Prior to the recent change in the the co-op/condo tax abatement, the corresponding assessment that many buildings used was essentially vapor money. For example, a building's actual property taxes might be $300,000 but the city would bill the building only $247,500 thanks to the 17.5% abatement. The co-op's budget and maintenance would be based on this reduced figure for RE taxes. Then the city would say, "You know that $52,500 we didn't bill you? Now you have to give it back to your shareholders." So the co-op would impose a per-share assessment that canceled out this rebate that was paid and refunded only on paper. (To emphasize: this MUST be a per-share assessment like any other assessment.)

The alternative was to base the budget and maintenance on the full $300,000 charge and then refund real money that was collected during the year as additional maintenance. But it works out to the same dollar amounts; it just depends on whether you want to overbill and give part of it back, or charge the actual amount you pay in taxes and cancel out the vapor money with an assessment. Either way works fine, though my impression is that the assessment approach is more popular. Maintenance will reflect actual charges and will not be artificially inflated to give back part of it as an abatement.

Now that the "primary residence" horror is upon us, things get nastier since the per-share assessment will NOT be vapor money for those whose homes are not their primary residence. So now you can have an assessment that's real money for some shareholders, or you can raise maintenance to cover the cost of actually refunding the abatement to the reduced number of shareholders who qualify for it. Again, it's perfectly fair either way - and shareholders will pay basically the same amount of money in both cases - but it's difficult to explain to shareholders and you're bound to annoy some people no matter how you do it.

The bottom line for your original question: this isn't an assessment that would ever go into the reserve fund for capital improvements. It's an accounting method in one case, and artificially increased maintenance that you give back to the shareholders the same year in the other case.

Thanks! Great info!
What if the coop included the amount of the total tax - including the abatement - abatement in their budget - would that be poor planning?
Also shouldn't the total amount assessed for be the actual amount minus the sponsor portion? For example, if the sponsor owns 30% and since he does not receive the abatement - then each regular shareholder should realize a 30% break via the assessment. After all, the abatement is really intended to give property owners a break. Not to be sucked money out of them. While I understand the intention it just seems like another way not to focus on truly reducing costs. So much of the cost seems due to management ineptitude, naive Boards and general suspectbilty to ongoing money leaking.

No, it's not considered bad planning to budget for the total tax (including the abatement) and then give back the extra money as a cash refund to shareholders who qualify. Many well-run buildings use that approach, and it's fine. The main disadvantage is that it makes your maintenance higher, which is a downside for potential buyers.

Although it's counterintuitive, the assessment technique still works fine under the new scheme, without adjusting for sponsor units or other non-primary residences. The only difference is that the assessment becomes real money for shareholders who don't get the abatement. Here's an example.

Suppose there are 10 units in the building and each has 10 shares. Under the old scheme, if each unit was due a vapor-rebate of $100, you would impose an assessment of $10 per share. No one pays any real money, the books balance, and your maintenance charges reflect actual expenses. (By the way, this is the approach we use in our building.)

Now suppose there are two sponsor units among the 10. The total rebate is now only $800 instead of $1000. But you STILL assess at $10 per share. Each of the units due a $100 refund breaks even, and the two sponsor units owe $100 each, in real money. This works out exactly right if your budgeted RE tax reflects a flat abatement of 17.5% for the whole building, as if everyone were going to get the refund. Those who don't qualify will pay the extra amount they owe via this assessment, and you will end up with exactly the right amount to pay the tax collector.

This is quite complicated to explain to shareholders - especially the retroactive clawback to mid-2012 for rebates already paid. In my opinion, the whole "primary residence" requirement is a poorly considered adjustment to a bad tax law that was only intended to be a Band-Aid in the first place. None of this abatement stuff was meant to be permanent; our legislators were supposed to come up with a tax scheme that was fair to co-op and condo owners without adjustments.

A follow-up question for any accountants or experienced treasurers on Board Talk: if you're planning to continue with the abatement/assessment model, how are you going to reflect that in your budget? The idea is:

[Unadjusted tax minus full 17.5% abatement] + [Net real-cash assessment] = [Actual tax bill]

But if you do it like that, then the assessment gives the impression that it's not per-share, even though it is. Suggestions?

Ironically, this is one argument for budgeting the full tax amount and then inflating maintenance in order to have real cash to give back to the shareholders who receive the abatement. It will certainly be clearer in the budget under the new model.

With the new rules how you reflect the numbers in the budget stay the same as before. The only change is that some people will have a real assessment to pay once a year. In our building about 15% of the shareholders will have their abatements phased out. For the other 85%, they will have a monthly maintenance that is the same amount every month, except for the small variation in the month when our building applies the abatement/assessment charges. The 15% will have to budget their own finances to handle the assessment without the abatement.

