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Board of Directors has recently discovered that most, if not all, shareholders have underpaid or overpaid their maintenance for many years. Board has decided to refund or bill these shareholders for as many years as the law allows. Any similar occurences and if so what was the outcome.
Apparently accountant has discovered the under and overbilling as shareholders were not paying the correct $ amount per share amount. This property has been a coop for over 40 years
If the dollar amount was incorrect, then all should be over, or under billed.. not a combination of each.
Everyone pays the same amount per share for maintenance.
If there is a combination of each, then the only way I can figure it to be is a misallocation of shares which indicates much bigger challenges than just maintenance payments being incorrect.
Maybe the accountant is in error?
~AR
I suggest you look for a new accountant and a new managing company.
Your situation is not the only one in co-ops. I don't know what is the difference--pennies or a couple of dollars per year or hundreds or thousands of dollars per year?
Sometimes, these situations happen when management companies apply an increase by way of maintenance paid per unit, i.e., 3% over a dollar amount in maintenance may result in variances. If you were to carry it over several years, the disparities may grow. Is this your case?
Many times one has to be practical and forget who paid less or who paid more and how long they resided, etc. I would cut bait and be done. What is the variance from the lowest paid to highest paid? Establish a new rate per share and have everyone pay the same amount going forward.
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Board has no idea as to how over and underpayment of maintence occured. It seems that shareholders were charged different amounts per shares which went on for many, many years no one knows. Our new accountant, discovered the error. Now board has been advised to ignore, or back bill and credit shareholders for a period of 5 years as allowed by law. Reimbursement and credits range from $5.00 to $48. Therefore some have underpayment of over $2800. Some are speaking of legal recourse for these monies.
If this were my co-op, I'd hire an outside accountant to determine exactly what happened and when - determine what the over- and under-payments are - then have the board meet with Shareholders to discuss the situation, and to offer a solution of a 25-50% resolution: those who have credit would get 25-50% of that due, and those who owe would pay 25-50%. I'd also offer payment plans for amounts owed over $1000. Try to figure out what makes sense for the co-op as a whole financially, but also have some compassion for shareholders, who might be suddenly faced with an obligation that seems unfair, especially if they've been paying maintenance as billed - on time, and in full - each month.
The important thing is for everyone, including the board, to try to be reasonable at all times. There is no advantage in pointing fingers, getting the co-op entangled in expensive legal affairs, getting everyone in the building riled up, or other actions that would split your co-op like a too-ripe grape.... that will take years and a unified effort to heal (I know).
BTW - I think the board should also think seriously about 1) a new accountant; 2) a new managing agent.
Our new accountant was the person who discovered this issue. Board is considering accessing all to pay those who are due a credit. Thus all shareholders including those who are due a credit will be assessed to pay themselves. This does not seem quite fair.
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How so? You do not mention how they were overbilled or underbilled. Please provide more explanations.
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