and that amount is shared amongst those who did not pay in advance. The interest cost is not incurred if the money is borrowed so there is no "2% short" as you describe.
"With the prepayment discount, the class of shareholders who can afford to prepay the assessment reap the advantages while the class of shareholders who can't afford to prepay are penalized." And this is completely fair if ALL shareholders are given the same opportunity to prepay at a discount or borrow over time. Folks who pay upfront lose their foregone interest earnings on the money. If I know I have to pay a 12,000 assessment over a year and can earn >2% monthly after tax, I would not pay upfront, even if I had the money. You wouldn't make this argument against increases in maintenance payments if a set of shareholders could afford it and another set could not.

Let's say there is an emergency assessment and the Board uses a line of credit and pays 2% of the loan in interest monthly which determines the assessment per share. If a shareholder were to pay in advance, why should they pay the interest? Every other shareholder is taking out a loan via the Board while some shareholders can choose to not take the loan out and thus be discounted the cost of interest on the assessment. Charging them the same assessment would advantage all the other shareholders over the one who paid early by lowering their interest costs at the earlier payer expense.

You should be able to view them separately. The Dept of Finance breaks them out separately when notifying your management company.

Do property managers have a direct contacts with the D.O.F. if they have inquiries on exemption benefits for a few units or are they required to fill out the online form and wait months to receive a response?

I have found Sheela Feinberg at the DOF to be responsive when I contacted her directly about my co-op's situation. You didn't have to wait months for an answer.

Her email is feinbergsa@finance.nyc.gov

Thanks Marty

No, a proxy is not required to be inclined with the notice of annual meeting unless otherwise specified in your by-laws or house rules.

Keep in mind a proxy is not used to vote. It allows a shareholder to appoint someone else to vote on their behalf.

After signing in at the meeting, a ballot ( for voting) is given to shareholders. One ballot per unit and if another shareholder(s) gave you their proxy, you will receive one additional ballot for each proxy. I think you will find the below link helpful.

https://law.justia.com/codes/new-york/2016/bsc/article-6/

Our board has not sent out notices in regards to our annual meeting which usually is in May/June. Last year they cancelled it from June until October due to a problem in accounting. Our financials aren't ready yet and I feel they are pushing the annual until October again. It appears our board is running our cooperative in the ground due to lack of knowledge.What can we do in regards to putting us back on track? Doesn't the board have to have a vote from the shareholders about changing the month?

If a proxy is not included with your annual meeting notice and a shareholder wants to appoint someone to vote on their behalf, they can make up their own proxy by merely writing following on a piece of paper:

The name of the person who you are giving authority to to vote on their behalf IE: John Doe
The unit number/Apt Number
Print name of person giving their proxy: IE: Mary Jones
Signature of person giving their proxy IE” Mary Jones
Very important the DATE

the management company would mail out the proxies and include a memo that informed the shareholders that lived in the building that board member "x" would pick them. After board member moved, the managing company would mail the proxies out and told the shareholders that lived in the building to give them to the super to either mail them back in or give them to the super.
The week before the meeting they would post the same memo in the elevator and common areas the week before the meeting.

I had a problem with this since i knew that i as a shareholder could knock on doors or ask shareholders to give me their proxies. i notified the board members that lived in the building that this memo was incorrect , that the proxies could be given to any shareholder , and this was skewing the voting.
The managing company refused to give me contact info on the board members that didn't reside in the building.
The first 15 years the memo went out it was correct, it stated that if you were unable to attend you could give it to another shareholder who was attending the meeting or mail it back to the managing company.
The people who were running for election/reelection were also listed with boxes for the number of shares you wanted to vote.However the board member picking them up would tell the people to leave it all blank and just sign over the proxy to them.

By not allowing a shareholder who will not be attending the meeting to appoint whoever they choose to be their proxy violates Section 609(a) of the Business Corporation Law of the State of N,Y, which permits a stockholder to authorize any person or persons to act for them as proxy.

Even if your house rules and by-laws say different, the BCL supersedes. You should read your by-laws to see what is required for shareholders to call a special meeting for the express purpose of proper proxy procedures as well the procedure for the removal of director(s) with/without cause.

This link Will address your rights to names of directors.

https://law.justia.com/codes/new-york/2017/bsc/article-7/718/

The problem i have run into is there is no enforcement of the BCL .
I contacted my attorney generals office concerning mortgage fraud and they replied back that they do not do that. Referred me to the NYS AG office who had already proved unwilling to get involved in enforcing BCL and other cooperative problems. The mortgage fraud involved the cooperative informing buyers that the building was 90% owner occupied , when in fact it was lower than 50%.

I'm looking to approve someone who can pay their monthly bills if I approve their application.

I'm not making their credit score the only thing I look at. For me, I'm looking at how much they owe now and how much debt they have to pay each month.

