Q. What do you do when the president of the board, property manager, and super are all one family? I tried waking up the shareholders with memos and flyers about the conflict of interest to no avail. Our beautiful Garden of Eden has become ridden with drugs and more renters than actual shareholders residing here. A real estate owner who doesn’t live here but serves on the board has been selling and renting out apartments. The parking list is a big secret and not seen by shareholders to see if seniority is followed, which it isn’t; [and] is handled by the property manager. The management company are held harmless to their contract due to the conflict of interest to protect them. But what about us? Who's got our backs when it comes to following laws, policy and procedures?
A. “For purpose of this response I am assuming that the reader lives in a cooperative and has indicated now that there are more renters than actual shareholders residing in the building,” says attorney Peter Livingston of the New York firm of Anderson Kill. “This presents a very serious problem for all shareholders since at some point in time presumably this cooperative will be required to either refinance its underlying mortgage or to secure one to do capital improvements. Banks are very reluctant to make loans to cooperatives when the ration of owners to renters is less than a minimum of 50 percent. This should be enough of a reason to wake up those shareholders who to date have been ignoring your requests. In addition shareholders who might want to refinance their co-op loans or sell their apartment may have a difficult time finding a bank to do the transaction.
To read the full story: Our Building is Being Improperly Run