How to deal with an entrenched board?

PS: There have been petitions, but so far they have been ignored by the board, which is MIA.

When are your next annual board elections? If enough shareholders feel as you do, then you and they should consider submitting candidates to run.

It is standard, by the way, for co-op boards to have an annual meeting that includes all shareholders (this is also when elections are held). Are you saying this has not been happening?

sponsor board?

Vote them out.

Kafka, there is definitely a process. Get a hold of your by-laws and read what they say about election of board officers/general shareholders meeting. Contact you management company and also your coop attorney if you're overdue--s/he represents the entire building not just the Board. They are legally obligated to enforce the by-laws.

If things get insane, you'll have to escalate it to the DA. There is a lot of info online around this topic. It's a very common NYC issue.

I've been in the building for less than a year, not clear when the next elections are, but probably not scheduled for any time soon, otherwise the dissenting owners and residents would simply be submitting candidates.

By the way, there is a number of renting residents involved in both sides of this issue, including at least one sitting on the board. Apparently, the non-owner on the board has a proxy from the owner, which I assume makes it passable, although I'd want owners on the board. As for the other residents making demands from the board, is the board answerable to them (whom may not necessarily have a proxy from their landlords)or strictly to owners and their interests?

It seems to be a legacy sponsor board, and I'm exploring how to bring about change so that there's some transparency into the workings of the board, and so that the board is held accountable for its actions.

I'm going to look for the by-laws in my documents. Don't they also have to be filed with the State, and I could get them from there?

Are you renting or did you buy? If you bought, I'd think you would already have a copy of the master lease & bi-laws, and that your atty would've noted this during thedue dilligence process.

IF you don't have copies of thes documents, check w the management company. They may also be able to answer some of your questions...good luck

That should all be in your proprietary lease, which you received at closing.

Be patient, over time the sponsor seats will be replaced by owners. You knew the process when you bought.

read the bylaws. its pretty basic.

This is not magic. The Board is constrained by the by-laws of the corporation which are obtainable from the managing agent or in a worst case scenario from the NY Sec'y of State's office. Legal action may be necessary if the board refuses to abide by terms of by-laws. But it sounds like there are some avenues to pursue before retaining counsel. Speak to some of the older shareholders who know the history to get a better sense of things. On the employment front, the board owes no one an explanation. In fact, it may be better business sense to not tell anyone anything--it helps minimize the coop's risk of employment related lawsuits.

The board was served with a petition for a special meeting, stating multiple items for the agenda:
The firing of the employee.
The lack of adherence to the by-laws (fewer than 5 members on the board, no annual meeting in over a year, etc.)
I now have a copy of the by-laws.
etc.

The board has called for the special meeting, but only acknowledged for discussion only one of the points in the request for the meeting (the firing of the employee, which they'll decline to discuss due to employment law)... no word on the other requested items, so I'm concerned that they will then conveniently say that those were not on the agenda.

They also declared all previous proxies from the owners invalid. There's a large number of absentee owners, and now tenants are having to scramble to obtain new proxies from them. Shouldn't this also affect any non-owning board members, they too should produce a more recent proxy, right?
Is invalidating of the existing proxies valid and common?

My question then is, other than going to the meeting and seeing what happens, what other options are there other than suing the board?

The By-Laws do allow for firing of the board with a majority over 50% of the shares.

Is there a recommended way to serve this process?

Thanks.

You can also put forth an amendment to the by laws to state that only owners can serve on the board of directors. I am assuming that the majority of occupants are owners so you should be able to cobble together a majority to get it passed. We were able to do that in our condo. Absentee owners still have a responsibility to the building. If they are properly notified, yet still can't be bothered to protect their interests by submitting their vote,-- even via an absentee ballot, then the decisions will pass to the owners who live there and care to be involved.

the bigger question is, where the hell was your attorney when you were buying this turkey?????

even some of the most incompetent ones would ask about the minutes, even if they would not look at them.

at this point, even if you get more then 50% of the shares to dissolve the board, they will not go. you will have to take that petition to attorneys and start a long painful and expensive process of getting them out. while this is going on, they will destroy the coop corporation. once the owners receive it, there will be a huge mess and the maintenance will have to skyrocket to meet the level of neglect and destruction that the current board made.

if you can sell, just do it and move.

If you called for a meeting, and the board responded by scheduling one, so far they are playing fair. Don't jump to conclusions yet; go and see what happens.

Also, in a building with a lot of absentee owners, having a renter on the board might provide another, helpful point of view.I'd think twice before kicking the renter off just because you can.

ali r.
DG Neary Realty

Selling because of this? Woa... there's growing interest in dealing with the board... I'm just crowdsourcing ideas, you are an experienced bunch :)

I have nothing against a renter being on the board, but said renter is also keeping other renters from the board... good ol' boys network.

The lawyer did mention about the sporadic meetings... it's an otherwise good property... I just think that something similar to a Sponsor board remained in control and got used to it...
I'm having a follow up call with the attorney, and we'll see about the meeting called by the board (they conveniently dropped from the agenda our questions about the legitimacy of the current board, lack of meetings, etc.)

This seems to be a long process, and we are determined to follow it.

Thank you everybody.

K, also worth mentioning is that the location of the building is an important variable. "Sporadic meetings" would concern me more in Chelsea or Murray Hill than they would in Prospect Heights or Park Slope, just because very generally speaking, Manhattan board standards are sometimes different than outer borough ones.

