board members - who do they think they are????

Fiduciaries.

"WHO DO THEY THINK THEY ARE????"

We are the directors of the corporation in which you own shares. It is our fiduciary duty to ALL shareholders to scrutinize any liens, loans, etc. that may be placed against any of those shares (a new mortgage, for instance).

Further, as a board member, I would see taking out a loan for 40% of the property's total value as a HUGE red flag.

Most boards (ours included) would ask for an entirely new board package (as if you were a new buyer). We do this even for mortgage refinancing.

If all your board is asking of you is proof that you have one year's worth of maintenance in the bank, they're being extremely liberal. I'd be asking for an entirely new package.

I am no coop expert Matt, but aren't coop owner's mortgage subordinate to common charge

Yes.

However, that doesn't mean we can't veto a mortgage refi or taking out any other kind of loan in which the property is used as collateral. We look at the whole financial picture, and a mortgage obviously has a direct impact on a tenant's ability to pay their monthly maintenance.

So out of curiosity, what do you do to minimize the damange to the building of an owner who has stopped paying their common charges. What are your tools and what's most effective?

can't a case be made then that the board has an equal fiduciary responsibility to review each owner's financial status on a yearly basis (a task they clearly can't undertake) to see if anyone's financial situation is below their "threshold". What about someone who suddenly lost their job, is that person going to be required to put money in escrow? How would they become aware of this person's troubles if he/she does not refinance?

Slippery slope. It's more obvious when someone is attempting to use their shares in a coop as collateral for a new loan.

@ NYCMatt - they did require a whole new board package, which I filled out. and they are not asking proof of funds in bank (I have over 10 years of maintenance in LIQUID ASSETS)...they are asking to put it in escrow.
On another note, what is the purpose of putting it in escrow....can they withdraw at will? If not, then how different is it then putting a lien (which will ensure payment before the bank gets their money)?

"So out of curiosity, what do you do to minimize the damange to the building of an owner who has stopped paying their common charges. What are your tools and what's most effective?"

Lawyers. Collection agencies. And ultimately, a cancellation of the proprietary lease, and eviction.

Does not sound easy or quick.

Never said it was.

This is why the process for getting IN can be so difficult.

hope I steer clear of Matt's bld. That bd sounds like judge, jury & executioner all in one nice Bd package.

I'm on a Brooklyn Heights board, and I don't think we'd even reviewing this. We certainly don't review re-fi mortgages. We would with a problem tenant, but otherwise no. All boards are different.

coop or condo?

What are you going to do with the cash?

why not a heloc -- so only pay unused line -- ?

"why not a heloc -- so only pay unused line -- ?"

That's assuming the HELOC is already in place.

Many boards -- mine included -- require a full board package before opening any home equity line of credit.

My coop requires 100% cash, and doesn't allow later financing.

Refinancing a mortgage with no cash out shouldn't require all the paperwork and approval.

coops are not real estate technically.

When you're taking out a loan on a co-op, it's not "your" apartment to pledge. It's not a condo.

What you are doing is pledging a piece of a jointly-held corporation to an outsider. The corporation is not trying to retaliate by making you miserable, they're just being prudent by overseeing that pledge.

And yes, you acknowledged that they had this right when you purchased -- it's on the recognition agreement (in real estate agent-speak, your "Aztech") that you filed when you bought. That piece of paper indicates how you can be bound when dealing with the corporation's stock.

I am more astounded to hear that there are boards that don't want to hear about a refi than that there are boards that do.

ali r.
DG Neary Realty

"Refinancing a mortgage with no cash out shouldn't require all the paperwork and approval."

In many buildings -- mine included -- it does.

Why would a board care if someone wanted to refi without taking cash out?

My coop building (a pretty reasonable one) expects a new package for a refi. They are pretty relaxed about it but you still have to do the paperwork. As for a year of maintance in escrow, I think that is very obnoxious but it is within their rights. I would also make sure that you get the money back in a year – often the escrow term is undefined and it just sits there forever (ie: until you sell).

Why would a board care if someone wanted to refi without taking cash out?
owner would have increased debt load which raises possibility that they won't afford the monthly cc

"Why would a board care if someone wanted to refi without taking cash out?"

Anything that has to do with a change in the debt structure of the apartment is of pertinent interest to the Board of Directors.

How does the owner increase debt load if they are just refinancing into a lower rate?

how could a refinance without taking out cash result in an increased debt load? surely, you're not suggesting that someone would refinance at a higher rate?

How does the owner increase debt load if they are just refinancing into a lower rate?

