image of is this co-op assessment legal

A readers asks whether the members of a co-op board can charge an assessment that benefits mostly themselves.

Question: Our co-op board recently ordered a 30 percent increase in our monthly maintenance to pay for repairs to a small, five-car garage where three of the spaces are owned by members of the board. There are 30 units in our building. Can the board do that? Is this legal? Can the other shareholders challenge the assessment?

— Parking on the Street in Astoria

Dear Parking:

What a mess!

This all sounds way too cozy for my tastes. That so few of your fellow shareholders actually benefit from the garage, but all must pay for its upkeep, strikes me as grossly unfair to begin with. That the board is now sticking all of you with a hefty bill for repairing what are essentially private spaces is outrageous.

This isn’t the same as asking everyone to pay for converting the old storeroom into a new gym, or installing new laundry room appliances. In those more typical cases, amenities are available to all shareholders, whether or not they chose to make use of them. That’s not what’s going on here.

So do you have a legal case against the board? Maybe. Consult an attorney ASAP. Threatening the individual board members with a lawsuit could be the best, fastest way to get any relief in this particular situation.

Long-term, however, here are a few things you and your fellow shareholders can do to rein in these self-dealing sons-of … well, you know what I mean. Details should be in your offering plan, but here are possible ways to go:

  • It’s annual meeting time for many buildings. Get together with your fellow outraged shareholders and put the matter on the agenda as a shareholders’ proposal.
  • Call a special meeting. If the board won’t include your proposal on the regular meeting agenda, you and the other shareholders can call for a meeting just to address the issue. Special meetings can also be called to demand a new board election.
  • Demand that the board members step down. Most co-op bylaws provide that a board member can be removed for “cause” by a simple majority vote. “Cause” includes a board member putting his personal interest above the corporation’s.

Two more things: Consider channeling your inner rabble-rouser and work up a protest. Consider just not paying the new assessment. If 20 or 25 of you just keep making your old monthly payments, but not the assessment, your board will quickly get the message they will need to come up with a different way of paying for their garage repairs.

Don’t forget your voices, either. Lawyer Sylvia Shapiro, whose “The Co-Op Bible,” is, um, the bible of co-op owners all over New York, cites one instance where shareholders picketed their own building: “Take a lesson from our forefathers and protest peaceably.”

David Crook is a veteran journalist and author of The Complete Wall Street Journal Real-Estate Investing and Homeowner’s Guidebooks. Do you have a question about anything real estate-related in NYC? Write him at For verification purposes, please include your name and a phone number; neither will be published. Note: Nothing in this column should be considered professional legal advice. If you have a legal issue, consult an attorney.

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