coop not sharing board minutes w/ buyers?

I would feel thats shady too. they could be hiding an assesment or something.

At least in Manhattan this is more than "uncommon." It is not done. Failure to disclose board minutes means absolutely walking away from a deal. A buyer would be insane to sign a contract without first having an attorney review the minutes and financials and perform other due diligence on the building. Insane.

People who have nothing to hide don't hide Board minutes. If it scares the Board President enough to keep the minutes from you, s/he feels it's serious enough to jeopardize the deal. You, too, should take this as a signal that whatever the building isn't disclosing is serious enough to warn you off this deal.

I agree with kylewest. When you buy into a coop, you are buying a part of a corporation. Without the board minutes, you have no idea what the business of the corporation is. Sure, you see a building in front of you, but that's the long and short of it.

A very small minority of boards do not keep minutes. A smaller minority still does keep minutes, but will not share them with prospective shareholders. I, personally, would not purchase a share of such a corporation.

If you insist on getting the deal done, though, there are some things your attorney can do to mitigate the risk. First, he should prepare an extensive rider demanding that the seller represent and warrant absolutely everything you'd normally find comfort for in the board minutes - specifically, that there shall be no assessments in the next x months, no changes in maintenance for the next x months, no house rules preventing the things you want to do, no noise complaints, no pest infestation, etc (it will be a VERY long list). Then, these representations and warranties *must survive the closing* for the period of the longest warranty, otherwise they are largely worthless.

Again, I'd recommend against the transaction, but if you do sign, be sure to protect yourself.
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Marco Santori is a lawyer in New York City, but he isn't your lawyer, and you should not rely on this post for legal advice. If you have any other questions, feel free to email at MSANTORI@NMLLPLAW.COM

thanks! everyone.. just from that quick poll - it seems like our gut reaction is justified! just wanted to make sure we didn't make any rash decisions!

As a practical matter, the board is probably not trying to hide anything unpleasant. They must know that hiding the board minutes from a buyer means a buyer will likely walk away, defeating the purpose of hiding the unpleasant content in the first place.

Its true that they could be holding out for a desperate/risk amenable purchaser, but more likely is that the board is anxious about the liability resulting from sharing those minutes. Board minutes are evidence and they know it. There may not be anything incriminating there, but, from the board's perspective, why take the chance if you can avoid it?

This could very well be a breach of fiduciary duty to the shareholder: protecting themselves individually at the cost of the corporation. The business judgment rule would not protect them. Unfortunately, that isn't your claim to make as the purchaser; it belongs to the seller. If you want to put some pressure on the board, get the seller involved.
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Marco Santori is a lawyer in New York City, but he isn't your lawyer, and you should not rely on this post for legal advice. If you have any other questions, feel free to email at MSANTORI@NMLLPLAW.COM

M Santori: Get back to work. Aren't you charging the clients for whom you ARE their lawyer at least $350. an hour?

I'm not a lawyer. I didn't even go to law school.
No minutes is not good.

But why just depend on the minutes,dumpling?
Go to HPD and DOB online and type in the address. See what you find there. It quick and it's free.
Most board minutes are censored, vague and intentionally misleading anyway.

If there are a lot of HPD or DOB violations (which charge penalties) and/or remain "Open" that's not good for the financial health of the coop.

Yes totally agree with MSantori ^^^ The seller should be involved in pressuring the board for those board minutes. Maybe it's best the seller take his listing off the market until these obstacles are settled.

Walk away. Why would a Board withhold minutes? It doesn't have to be for a nefarious reason, but it does trouble one. You cannot purchase a share of a building without knowing what you are going to be sharing in.

Agree with everyone here - it definitely raises a red flag and should be of concern. Yes, Ive encountered boards that dont keep minutes and Ive seen boards that update minutes only once a year or some other long time frame - as opposed to say updating after regular monthly board meetings. Your attorney should guide you and put this in perspective given the results of the rest of due diligence (review of OP, 2yrs financials, mgmt questionnaire, etc). But there is nothing positive from withholding minutes that exist from a prospective purchaser.

My problem with board minutes is, as far as I know, that the board is not required by any law to make note of everything on their minds. So in essence, whats in the minutes is what the board wants to make note of in the minutes. If Im wrong on this please do let me know...

But from my experience, say there is a problem with roof that can be patched up for now but will require a much deeper repair job later that will result in a future assessment for all shareholders. As far as I know, there is no law that requires the board disclose this near term need for a future full repair job...the board can simply show that there was a roof issue, and it was addressed recently w/ no mention of need for future work. Just one example of the board putting in minutes what they choose.

As truth says, sometimes the free sites at dob using the BIS, can provide a history of complains, violations, etc.. that may be left out of the board minutes intentionally - again, your atty should be all over this.

It's not the minutes that are the problem.. the problem is buying outside of a bank ordered auction of notes after the complete collapse of the NYC RE Bubble...

I love Shanghai dumplings... Jin tai Fung anyone?

Thanks urbandigs.

That's my point.
Repair issues in the building mean there are fights and arguments.
Interpersonal disputes. Unlike here on se, you can't log off. You have to live with it.

HPD violations are not issued fines/penalties but if left "Open" which means even if the building has cured the issue and made repairs the mangt. co. must also pay HPD $300. to send an inspector to verify and close the complaint. That doesn't come out of the board members' pocket.

DOB can fine monetary penalties. If those are not paid, additional fines are charged. If those are not paid: the city charges a $5,000 "civil fine". (Cost of repairs is additional and is more money wasted).

Plus: if you are selling your apt. banks won't lend for an apt. with open violations.
You yourself can't close HPD violations. The managing agent must fill out and sign a form and submit it with a certified check for $300. for each violation they are seeking to close.

log off.

as was stated, board minutes contain what the board wants them to contain.

the fact that they wont share (unheard of?) means the board at best does not know what they are doing, at worst, they have something really big to hide (but duh why is it in there in the first place)?

That there could be a future repair, why not disclose it to a potential buyer?

Sounds like a good place to avoid regardless.

Why not tell us the name of the building. Perhaps someone else here lives there and can tell us what is going on there.

The Columbia County Out House Co-Op has not been releasing minutes to a prospective buyer on the 1st floor. Apparently Out House users on the 1st Floor have been complaining about Out House users on the 2nd floor, but the board (all 2nd floor users) doesn't want everyone to know about this architect's design.

^^ Outhouse interpersonal disputes in Columbia County, as reported by huntersburg.^^