A rate refi would get approval in just about any building. Can't imagine a board turning this down.

didn't you just say: "Why would a board care if someone wanted to refi without taking cash out?
owner would have increased debt load which raises possibility that they won't afford the monthly cc"

"How does the owner increase debt load if they are just refinancing into a lower rate?"

It doesn't matter. Any change in the debt structure backing the shares of your apartment requires filing paperwork with the Directors of the corporation that issued those shares.

"A rate refi would get approval in just about any building. Can't imagine a board turning this down."

We probably wouldn't.

But it's our fiduciary duty as members of the Board of Directors of the corporation that issued your shares to monitor any change in the debt structure backing those shares.

I understand that you say it doesn't matter but providing all kinds of paperwork, earnings again and financials to simply refi into a lower rate without increasing debt load is a complete waste of time.

its ridiculous. and, by the way, not true in sane buildings. how could a board decide that its not in the co-op's best interest to have a shareholder reduce their monthly payments for their mortgage?

This is the negative of a coop. Of course if this were a condo, and the unit owner found a lender he could refi his first lien default and possibly leave the building exposed to unpaid common charges(which everyone else winds up paying. Nothing is perfect. Of course you could live in a house and have to fix the roof and mow the lawn..

this has nothing to do with a co-op. typical matt misinformation.

"providing all kinds of paperwork, earnings again and financials to simply refi into a lower rate without increasing debt load is a complete waste of time."

Maybe for you.

But it's required by New York State law for corporations to do this.

more crap.

"how could a board decide that its not in the co-op's best interest to have a shareholder reduce their monthly payments for their mortgage?"

We're not saying we're going to turn them down.

We're saying we need the paperwork to be filed to satisfy our fiduciary duty as set forth in our corporate charter.

so...give me the paperwork so i can waste my time and yours? you are ridiculous. explain to all of us how it is not in the building's best interest to allow a shareholder to lower their monthly obligation.

"so...give me the paperwork so i can waste my time and yours?"

No.

So that we can satisfy our legal obligations.

"But it's required by New York State law for corporations to do this."

Wrong. Show me a NYS law that requires c-corps to do that.

"Wrong. Show me a NYS law that requires c-corps to do that."

Look it up yourself.

Don't like to file with the co-op board? Don't buy a co-op.

NYCMatt don't be a tard. There is no law. Your bylaws have NOTHING to do with a law.

"There is no law. Your bylaws have NOTHING to do with a law."

We reserve the right to execute our fiduciary duties as we see fit.

If you don't like it, buy a house in the suburbs. Or a condo.

Or -- gasp! -- keep renting.

Or learn the fucking law before making a very fucking retarded statement such as:

"But it's required by New York State law for corporations to do this"

I have a c-corp too, I just amended its bylaw to refer to NYCMatt as a retard in our future correspondence.

It's required by New York State law for corporate Boards of Directors to execute their fiduciary duties as they see fit.

Oh, good, so they can't be sued, because it's a legal requirement that they execute their fiduciary duties "as they see fit".

Finally SOMEONE gets it.

So it has nothing to do with law.

Yes, it does. By law, we have a fiduciary duty to the shareholders.

You have a duty to the shareholders but it is as you see fit. You could just as easily see it fit that doing it is a waste of time.

"You could just as easily see it fit that doing it is a waste of time."

No we couldn't.

This is going nowhere. Where is the "ignore the entire thread button"?

Just contact StreetEasy customer support and tell them that Matt is wrong.

or hit alt M to automatically contact them re: matt is wrong (again).

Matt is a self-important middle class snob who, because of his vague trumped up "fiduciary duties", enjoys holding people to financial standards that he himself cannot meet. This gives his sad little lonely life purpose and meaning.

"Matt is a self-important middle class snob who, because of his vague trumped up "fiduciary duties", enjoys holding people to financial standards that he himself cannot meet. This gives his sad little lonely life purpose and meaning."

I'm actually not middle class.

But thanks for playing.

Maybe the socio will catch up with the economic at some point. Upwardly mobility and all that. In the meantime you can be a self-important middle-class-aspiring snob.

I have a crush on you too, Alan.

not to mention a know nothing, know it all---one hell of a guy.

Oops, I forgot self-hating. Through that in somewhere too.

So you admit to being self-important, sad, little, and lonely?

hfscomm recently called me "cute", but that's not quite the same thing as her having a crush on me. So you should have left out the ", too" and just spoken for yourself.

But as a consolation prize, I'm sure you and she have many other things in common.

perhaps tonight will be the kickoff for mattcomm1.

