My experience was that the Fire Dept is the authority that said nothing is to be in the hallway because, in case of an actual fire, evacuation of the shareholders might be delayed because of various items in the hallway.

Remember that during a serious fire (which can break out in very little time), the hallways may become pitch black due to smoke. If people have any objects impeding their escape route, there could be deaths and possible liability to the co-op. The worst of both worlds.

If you say that you're being unfairly singled out for your doormat while others are allowed to keep their items (bikes, strollers, etc) in front of their doors, then I recommend that you take video of these other offending objects. This can then be given to the Board as proof that the rule is being unfairly applied to shareholders. Then ask the Board why YOU are getting the eviction letter and the other shareholders (s/h) are not. After all, aren't the other s/h violating the rules, too?

In order for a Board to be respected and successful, they must apply the co-op's rules fairly and across the Board. If you're being singled out while others are not being penalized, your video proof will stop all talk of eviction.

One last thing, keep all documentation - legal letters, emails, phone calls. Anything and everything. You may need it in the future to support your claims.

Good luck and please keep us posted.

Living in a corner coop apt. with zero foot traffic with the exception of my own or my visitors, a floor mat has prevented dirt from even the outside hallway carpet. I live on a lower level which receives lots of dust & dirt. Before the mat, there was constant foot prints all over my floors from outside of my door. I've had door mats in front of my doors in houses since childhood. Had my mat here for 5 years. It's now even noticed. Regulations in NYC are totally out of control. Making no logical sense. So the hallway carpet is not a fire hazard but a small little mat is????

Call the fire dept. ask them . Also mention other items in the hallway. Hopefully they will come and give the co-op a fine and then blame the board!! I’ve contacted the fire dept regarding questions besides I have a relative in the dept.

That is a good question. I would like to know the answer. What is the penalty for? We are all on a fixed income pretty much. Everything is going up but the pay check! Please continue comments. I read them!

I don't know anything about Mitchell Lama co-ops, so I can't speak to any specifics about them. Generally speaking, for other types of regular co-ops, the By-laws and proprietary lease (aka the Occupancy Agreement) take precedence over the House Rules.

That's because they are legal documents that specifically outline the shareholder's and corporation's legal obligations. House Rules are usually applied to quality of life issues that affect the co-op's shareholders.

If a penalty is specified in the House Rules and (very important) is applied equally and fairly to all shareholders by the Board of Directors, then the Board has the right to impose a penalty. If you think the penalty is excessive, I recommend that you ask the Board why is the penalty in that amount. Let them explain the rationale behind the penalty.

It's possible that a penalty for one offense can be higher than another offense. That's because the possible financial impact to the co-op of the first offense (ex - a renovation that goes wrong and affects the structure of the co-op) might be much greater than the financial impact of the other offense (ex - littering). So, the co-op is trying to protect all shareholders by letting everyone know in advance what the penalty will be.

I hope this helps. Good luck and please keep us posted.

I always ask: Who polices the Board?
Who says they follow all the rules?

I’ve lived in two co-ops and both I’ve seen board members do things wrong (not all of course). They have to practice what they preach because then there’s NO respect towards them.

Can I ask election independent company count ballots and votes in front of shareholders. Can shareholders control them on time when election in process (2 HR)
250 units.

In my old co-op we had the management company and random shareholders at the annual meeting help (3 were selected) and count the votes so that makes it fair. Ask for that and make it something that happens each year.

Pooh - In my old co-op, we had 3 volunteers and the attorney count the votes - just so no one could say that the mgt company was possibly biased. The system worked well with no problems.

BTW who's going to pay for that? The count can be done in front of SH. But what is the rush? why should they be timed?

To answer your question, no, House Rules don’t supersede the by-laws (which address corporate governance issues for the housing company) or the proprietary lease/occupancy agreement (which address various housing company and cooperator rights and responsibilities).



However, House Rules are intended to supplement the terms of the proprietary lease by addressing many of the day-to-day issues that arise in connection with life in a cooperative. Virtually all co-ops have House Rules; M-L co-ops in the HPD portfolio are required to obtain HPD’s approval of their House Rules, and HPD has reviewed and approved the attached House Rules for GG. Regarding the contemplated fines for violations: As you know, the Rules include extensive “due process” and “right to contest” provisions, and in almost no case would a fine be imposed unless and until there is a repeat violation after the shareholder has first received written notice of the violation.

I understand fines are needed for shareholders who ignore others around them ex: loud TV, banging a hammer after certain hour, but due process?
Why would a board side with you when they levied the fine? It's like admitting they were wrong
In my area, we have other Coops nearby, I suggest invite other Coop boards for a meeting and use another board as appeal process. If we have a shareholder who wants to appeal, then the board can reach out to another board and ask if they will hear their appeal or have other boards send people to listen, ( Total 3 people) and render a fair and unbiased opinion

All Boards are not alike. What is done in my coop, does not necessarily work for your coop. Different strokes for different Folks. By Laws are pretty much the same, but fines for one thing may be a higher or lower fine for something else, and somewhere else.

Thank you for that information. Good to know!

You can knock on neighbors' doors and chat informally about this issue. Also, do you have any common areas in your building? If so you could approach your neighbors there. Do you have email access to your neighbors? If so you are free to send messages to them. Good luck!

1) Calculate how much additional revenue you need to wipe out the debt in, say, three years. Add 10% or so to begin to create a healthy reserve fund.

2) Have the board vote to impose the assessment or increase, effective immediately. From the situation you describe, you need a cash infusion ASAP.

3) Announce the assessment and/or increase to all shareholders.

