To writer/editor Norman Schreiber, co-op boards engage in “bloodlust psychodrama.” He is the author of what Schreiber describes as a “fun novel,” Out Of Order, about murders in a co-op. It is available on Amazon.
by Norman Schreiber
Awesome and awful is a bill under consideration by the New York City Council.
The Council, that bastion of reform, hopes to transform the co-op sales process, though the effort faces a hard road.
As recently reported here, the pending bill (Intro 188) obviously views co-op boards of directors as evil and discriminatory. The measure would mandate transparency and accountability via 45-day time limits, explanations for turndowns, retention of documents for five years and board member certification that no discrimination occurred in rejecting a shareholder application.
Intro 188 puts the burden of proof on all co-ops to show that they don’t discriminate, instead of proving a pattern of discrimination in those that actually do so. I’m not sure if the bill could work; more likely, it would change the way in which discrimination is covered up.
Still, Continue reading
Everyone knows that dryers and stove hoods are blowhards.
Dryers need to get rid of moist air, and stove vents are supposed to fan away odors and heat.
But good luck if those appliances don’t work by expelling air through ducts to the exterior of your building. The stream comes right back at ya.
Many consumers are sophisticted enough to appreciate that, no matter how constructed, dryers that pump air into the room through some sort of device meant to eliminate moisture invariably boosts humidity in an apartment or townhouse significantly.
They also may know that Continue reading
The city has just announced the lottery to be placed on waiting lists for one-and two-bedroom Mitchell-Lama co-ops in the FortGreene/Clinton Hill part of Brooklyn.
One-bedroom units run $13,599-$16,757 and two-bedroom apartments, $18,985. Monthly carrying charges are no more than $620 for the small units and $722 for the bigger ones.
As is the practice of the Department of Housing Preservation and Development, however, there is no clue either in the ad or on the department’s Web site just which buildings will be available. And unfortunately, I do not know the neighborhood well enough to guess.
If you qualify for Mitchell-Lama income limits and Continue reading
ALTHOUGH COMPLAINTS ARE UP 7 PERCENT, THEY’RE NOT MAKING A DENT IN BEDBUG INFESTATIONS
Statistics from the city’s Department of Housing Preservation and Development show that residential bedbug complaints in New York City climbed 7 percent during 2010, the Wall Street Journal is quoted as reporting in the Real Deal.
In 2010, there were 4,846 violations and 13,472 complaints, up from 4,811 and 12,594 in 2009. According to Louis Sorkin, an entomologist with the American Museum of Natural History, there are many more infestations than complaints.
“Tons of people that have infestations don’t say anything and, if they are in apartments, the people next door are the ones with a complaint finally,” he told the Journal. “They may not file a complaint, but they may go through the proper channels and tell the landlord or co-op board or condo owner.”
EXPERIENCE IS HARSH TEACHER FOR BUYERS IN A NEW DEVELOPMENT
“I would advise other people shopping for new condos to watch out for really low prices,” Continue reading
Some board minutes can be a challenge to decode. (Flickr photo by studentofrhythm)
If you’re buying a co-op or condo, don’t fail to have the minutes of the respective Board of Directors or Board of Managers examined by your attorney.
In his advice below, lawyer Ronald Gitter–whose Web site is an essential resource for his clients and anyone else contemplating a sale or purchase–writes that the minutes can provide critical information about the physical and financial condition of the building, plus insights into its personality, or “DNA.”
Below, he outlines the five areas that demand a buyer’s attention. Only by reading the minutes as a key component of all the due diligence that your attorney performs can he or she be confident that you likely will avoid nasty surprises in the near and distant future.
It is up to you, says Gitter, to ensure that your attorney covers the following issues:
1. Reserves, maintenance and assessments. Although the old real estate mantra was “location, location, location,” now it’s “value, value, value” in the new economy. The minutes often describe a building’s cash position, the history of maintenance increases and the imposition of assessments. The Board’s ability to keep expenses in check and to avoid annual maintenance increases or assessments is always a sign good management.
2. Capital expenditures. Continue reading
Who will fill the seats on your board? (Flickr photo by dolphinfxt)
Annual meeting season for condos and co-ops is in full swing.
Although many residents may skip the meetings, routinely check off the names of existing board members or casually sign away their votes to proxies, they may thereby ignore the single most powerful way to protect their interests.
Please bear in mind that the state invests the boards of co-ops and condos with fiduciary responsibility. It is their job to see that funds are collected, not wasted and obligated in a manner otherwise consistent with the law.
Since the burden of responsibility is heavy and rarely shouldered equally by board members, I have developed a list of questions that I think each incumbent candidate for a board should be required to answer–publicly.
My list grows out my membership and presidency of both a condo and a co-op board. The latter board is one from which I resigned mainly because of time commitments that grew increasingly burdensome in all areas of my life and because of my disgust with the other members. Here are the questions Continue reading
Aiming to “minimize board liability” and “define the appropriate roles of the co-op board and the agent,” the Real Estate Board of New York has issued guidelines for co-op boards that specify application requirements and an explanation of how to reject and accept hopeful buyers.
The organization recommends designating one or two individuals to receive and review the full application package, with the rest of the board or committee getting just the summary tax return pages without the supporting schedules to reduce waste. It further suggests having the packages submitted on a password-protected flash drive or CD to be read on board members’ computers or setting up a secure website for applications.
Among other of its recommendations: Continue reading
Flickr photo by dlancquaert
A client of mine is putting the finishing touches on his board application for a co-op in Manhattan’s Chelsea neighborhood. The package is more involved than most in that it asks not only for his loan application and loan commitment letter but also the appraisal ordered by his banker.
Moreover, since the father of my client (who is just out of graduate school and about to start his first permanent job) is co-signing the mortgage loan, the application also requires yet another set of financial information and supporting documents.
That makes one big package, but I am not tearing our my hair at this point, Continue reading
Flickr photo by Revolt! Puppy
BrickUnderground recently asked me to list how to answer tricky questions during a co-op board interview. Examples:
The board asks you to describe the dog you adopted from a shelter years ago, a snappish Chow mix Continue reading
After literally decades of campaigning by the Council of New York Cooperatives and Condominiums, as well as others, a limitation on the amount of money that a co-op building can collect in rent from commercial (technically, patronage) operations was changed in December 2007 starting that tax year.
The impact of what was an expanded definition of “cooperative” has yet to be fully realized, though there are isolated instances of occasionally enormous benefits.
Until it was changed, the so-called 80-20 rule prevented cooperatives from enjoying a tax deduction for their expenditures on property taxes and mortgage interest if their income from retail stores, garages and such exceeded their operating budgets by 20 percent.
As a result, many commercial tenants were paying a pittance in rent, including nothing in the case of a few nonprofits such as, say, thrift shops.
With a new, more comprehensive definition of “cooperative” in the revised IRS rule, buildings now can permit the budgetary contribution of commercial rent to go over 20 percent. Continue reading