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I am a shareholder in a coop where the management and the sponsor are frauding financials and violating the proprietary lease by invoking fines to shareholders; raising maintenance without discussing it with the shareholders; raising the sublet fees without having a sublet shareholder on the board of directors. Also, the sponsor added a $300,000 mortgage to the underlying mortgage without the shareholders knowing about it. I need somedoby to tell me what actions to take to stop the corruption.
Thank you.
You raise a number of issues here.
* The authority for fines and sublet fees must come from the Proprietary Lease. If these clauses do not exist in your lease, you should let your board and managing agent know why you are contesting these fees. Don't bother to mention that there's no "sublet shareholder on the board"; that's not relevant.
* The board has the authority to raise maintenance without shareholder approval. In fact, setting maintenance is one of their primary jobs. A good board will explain the reasons for any increase, but no shareholder discussion or vote is required.
* "The sponsor added a $300,000 mortgage": If the board approved this, that's well within their authority. Figuring out how to fund operations and projects is one of a board's primary duties. There may be improprieties in how the mortgage was obtained or used, but that's a separate issue.
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Do you have proof of your allegations? Have you discussed your concerns with any other shareholders? Do you have a lawyer?
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