The credit report breaks down these debts into 2 types: 1) regular credit card debt and 2) other debt like student loans, car loans, and mortgages.

I then weigh their income against their monthly debt, also considering food and other usual monthly living expenses.

Then I decide if they can meet their expenses based on their income.

A credit score can be impacted by an event that happened long ago. If the applicant is on the straight and narrow as of now and keeping their debt manageable, then that's what I'm emphasizing today.

I totally agree with Marty about not isolating a credit score and make it the sole determining factor. There are many factors which affect a credit score, many of which are not relevant to a purchaser's ability to pay their mortgage and maintenance.

Our financial evaluation process is similar to Marty's. We look at two components - sufficient income to meet monthly non-discretionary obligations (mortgage, maintenance, automobile, student loans, minimum credit card repayments, etc), and sufficient *liquid* assets to be able to meet obligations for 3-6 months in case they lose their income.

By liquid assets I mean bank and investment accounts (and similar). We will include retirement accounts because they can be tapped in an emergency. What we give very little weight to are owned real estate, tangible property, items with collector value, etc, because these many not be easily converted to cash.

If income is provided from a trust we may ask for a copy and have our lawyer review it to make sure the terms allow for sufficient monthly disbursements.

If a purchaser is on the borderline, it's not unusual to ask for 12 - 24 months of maintenance payments be put in escrow for a couple of years, or to ask for a guarantor of the maintenance payments. Your attorney can help you set these up.

My building had a very similar but more complex situation with our live-in super and telephone lines. What we ultimately discovered was that when Verizon converted all our copper "POTS" phone lines to fiber, they unilaterally upgraded a phone line to FiOS Triple Play they were not authorized to upgrade.

A phone line the super uses in his office and for which the building receives and pays the monthly invoices, was listed as a residential phone line in the super's name. It should have been listed as a business line in the building's name. The super has his own FiOS Triple Play service he pays for directly.

When our lines were updated from copper POTS to Fiber, the super contracted privately to upgrade to FiOS Triple Play (about $220/month). Verizon, in their blessed incompetency, also upgraded the office phone line that was in our super's name, to FiOS Triple Play at about the same $220/month.

It took us about six months, until February of this year, to discover the problem. I'm still fighting with Verizon for a refund, so lotsa luck!

Bottom line. If you have a live-in super, he should be paying for his digital services unless there is a clear understanding with the building that the building will pay the bill. If he uses the phone service bundled with the Triple Play for an office phone or other business purpose, he should be reimbursed accordingly.

Before you have "the talk" with the super or take any action, you must determine when and who authorized the upgrade to the expensive digital services. You need to go back to the beginning when the expensive services were first ordered, and try to find out who authorized the upgrade. Hopefully, your managing agent archived the actual invoices or has copies of them so you can determine when this started. If you have an approximate date, see if Verizon can supply you with paper copies of the invoices around that date.

What you find out about who authorized the changes will determine how you handle the situation. If it was the super and he upgraded without permission, he bears responsibility. If Verizon did the upgrade without anyone approving the change, it becomes the building's responsibility.

The length of time the expensive services were in place will also color your interaction with your super, if you determine he is responsible. Co-ops have a responsibility to review their expenses on a monthly or quarterly basis. The overcharge should have been flagged within three months. If it's been going on for longer, you either need to eat some of the excess or work out a payment plan with your super.

Even if he authorized the upgrade, it may have been an innocent mistake. Plans like Triple Play are notoriously complex (probably to achieve exactly what happened here), and your super may have thought he was being economical because of all the "savings" he was told there would be. Verizon, Spectrum, AT&T are very predatory, and you need to give your super the benefit of the doubt until determined otherwise.

I hope I've given you some food for thought. Please don't jump to any conclusions, but establish as best you can what happened, and then decide if you need to do anything vis-a-vis your super. If you value your super and have a good working relationship with him, simply pointing out what you discovered but not asking for any reimbursement, or just for reasonable reimbursement, will create a huge amount of priceless good will. At least that's how it works in our building.

In my experience, your managing agent (MA) should have received the abatement/STAR info within the first 4-6 weeks of the new year, or by mid February. This correlates to what the DOF and 311 have told you.

Anything is possible with the DOF, but it sounds like your MA may have messed up. I'd suggest having your MA contact the DOF once again to make sure there wasn't some error.

Sheelah Feinberg within the DOF has been helpful in these matters. Her email address is FeinbergSA@finance.nyc.gov

Your shareholders need to have this cleared up ASAP or else you're going to bear the brunt of their anger.