Thanks, Burt - I see what you're getting at. If you budget three separate line items - taxes minus full abatement (payable), partial abatement (payable), and full assessment (receivable) - then things will balance out as they have before, regardless of how many shareholders pay actual money for the assessment. We had moved to a simplified model of listing only the actual tax bill and footnoting the abatement/assessment, but may well go back to the three-line model this coming year.

Also, with respect to shareholders who have to pay the assessment with real money, we'll almost certainly allow them several months to do so. That's what we've done with the retroactive clawback to mid-2012. The affected shareholders have four months to pay the extra taxes. If they sell during that period, they must pay the full balance at closing.

What about people who were assigned shares in May of June of this year?

At year end, our mgmt. co. prorates the share of property taxes paid and mortgage interest paid for the year and issues 2 1098's, one to the current owner ands one to the previous owner. The owner at the time of the tax credits/assessment will be billed for the full assessment and receive the full credit. It's up to the attorneys to take that into account at closing, just as one might adjust the value for 200 gallons of oil in a heating oil tank in a home sale.

If your coop attorney is on a retainer, he may be getting paid to do a couple hours of work per month without an additional fee. If he is simply paid for all his services as needed, there is no reason why someone else couldn't have done it. Generally there are certain time frames needed for proper notification of a meeting notice, should be easy to comply.

The board attorney works for the board – he is not going to help overturn the people who pay his salary – enough said.

Generally, the appropriate meeting notice info is included in the proprietary lease.

Here's how I would go about it: I would google the NY State rules for special meetings, probably under AG. I am not a lawyer, and can therefore not give legal advise, but I would assume that you can issue the notice yourself. You probably need to issue the notice 7-30 days or something like that, prior to the meeting. I would also ask the upset shareholder to do the same (without telling him that you have done the same). This way, you have the answer, and you'll also find out that it is quite likely that he is not going to find the information for you, which, in my opinion, means that he has no basis for being upset.

This is completely inappropriate. What other things did this Suepr talk yoru board into approving?? You might have a very naive Board.

seems that the board had no idea either. very concerning.

Big car accident = guess who is liable? This is his personal life - his personal property. And, no, he should not be (or claiming to be) using the car for building business. How did this happen? What else is this Super up to? Are you paying for long distance phone service? Is he doing contracting jobs on the side? Is he billing regular overtime? You should do a forensic examination immediately.

My first reaction was that "you are kidding, right"?

But after further reflection I was reminded that my co-op pays an additional $.50 per hour on top of the union regular contract (we have a special contract with the Union) that allows flexibility with the work rules. For example, it allows for a little extra painting here, cleaning there and etc which when added together save the co-op from engaging contractors for small but necessary jobs.

You may want to inquire if the paying for the car insurance gives the co-op the benefit of something else in return before you come to a conclusion.

Good Luck!

You may want to inquiire if the paying for the car insurance gives the co-op the benefit of something else in return before you come to a conclusion.

Good Luck!

I would lobby the shareholders for a special meeting to remove the board. This makes no sense, and I'm sure the super's union would agree.

I too live in a Capoccia bldg that was left in disrepair. Where is this meeting tonight, pls advise.

If you look at the link you will see there are a bunch of future dates. Apparently, the public was not allowed into the public meeting last night. I suggest you write the Attorney Generals Office immediately & post on the Moreland Commission suggestion site.http://www.moreland.ny.gov/

Interesting enough today's NY Times has this article - http://www.nytimes.com/2013/09/18/nyregion/city-plans-redevelopment-for-vacant-area-in-lower-manhattan.html?ref=nyregion

Capoccia seems to be untouchable since he is one of the largest donors to our Governor and elected officials. LJ what has your building done to advocate? My building has contacted EVERY single elected official. I suggest you do the same...unfortunately, our current public advocate didn't advocate and his office is a big black hole but I suggest you try again and reach out to the Borough Presidents office in your borough. And, ANY PRESS PEOPLE READING THIS....THIS IS A GOOD STORY OF CORRUPTION, BAD HOUSING, NO OVERSIGHT BY HPD AND HOW Donald Capoccia has numerous complaints against him at the Attorney Generals office but since he has donated so much money to our governor he's untouchable.

Have reached out to everyone, including AG, local officials, council members, HPD (another corrupt agency), State Assembly people. Mediation with Capoccia and Nothing!! We all have to get together and have the press do an article. But how do we all reach each other so that we can get this in the press. I know the DNA would do an article, but we should go further, even utilizing TV.

Can you post information on Coalition of HPD HOmeowners facebook page?
Where is your residents? And, do you have an email that is sorta of anon that you can post up here LJ?

We also reached out to all elected officials...Attorney Generals Office has so many of these complaints and then there is the ACCO - http://condocoopowners.org/

Unfortunately ACCO was put together to help a small group of owners to submit their claims to the AG's office under the guise of appearing to be represented by a large group.

