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I am on the Board in a 100 yr old coop. Back in the 1960s when it was converted the shares were not equally allocated since the apts were in different configurations then and about half have since been cut up. As a result, the larger original apts enjoy a much lower share allocation per sq foot than the other half of apts in the building. Since the shares cannot be reallocated, does anyone have a suggestion on how to create a more equal cost basis amongst apts? Thanks for anyone's help.
ellen
Thanks for your message HG. We are way past that point. Lawyers have looked into this numerous times and nothing can be done to reallocate shares. That is why we have thought about evening the playing field with some other sort of charges. It's not the mergers that created the problem it was the original unit owners that converted the bldg and gave more shares to the storage areas and maids rooms all of which are individual units today.
To change the distribution, you may need every shareholder to agree to a redistribution. Unfortunately, when it comes to redistribution of wealth, there are VERY FEW if any who may gladly embrace the idea. In this case, those who are benefited by the current distribution of shares will hold on t on to the status quo and will not vote in favor of such a distribution. Therefore, due diligence is critical when buying units and making sure that the apartment that is of interest is not unusually endowed with an unfair distribution of shares.
Good luck!
AdC
I know, i know. We would not even attempt to reallocate exactly because of what you describe. Instead I believe we can even out the inequality by charging apts with lower amount of shares per sq ft with other charges that are now split equally. Have you heard of anyone doing that?
I believe you will have a major litigation if you were to do something like that! You cannot charge phantom charges just because you wish to become Don Quixote.
AdC
Unless you can demonstrate that an apartment is consuming a larger share of a specific resource -- by submetering, for example -- then all charges must be on a per-share basis. Any attempt to reapportion charges based on subjective criteria is extremely questionable and could land you in serious legal trouble.
The resident manager prepared a cost per share vs. a cost per sq ft analysis and it varied from $1.30 per sq ft to $3.05 per sq foot of maintenance. There is no submetering in place because not all of the apt's infrastructures have been properly upgraded. As a result, any building wide charges/assessments which are based on a per share basis are widely disproportionate and constantly creates a division in agreement about any projects, etc.
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Ellen, We too have an old building, and a number of apartments have been combined, or taken over a room from another apartment. But, this was taken into consideration when the mergers were applied for, and shares reallocated.
This is not leagal -- and the Building lawyer, as well as Board members should have taken care of each individual apartment reconfiguration. I would strongly advise the Board to have your lawyer look into it. If there is a Board member benifiting from this, since they now know the rule -- they should immediatly move to have this resolved.
If the rest of the Coop gets wind of this, there could be serious problems.
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