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Hello,
Is a coop board or management company legally obligated to inform shareholders when they get their assessment what that annual assessment will be used for? Ahead of time.
I live in a very compromised building—meaning 100+ years, not well kept up, needing so many crucial things (curb appeal is always the last on the list). We have very little reserve funds. I explain this only to acknowledge that emergencies come up all the time, where that assessment money might end up going. But I would like to know what the actual law is around this, what the protocol is... Are they required to tell us beforehand?
Looking for informed answers, please, rather than opinions.
Thank you!
Thank you Steve. Your first paragraph answers my question.
I had been asking the building's management company to tell me beforehand what their plans were. Now, understanding that there is no requirement for them to do so, I'm done with that request.
The rest is stuff I either already knew, or cannot actualize. Too long, too pathetic a story to tell of a building where at our last shareholders meeting, we couldn't even elect a new board b/c we didn't have a quorum. It's that kind of building—impossible to accomplish much. Very annoying.
Thanks again.
I understand what you are going through can be very agravating and frustrating. Good luck with receiving the information you are asking for.
Assessment? Finances are a focal point of your getting voted in( my opinion) in. Those who vote you in want you to represent them especially how their money is being saved, used etc. It seems board members( some of them) like to approve any and every thing. Then you have shortages and how do you make it up INCREASES!!! This to me is the wrong approach, spent the Coop funds as if it was your personal bank account. All board members should have monthly account balances and what checks are written. Part of the problem is, the laws in regard to Coop's should be tightened and accountability, if not, then boards can go unchecked and the state can do nothing. My opinion, Vote people on the board who are accountable to you( Shareholders, professionals) without accountability
this will continue to happen and when it's too late then what? Don't put people on the board who you like, are friends with, but someone who cares where they live and are fair and held accountable to you and others in your building...
I believe a good and decent Board will tell you where the money is going. We just had an informational meeting which put all our bills, incoming income and outgoing. The very few people who attended the meeting, I thought understood where we were coming from. Now they want to remove the Treasurer! Because the majority of SH don't care about where they live is very hard to maintain the bldg. Our bldg is also very old and falling apart . They don't realize the FANTASTIC job the treasurer is doing. just to keep us afloat. For the past 5 years we have not had a treasurer. You can imagine the mess we were handed. The removal is ALL personal. I pray for the bldg and SH. The bldg WILL CRUMBLE without our treasurer..
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As far as I know there is no statute or regulation requiring a board to disclose how an assessment will be used. Something called the Business Judgement Rule gives boards broad discretionary powers to make decisions without having to justify them, as long as they are legal and in the best interests of the co-op.
It sounds to me as if you already have some idea of where the money will go. Have you tried asking the board what the assessment will be used for? Most boards will inform their shareholders beforehand why the are being assessed, but there is no specific requirement to do so I am aware of.
They could use as generic a reason as "reserve fund replenishment", which, in the situation you describe, is a very valid reason.
If you believe there is some sort of malfeasance going on, either check with an attorney or search online for how to report suspected co-op board misbehavior. Ultimately you can vote to replace members of the board at the annual shareholder meeting, or if it is urgent enough, check your bylaws for how to cal a special shareholder meeting for the purpose of recalling one or more of the board members.
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