Also, for a board to take shareholder input and then ultimately disregard it, and do what it wants, is not unusual. Even for a board to fire a well-loved employee and say, "we have our own reasons," -- that's not unusual either. This is, after all, representative democracy and not direct democracy. You don't like it, you run for the board yourself.

More of a concern to the average owner should be how the building is functioning -- are repairs being made? are funds being protected?

And along those lines, why the F are the tenants trying to get absentee owners to submit proxies? That's what your managing agent gets paid for.

ali r.
DG Neary Realty

Are you saying that the Managing Agent has a duty to solicit the proxies even on behalf of people opposing the board?

The current Managing Company and Board are "close."

It's been my experience that the managing co. is a puppet for the board.

I have now read the By-Laws. Imho, some of the responsibility falls on the Managing Company because per the By-Laws, they are supposed to ensure yearly elections, yearly reports to all owners, and the yearly meeting, none of which have happened in the last 12 months (I'm told last general meeting was 18 months ago.)

At some point, if you've followed the by-laws, and the the board refuses, you hire a lawyer and go to court.

>At some point, if you've followed the by-laws, and the the board refuses, you hire a lawyer and go to court.

Sounds expensive.

I had been waiting a bit before giving an update.

We got the Board to attend a Special meeting... there was much play about the intention of the meeting, the agenda, etc., multiple lawyers present, etc. We showed attendance of over 50% of the interest in the association.

The Board did not reneg on their past actions, only explained that they thought they did the right thing, and didn't change their minds.

They pretty much said that if people didn't like it, they could vote accordingly, and set a yearly meeting for a few weeks from now. Such yearly meeting hadn't been called for almost 2 years... an "inadvertent oversight"...

Anyways, we are dealing with repeated deficient notices going out, which have wrong dates or days of week, etc., and we are having to stay on top of it to catch all of these deficiencies.

It's been disclosed that they have hired The Voting Group for oversight of the elections.

Does anyone have any experience with this group? Are they truly neutral, or do they keep in mind who hired them and is paying the bills, and rubber stamps results?

How fair are they?

Should we be communicating with them now, as obviously the Managing Agent is either so negligent or malicious in their erroneous mailings, that we are loosing faifth that this will have a pleasant outcome.

Kafa,
Double edged sword, you want transparency, but at the same time don't want things written in the minutes that could reduce the value of your home. For example, discussion about foul smells coming into your home, or noise from the elevator or subway underneath, etc. The person buying your home may read those minutes.

Question... if several of us are running for the Board, as are some of the existing Board members.
Those running and non on the Board are practically a Slate, although the word hasn't been used, in that we are seeking to serve together.

As for the Board, they may seek to toss or sideline one of the current Board members, and are also close with another person not on the Board who wants to run. So, not 100% clear on their slate.

My question then is, how are all 5 members picked being that neither slate has 5 people?

Are all candidates sorted by percentage of votes, and the top 5 picked?

Or do slates "win," and they are free to fill the remaining positions as they see fit, whether from the loosing slate, other residents, etc.?

Thanks.

Also, do candidates have to be declared in advance, including declaring what slate they belong to?

im thinking you should read your bylaws

Kafka: Most bylaws require the number of active board members and how often meetings and elections be held. Also the method of pre-election communication. Not how they get elected.

You've got The Voting Group involved. Contact them. You are paying for it. Did the Board or Managing agent tell you otherwise? It doesn't seem as if they tell you much. If the objective is to sort out and resolve the issues then the cost should be split evenly by all.

In any case there's a lot of B.S. going on and boards love to sit back and watch as the managing agent gives you the run-around.

Kafka, yes, if five seats are up for election, then the top five vote-getters are elected.

Voters don't vote explicitly for a slate, but when you stand up and say "I'm running, and here's why" you can say that x y z and yourself are a slate.

I don't how votes-per-unit are determined in a condo. It could be one vote per apartment, or some number of votes per percentage-of-common-interest, or whatever that number is multiplied by the number of open seats.

In my co-op, it's number of shares times the number of open seats. So if this year I have 1600 votes, I can give them all to one person, or split them among x people.

Kafka: You stated that you are an owner. eliz posted about shareholders.
Is this a condo or a coop?
You aren't an "owner" unless it's a condo.
If it's a condo you can file a complaint with the Office of The Attorney General.

If it's a coop and the board hired an outside consultant to resolve the issues and they are paying out of their pockets (don't believe that),there was a recent thread here on se with info about a firm that consults with shareholders (and owners of condos, I would think) who are trying to deal with corrupt boards.
I think the discussion was "Corrupt coop boards" or something like that.

Get together with your like-minded neighbors and hire that firm.

It sounds to me as if you have a big cluster-shtup going on in that building.
The boardmembers, the sponsor and the managing agent are the shtupers and you are the shtupee.

It's a condo and the votes are per % interest of the Association, which varies by apt.

Thank you everyone.

O.K. Kafka. It's a condo. File a complaint with the Office of The Attorney General.

Good luck.

Can they keep declaring that previous proxies are invalid, and forcing us to get new ones?
That's wearing us down and we are not getting as many "renewals" as we'd like, people start becoming disinterested, tired, etc.

Or is only a previous proxy invalid when an owner signs a proxy that says so?

Thanks.

Kafka:
They can "keep declaring" anything they want.
Their objective is to wear you down.

Filing a complaint with the A G. is free.
The sooner you file the better you will feel.
Good luck.

Several of us were able to get seats on the Board.

It's been a lot of work, but well worth it.
Thank you everyone.

K, thanks for the update.

Kafka: replacing former bad boardmembers?

Yes, congratulations to you! Now the real work begins. Best of luck.