The fact that the AG offices refuses to do anything to enforce the BCL state laws, even though the AG office approved all these conversions by the same Real Estate $$$$ contributors who are stopping the forming of a coop ombudsmen, who would be able to take care of the violations that the AG refuses to field, similar to housing court

why was acco representing only a smaill group of shareholders when there are so many of being hurt by the ag's allegiance to the $ of the real estate industry?
does anyone know why the real estate industry is against a co-op shareholder ombudsmen? is it only because the real estate industry want their managing agents assigned to "help" individual buidings to continue to maintain control in order to, among other things, continue to bilk shareholders?

Why not try to get a reporter interested, perhaps one from the NY Post who isn’t a supporter of Cuomo. This way the reporter could post his information and interested parties could tell reporter their story. This might be a good time to try as it is before elections.

Brick Underground is another suggestion

For those who live in leaky constructed and poorly constructed buildings built by HPD and built by sponsors who seemed to have given tons of $$ to our governor....please attend this upcoming meeting


http://blog.timesunion.com/capitol/archives/197385/moreland-hearing-scheduled-for-nyc/

LJ & Sam how do I reach you? The building I live in has scaffolding around it and no response to any elected official in the area. Plus with term limited the local council member is a goner and our new council member is useless on so many levels. Has anyone reached out to the Housing Chair, Keith Wright?

LJ, any luck with your DNA article? We will have a new mayor who has failed to address the tale of building construction in NY when it comes to affordable housing when he was public advocate or council member.

We are in for a bumpy ride with this new administration, the "do nothings". I tried getting in touch with people from this blog who had and have issues with Cappocia, but received no response. It is very difficult since no one wants or has an email to give out since it's on a blog or a number to call. There has to be a coalition of people, not just one person, we must, somehow try to form a group so that someone, anyone will take us seriously. How do we do this? I'm reading all of these complaints, but we aren't in touch with each other.

It's most insulting in the past I have made a failed attempt to contact the public advocates office about my HPD new building. Now, the useless staff from the Deblasio public advocates office have fancy titles in the Mayor's office. Any suggestions? HPD now will get another commissioner...this happens approx. every 2 years.

I think we need to contact Emma Wolf in the Mayors office. I tried to reach out to her when she was Chief of Staff at the Public Advocates office regarding ongoing HPD problems and this is where the "do nothings" need to be exposed and she was one of them. But, now that she has a fancy new title at city hall I'm sure she wouldn't like bad press and could be exposed to her do nothing ways in the public advocates office.

I have been reading this thread. My coop also was built by HPD and BFC Construction where there seems to be NO oversight. Any insight on how a reporter can do a story on this developer. If our coops leak what will happen to the future Ferris Wheel in Staten Island that this developer seems to be the contractor on.

Write a bullet point list of his specific abuses (keeping it as brief as possible) and distribute it to all shareholders in the building. You should keep it anonymous and send it via mail as well as put it under doors. Keep it completely factual. Do not exagerate or embelish. If you have dates - include dates.

What's the % of sponsor/coop owners ownership? If sponsor owns 50% or more, no vote is going to get him out. Are there any owners willing to run for office? How do the other board members feel? Most of the issues are relatively minor, has he done other more significant things? What kind of apartment repairs? If major stuff, (ie: significant material costs paid by building, couple days/several employees labor, etc.) speak to the DA's office for their opinion.

The sponsor has less than 20% of the shares but the problem is that not too many shareholders attend annual election meeting and he takes an advantage of this situation and getting reelected. No one want to run for the BOD and working with him and to see his face at all. Talking about repairs: we don’t have an access to his apartment and the super will not disclose what he done there being afraid to lose his job. If you consider this as a minor, so what are major violations? To place a security guard at his door who works as a doorman?
Who is going to provide the major stuff, (ie: significant material costs paid by building, couple days/several employees’ labor, etc.). The super or the Management? All of them are together with him and are afraid to lose the business and the job. The DA office do not carry this issues. He has his private video camera at his apartment door.

If all this stuff bothers you, either accept it, or try to change it and run for the board. Owners can provide proxies allowing others to vote their shares, without attending the meeting. If your building has an attorney on retainer, advise him on what is transpiring. Copy the management co. as well - they have a responsibility also. Regarding repairs, it's the rare super, handyman, porter that has a full day of work, where some repair work is taking him away from some other urgent task in a common area. How are the building finances, what is the condition of the building? If there is money in reserves, no problems like leaky roofs and walls, things are running smoothly, bils are paid up-to-date, building is clean and in good repair, then consider yourself lucky. If not, people need to speak up and vote him out.
This is a little story about four people named Everybody, Somebody, Anybody, and Nobody.
There was an important job to be done and Everybody was sure that Somebody would do it.
Anybody could have done it, but Nobody did it.
Somebody got angry about that because it was Everybody's job.
Everybody thought that Anybody could do it, but Nobody realized that Everybody wouldn't do it.
It ended up that Everybody blamed Somebody when Nobody did what Anybody could have done.