Matt --- just give us the ball-park of where your reign of terror is perpetrated and we'll make sure no one we know and love ever ventures into that bit of 'hood while coop-hunting.

"Matt --- just give us the ball-park of where your reign of terror is perpetrated and we'll make sure no one we know and love ever ventures into that bit of 'hood while coop-hunting."

Oh please.

I'm the kind of person you WANT on a co-op board. Trust me.

As for the ballpark, let's just say Manhattan.

trust me...you are exactly the kind of person that no one wants. on a board, as a neighbor, to be in the same subway car.

This whole thread illustrates 1) why how i don;t want to fool with a coop, and 2) the tedious apparent inability of some people on SE to argue with basic logic; Matt's argument is so flimsy it's risible.

that's what kills me about matt. despite everything, he ends up influencing people.

are co-ops perfect? of course not. but generalizing about hundreds of buildings doesn't make any sense. as i have said other times, i certainly cannot speak about all buildings; but in my direct experience both personally and from friends, co-ops are made up of reasonable people. are there occasionally some assholes on the board. yes. but not in the majority and they are generally flushed out.

from everything that matt has said, it is clear that he is not on a board. being on a board is mostly a pain in the ass as the difficult people in the building have no problem endlessly complaining to board members about what ever is on their mind at the moment. there is relatively little turnover in apartments so passing on new applications is a tiny piece of the job.

do as you choose...but please try not to be influenced by matt's pompous fantasizing.

To be clear, I've leaned against coops long before I heard of Matt. I understand they aren't all bad, and a friend is on one board that is pretty reasonable even tho a fairly fancy building. I just don't like the whole idea of these people having such power, poking into my business, etc...it just grates on me.

not to beat it to death but...

many people who live in co-ops feel exactly the way you do and many on boards abide by the golden rule. the board package is a pain in the ass; ironically, in these times, it may prove to be a good form of protection. there is relatively little information required that is different from a standard mortgage application other than letters of reference. other than the board package, no one has any power and no one is going to be poking into your business.

Exactly, poorishlady! Where in Gotham is Matt's cave? Just asking so I can steer clear.

Matt...Gotta love your determination, but I'm struggling to grasp the common theme. I've known people passionate about Darfur, pedestrianizing urban areas, b.h.o., stamp collecting, golf, but you've got an unusual portfolio of passions:

- not tipping doormen
- diehard defense of landlines
- siblings should sleep in same room to bond
- officious coop board member

Jim, wouldn't do to overlook formica. Very strong feelings about Formica.

Nostalgia - didn't I start tangling with good 'ole Matt on the laundry/washing machine thread? Matt: you were so incensed when I told you I was a favored darling of the building staff who let me borrow the laundry carts and hog machines with impunity because I tipped well.

1) Formica
2) Def'n of middle income
3) Kids sharing rooms
4) Tipping
5) People hogging building laundry resources
6) Drapery
7) Absolute power of co-op board

Forgot some others:

Salt is good for most people.
It's not how much you eat at all, but the processed foods alone that make one obese.

"Salt is good for most people. "

Salt is actually necessary for biological function.

keep eating it. a lot of it. as much as you possibly can. its really good for you.

"BOARD MEMBERS - WHO DO THEY THINK THEY ARE????"

A. Usually an affiliate of the sponsor

Coop shareholders are the most disenfranchised apartment dwellers in the world. They have all of he responsibilities of property owners yet NONE of the rights. All of the risks of homeownership with almost none of the benefits.

I have to laugh every time I see another Sophomoric Urbanite with an Ivy league education fall for this ponzi scheme.

"Usually an affiliate of the sponsor

Coop shareholders are the most disenfranchised apartment dwellers in the world. They have all of he responsibilities of property owners yet NONE of the rights. All of the risks of homeownership with almost none of the benefits."

***

I have no idea where you get that (actually I do, but I won't say where).

Most co-op board members serve one-year terms. They come up for election every year at the building's annual meeting. Quite often, during that meeting, there's such a lack of interest in serving on the board that the meeting comes to a screeching halt while shareholders look around uncomfortably at each other (those shareholders who bothered to attend the meeting in the first place) until someone finally blinks and agrees to "run" for one of the *unopposed* seats.

If you don't like how your building is being run, by all means -- ATTEND A MEETING. Voice your disapproval. VOTE ONE OF US OFF THE BOARD. Please. Do us a favor.

Otherwise, shut the hell up and let us do the job YOU elected us to do

Damn -- where have I heard this before?