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Our Coop allows shareholders to rent out their units with yearly leases. The prospectus tells us how and what to do, etc. Now, the board wants to do away with renting altogether...forever. They have put it in the new house rules. I should point out that the sponser still has quite a few units and he will never leave this gold mine and there is a moratorium that will end this year. Can the board do this?
Join the Conversation Comments (1)Read your plan. usually the subletting is controlled by the bylaws or proprietary lease therefore requiring a super-majority vote to change. House Rules are the day to day living regs that control how shareholders live together in a sensible and collegial community. The Board does not control this issue, the shareholders do. The Board cannot change the Proprietary Lease or Bylaws without a super majority vote unless they conned the shareholders into allowing them direct control over rewriting the Bylaws at will, which would have required a super-majority vote to obtain this power. while not impossible to obtain, I haven't heard of any Coops,except one, that was stupid enough to give over this authority to the Board, thereby obviating the only control a Shareholder Group has over a run-away Board.
ditto what the poster above says. The board cannot change the proprietary lease or by-laws without a special vote usually super majority and a special meeting , shareholders informed of meeting and what it is about . mailed out in the time frame specified in by-laws. The house rules do not cover subletting, but they can change the house rules, as long as they are not self dealing as the reason for the change or other improper board conduct. like try to get them a better parking space.
My BOD did illegally change the voting, and i am trying to find a co-op lawyer for that and about 20 other things they have done, against the proprietary lease and i would guess with the non prop lease subletting, about 40 years of unpaid sublease fees.
Also they lie when they sell units,stating it is 90% owner occupied, when it is around 50% or lower. i dont know since they refuse to abide by BCL 603? and provide me with a updated list of shareholders, another reason i need a lawyer. Worse they wont let me see the financials as allowed in the proprietary lease, and without a template of which court to file in, i am sol .
i figure they must be a lot of mortgage fraud since i don't think banks will refinance the bldg when it is 50% and buyers usually cannot get a mortgage. One recent sale was a foreclosure,so the bldg BOD and MC was involved in the sale.
i have a runaway board,illegal, and plenty y of other illegalities.
we need a agency in NYS for these co-op law violators, as i said in another post/rant it is a big scam with no oversight. The renters have much more juice on their side .
You are better off with a zero renters policy, however in this market and job market, if someone is underwater , they will easily walk away, the good news is , co-ops are better then condos in foreclosures. The co-op bldg gets made whole on back maintenance and fees first, bank is next
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I'd have to see your Prop Lease to see what the exact provisions, but the Board typically has the ability to fully control the subletting rules within the cooperative. If the sponsor currently holds more than 10% of the building, taking away the extra rental units in the building actually helps the building since banks frown upon buildings that have too high of a percentage of "investor units". This can upset the ability to obtain mortgages, refinancing for both the cooperative corporation and the shareholders if the investor ratio is too high.
The only way to change it is to elect a new Board next year and revert the House Rules back to their pre-moratorium state.
Hope that helps.
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