What an incredibly naive, tut-tutting, blame-the-victim comment.

From what the original post described, this co-op is run by a sociopath who fires people for not breaking the law at his command. You think he's not going to abuse his power to retaliate against any shareholder who tries to foment an uprising? Have you never attended a history class in your life?

The shareholder has to live in the building with that abusive individual. You think that board president won't retaliate? Won't try to cancel the shareholder's proprietary lease and do other things to make his life hell? What unicorn-and-rainbows world do you live in?

THIS is why we need am ombudsman law and THIS is why we regulatory oversight over co-op and condo boards. The precedent that ruled that the Business Judgment Rule applies to co-ops and condos needs to be overturned, because the BJR clearly was meant to apply to professional businesses ... NOT to AMATEUR BOARDS who don't know anything about business or business judgment.

Until the law is changed, shareholders are helpless against such abuse.

You are 100% correct – our board president is a control freak who for the past year and half has had two supers in the building – always trying to evict one for no other reason than that they wouldn’t do his dirty work, i.e. harass owners he doesn’t like, not perform work or services for those on his hate list.
He won’t let owners post to bulletin board – will tear down messages, controls what meetings happen in community room. He self-deals, manipulated his sidekick back on the board after he was voted off. 1/3 of building is getting services so they don’t care; 1/3 are too ignorant to know what is happening and the rest are renters.
I would suggest getting a writer in your building to write a short history of the building – get a group of these stories together and have them published.

Again putting together a short story outlining the problems in your building is really the only way to get governmental officials and others to respond. Going to meetings with a box of evidence is just too much for people to read – but a concise well put together short story gets their attention and shows immediately the problems in the building – the evidence can be presented later to back up the story. You don’t need a professional writer – get someone with some creative writing experience. After I wrote my story, I have gotten more attention and replies than all my letters to attorney generals and others put together..

So, you're going to do nothing, and wait for a new law to be passed. That's going to change something, when? You need to get the owners interested enough to take action. Without knowing the finances, what would happen if owners withheld maintenance?

I agree with JG in NYC, you need to get on the board if you want to change anything. However, in my experience, you need an entire overthrow so that you and your group of people who also need to get on the board, have the majority of the board. We were able to get 4 new board members in, but the one person who was the "bad egg" was still voted in. Very often, the strong and "experienced" have enough people fooled to be re-elected. I know one building that overthrew the entire board, except the one person that was disruptive. But because he was only one, he was minimalized and they could get things done anyway. We had to wait for the "bad egg" to step down the following year, and then replaced the entire board.

Absolutely not. Sounds like time to look for a new managment co. If the board has approved the sale, closing shouldn't take more than 2-4 weeks, tops. The lawyers do most of the paperwork, management needs to see that everything is in order, provides the proprietary lease and share certificate and collects any required fees.

from the time the contract is signed to the time the boards meets/approves the buyer should be no more than 2 months. if the management company is not providing the needed info, the board must step if. if the board won't, get a petition together from a majority of shareholders and force them to act.

We don't get the 2013/2014 report until early in 2014. The report from the NYC Dept of Finance names each individual in the co-op and how much that individual gets for the general abatement, the STAR abatement, the disability abatement and any veterans abatement. We will apply the abatements in February or March of 2014. I know some co-op's don't apply it until later.

It sounds like your coop is somewhat right. They won't know what the abatement numbers should be until February or March of 2014. They should also apply the abatement to you soon thereafter and not later in the year.

As a treasurer, I feel the same way. Whenever I try to leave items for other people to do, it either doesn't get done, or gets done poorly. After 5 management companies and about 22 agents, only a couple of agents could compose a decent letter. I guess I'll be on the board until I sell.

Unless your building is in crisis, why not step back and let others give it a shot. It may be worth seeing whether they can keep the ship afloat. I "knew too much" as well, but in my case it was what a poor long-term investment my building was. I wasn't willing to put in the time to turn it around, and was happy to find a better place to live. One advantage to having been board prez or treasurer, you know what to look for, and what to avoid, in a new investment.

http://www.habitatmag.com/Publication-Content/2012/2012-September/Featured-Articles/Co-op-Condo-Back-Office-Only-Management#.Ui84uGR8KGQ

and get rid of this president. he sounds terrible.

Bring situtation up at next board meeting, Have the issue resolved there, if that don't work, At the next annual meeting have him removed from board. let everyone vote. Community board is for all,

We posted a 'notice for use of bulletin board'.
Items of common interest, such as local community events, street fairs,etc. may be posted by anyone. Anything of a personal nature (item for sale, services offered, etc.) must indicate the apartment # of the poster.
Any commercial postings or anything expired will be removed.