I requested a copy of my benefits page from the D.O.F., when I received it I noticed that the amount I received was different than what my co-op was giving me. I questioned this with my M.A. who took no responsibility and said this is the information he received and that was that.
Even though this affected other cooperatives, I had to take the matter into my own hands and contact the D.O.F. via. email @ http://www1.nyc.gov/site/finance/about/contact-by-email/contact-coop-and-condo-abatement-inquiries.page

It took about 3 months to get a response, but was informed that they were sending updated lists to the M.A.( I do not believe this was for Star and Enhanced Star but for some Sche and Scrie and the benefits would be retroactive for 2017/2018. D.O.F. said it would take up to 15 days for the M.A. to receive the new list. It has ben 3 weeks and according to my M.A. no list has been received and once again it is my responsibility to follow up. Good Luck!

I have received my forms for most every building I manage (excepting 1).
New process this year is that everything was done online.
When the Managing Agent initially filed, he/she should have gotten an online receipt for the filing... I would ask to see it if you're skeptical.

~AR

We filed the change form in January but when we got a revised statement in April, it did not contain one change. I contacted DOF by email and they replied, saying the change was made, gave me the amount allocated to the apartment in question, and said it would be in a revised statement we would get in early June. By the way, for new shareholders in the past few years, they apply for and get the STAR directly from the State and it is not included in the DOF statement.

I think you would have to review your by-laws to see if instructions are provided for this type of situation.

I can appreciate that there are two candidates that "no one wants to vote for", but at least these 2 people volunteered to run. Why are there no other candidates?

Quite frankly, it sounds as if you mean that there are 2 candidates running that you and/or the rest of the current Board does not want to vote for. If so, then you should have been seeking out "acceptable" candidates long before the Annual Meeting was scheduled.

You talk as if a quorum will not be reached, but what if you do have a quorum and these are the only 2 people that are running? Seems like you'd be stuck with them.

I don't mean to sound harsh, but you need to be much more proactive in finding candidates that are acceptable to you instead of hoping that you don't get a quorum.

Don't blame these 2 people for running, and please don't hope that a quorum isn't reached. That's not a good way to run a proper Board in my opinion.

People have become apathetic due to a self-serving board and a mgmt. company that caters to them and together retaliate against cooperatives who go against them. These Two people who would clearly be YES men we're picked by a board member not a director in an attempt to have more power on the board. From what I have read on this sight, we are not the first and certainly not the last co-op to have this problem

I suppose you are correct, buying time will not help. It will only cost the co-op more $$$ for another meeting and yes our by laws do provide for a new meeting if quorum is not met. Thanks for your input. I guess the board will have to duke it out amongst themselves and hopefully the co-op and cooperatives won't bleed out in the process.

Tara did you have an open candidates night? You can get to talk to your shareholders and try to recruit more people. Most people don't understand that serving for the board is really not that hard, like the board says or suggest. You can also post that if anyone would like to step up and run for the board this would be a great opportunity.
Best of Luck

Great suggestion,
The problem is when names are given of interested parties, incidents start happening, such as their car get keyed, if they planted a tree or flower garden it gets destroyed. They call for repairs and they have to wait weeks for a response on why there was a delay. People get the message loud and clear and back off. This is the first time in many years that no one wants to run for the B.O.D. The only candidates that do not have any incidents are the ones that are promoted by existing board members.

We have a FOB system and replace all of them from time to time to address security concerns. On systemic replacement, we provide six FOBs to the unit owner. Extra FOBs are at unit owners cost. Management maintains the list of FOBs with their identification numbers related to the owners, but nothing more.

It's my understanding that most key fob and swipe card systems use a central computer that can control the dates, days, and times a fob or card can be active. Can you use that capability to control the accessibility of the extra fobs or keys?

I also believe that the same computer can generate activity reports for individual or groups of fobs/cards. If there's a question of a fob/card being used inappropriately, such a report will provide clear evidence.

Key fobs and swipe cards provide much better access control and verification than simply distributing extra keys for a mechanical lock.

We recently bought the key fob system in house vs. utilizing a third-party vendor to manage the process. The Property Manager and Board Officers are responsible for issuing fobs to residents. Fobs are issues based on the number of residents in the unit. A extra fob is provided for emergency contact on a case-by-case basis. Naturally there is a security concern; however, the system allows us to deactivate any fobs that are lost or broken. We can generate activity reports as well to determine any suspicious activity by a resident.

I have the systems in many of my buildings and love it.

The system (mine is a Kerri) can limit days, times, points, etc.. and we issue separate fob access keys for Shareholders, household help, contractors, even postal all by limiting the specific access on each group created.. you can create as many groups as you need. I have one building with a fob accessed roof deck and we will now be limiting the access to adult shareholders only!

In case of an incident, we can review the point of entry logs and print out whatever s needed.

The most important thing is to ensure the initial entry of distributed keys, and replacement keys are maintained. Remember to turn off lost or stolen keys and back up the system periodically.

~AR

AR - Thanks for the info about the new door lock requirement and corresponding DoB regulations. Very informative. I passed it on to my building's super and property manager.

AR - I echo Steven's sentiments. Thank you for this information.

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