4) Watch how quickly shareholders suddenly take an outsized interest in the board and fiscal operations.

-----

The board has a fiduciary responsibility to ensure the Operating Account breaks even at the end of each year (via maintenance increases) and the Reserve Fund contains a minimum of three months (optimum six months) of maintenance income. This is *after* all of the unsafe conditions in the building are eliminated.

Do *not* let shareholders participate in any maintenance increase or assessment votes. There is nothing in the Proprietary Lease or Bylaws that requires shareholder participation, and you'll never get anything passed. Shareholders do not have the same fiduciary obligations to maintain good fiscal management as board members.

Expect very intense pushback from your shareholders. Before you make any maintenance increases or assessments known to the shareholders, prepare a one or two-page bullet-point summary outlining why the increases are necessary. This will save your vocal cords and mental sanity.

Make sure your annual audited financial report and budget projection are sent to every shareholder before any announcements are made. You should get both of these documents from your accountant. You *do* have an accountant on an annual retainer, right?

Once the financial report and budget are sent to shareholders, solicit feedback about how/where shareholders feel the co-op can be more efficient.

Something I used to do as treasurer is go through the budget line by line and highlight which expenses are non-discretionary. IIRC the top four are real estate taxes, mortgage principal and interest, insurance, and staff salary and benefits. I think you'll find non-discretionary expenses are 75% to 80% of your monthly maintenance income.

One final suggestion, and I cannot stress this strongly enough, is start having long conversations with your accountant and your attorney. These are the professionals who can best guide you and keep you financially healthy. This is what you are paying them for.

Good Luck!

Wow!

You need to contact your co-op attorney. Where is your management company in all this?

Maybe your co-op needs to be investigated and especially financially.

Here I thought we, being a new board were catching HELL! They say there's always someone worst off then you. Definitely where is you management company and atty in this matter? Are they aware of what's happening? They have to step in. Our problem was for the previous 3 yrs, (Pandemic) the previous Board was non existed and did nothing. The management company did nothing to really help or guide them. Now we are struggling to make up and get things going in the right directions. Starting with a treasurer who knows what the hell she's doing!. We're paying bills from 2021 that should have been paid.

Your first call should have been to the co-op's attorney. There are several issues at play here which need to be discussed with the attorney and the Board.

1) Arrears - the shareholder is not living up to their legal financial obligation.
2) Hoarding - an issue that affects the health and safety of all shareholders, in
addition to the property value of the co-op.

The fact that you're an HDFC may affect the way that the Board can approach this delicate situation. Let attorney provide the needed legal guidance. You definitely don't want any legal missteps in this complicated situation.

Good luck and keep us posted.

Unfortunately, We too have the same problem! We called protective services and the exterminator. Yeah it was that bad. Protective Services were able to come in do an evaluation, and is getting him help mentally, and get someone to clean out apt. That does not help with the arrears. This is not the first time this happens, and we are looking to see what can be done in the future. He has no family we know of. We are still in the early stage. Don't really know just yet what is next. Thanks for the legal suggestion.

This podcast episode with a NYC attorney, Stephen Lasser is exactly what you're looking for:

https://podcasts.apple.com/us/podcast/nyc-real-estate/id1316217394?i=1000615904697

*Usually*, a renovation begins with the signing of an alteration agreement. This is so the board and shareholder start out on the same page and the shareholder formally is made aware of the board's requirements and limitations for the renovation. From this point forward the renovation is governed by the terms of the alteration agreement and other policies in place.

*Sometimes*, with a very extensive renovation that can impact building services or the structure itself, an informal drawing or description is submitted ahead of the agreement, to make sure the board is okay with the work to be done before any more time and effort are spent.

The board can exercise its discretion, provided the board is mindful of its mandated responsibility for fairness and impartiality when making decisions.

Have they provided a reason for this behavior or have you or anyone else asked a board member for the reason behind this odd behavior?

I think in their heads it’s making money for the co-op but to me with all the added cost especially if you have to repair a unit to sell or buy it doesn’t add up. It’s making everyone rich on each sell right? Lawyer, agent etc.

So you find it odd too?

To me once in a blue mood a co-op has an opportunity to buy a unit but I also find it odd is if you want to raise the maintenance and talk about the economy etc to shareholders but yet we have enough money to buy units? Doesn’t make sense.

Almost sounds like a money-laundering scheme to me. If there's a large difference between a unit's purchase price and its selling price without any obvious reason for the difference, it could be a way of washing money or funneling money to the putative owner of the unit.

It could also be a way of goosing up the unit's price for comparable checks or loan collateral. This happened a lot during the 2008/2009 real estate market meltdown. Units would flip-flop between the same two owners, but each time the price would go up. Then it could be used as collateral for larger mortgages and other real estate-backed loans.

If you can, try to find out more about these transactions or speak to your co-op's attorney

Does your co-op own any units that they rent out and possibly sell at times when funds are needed?

That's an interesting question, Pooh. It it turns out to be true, it exposes the board to a whole new level pain - abrogation of the board's fiduciary responsibility to the shareholders.

Imagine a board needing to tell shareholders that an apartment the co-op bought for $500k is now worth only $400k when it needs to be sold to raise a large amount of cash.

Yes, if both the buyer and seller agree to it in their contract. There is usually a specific date mentioned in the contract when the seller must leave.

I’ve seen contracts where the buyer gives the seller a few weeks to stay so the seller can tie up loose ends.

When I’ve seen this situation invoked, the seller must leave by the end of the month, making it nice and neat for the buyer to take over the apartment on the 1st of the month.

I’ve never seen a Board reject this type of agreement.

Thank You Marty, that is great to know. : -)