Sponsor not adhering to building offering plan

Definitely speak with your real estate lawyer about this. Figure out how much has been changed and you can either try to use this information to get out of contract without losing your deposit and/or try to alter your price. But, then again, I'm sure the sponsor will just print out an addendum to the offering plan to make it all legit and there really is nothing you can do about it. But, regardless, your lawyer should know what to do, if s/he is actually doing their job as opposed to their legal admin.

BTW, which building is it?

I think you answered your own question. The AG office would be a good start. How exactly is the Sponsor not complying with the plan?

We are in the building already. New Cons, so no board-the mgt and sponsors are buddies. We have a large common terrace and all of a sudden the Super has taken over half of it (150 SQ FT +) for personal use. The offering plan clearly states common areas and super's unit. The mgt co is Bellmarc and attny suggests to ask Bellmarc. The sponsor tried to bully me by saying do you want trouble with the Super

Thanks Joepa. Checked the AG office, there are options to complain there

Can you organize the other tenants? You're the owner, the super is not, so this nonsense is best nipped in the bud. Good luck! I remember your earlier post & this is a terrible/ridiculous situation.

organizing tenants is being tricky-everyone is first time home owner, scared because Super will not help them in times of need-as if Super ever does anything major w/o cash. I think a few nasty notes and complaint to AG should work.

I would have my attorney write the letters to Sponsor and mgmt company, as well as file a complaint with the AG. But, you should also try as hard as possible to organize residents. Maybe also contact the media, like one of those news shows that have consumer complaint segments. Or a NYT reporter that might be willing to write up a story about it. This is a buyers' market, and you should not have to be dealing with this when buyers now have many more options than they used to. Maybe you can also threaten the sponsor with negative publicity. This is ridiculous--especially that they're threatening you with retaliation by the super--that's verging on the criminal.

There is a legal limit on how long a sponsor can control a new development for, which I believe is the lesser of 5 year from the time the building is opened or 1 year after 50% of all the units are sold. That provision is required language in the offering plan: the sponsor specifically agrees to relinquish control after that time.

Therefore, once the sponsor no longer controls the Board, you can elect an independent one.

Furthermore, there is something called the Federal Condominium and Cooperative Abuse Relief Act, which under certain circumstances allows shareholders to break any sweetheart contract made by the sponsor with itself or with anyone else. So if the sponsor is related to Bellmarc, or offered to pay it non-market rates, or entered into a long-term contract to the detriment of the shareholders, or is receiving an ongoing fee from Bellmarc, you can break the contract. Typically what will happen is the other party will sue you to enforce the contract, and it goes into Federal Court.

"Scared of the super"? That's a LOL. Union or not, if he has encroached upon space that is not his he has violated his employment contract and if he does not relinquish it he can be fired summarily. Check how much the super makes - it is perhaps the best job in all NYC: a free place to live (with outdoor space, too!), free cable, free parking, AND a good salary with benefits. If you advertise a job for a new super, you'll get hundreds of applications.

You must be extremely careful with this and cure the situation now, because under New York State law if someone occupies property that is not his for a certain amount of time, and that occupation goes unchallenged, then the ownership of that property automatically inures to the encroacher. So by occupying a common space and using it as his own, the super is setting the groundwork to hold onto that property forever.

You need to talk to a lawyer.

Steve -Agree on many inputs. Super get 75K PA plus apt etc. The Supers unit is owned by the board, not the Super, so he cannot control the land. Not necessarily the best job in NYC, but still great compared to the handymen who do all the job.

This 5 yr control of the board part is something to watch for.

I find it funny why residents are scared of a Super who ripped off everyone when the new building opened up ($1000 for painting a bedroom), he is completely replacable and if he ever refuses to show up at my apartment in case of emergency I will raise hell.

It is the sponsor that is driving me nuts. All this grief to have a washer dryer in the unit (that is the biggest plus with new cons)

My lawyer suggests I complain to Bellmarc first because they manage the building and the Super

I suggest you document it all and ask your lawyer about filing a derivative lawsuit if the super insists on encroaching upon common space. Ask your lawyer about the Condominium and Cooperative Abuse Relief Act if Bellmarc is cowtowing to the sponsor: threaten action. That 5-year limit is ONLY if over 50% of the units haven't been sold. It's been a while since I looked at the details (was involved in a similar suit at 350 Bleecker Street Apartment Corp., which they lost (and I opposed) - Google it). Check your offering plan.

Have your lawyer write the letter - it's worth the $100 it'll cost you.

The Super to me is like the Wicked Witch of the West - Begone, you have no power here! (That is so gay on my part!)

Thanks Steve. Since all these morons post their e-mails on websites, still are not aware that one has to exercise caution while answering e-mails. I have plenty of ammunition (very nice back and forth communication with the sponsor who chose to defend the act in 6-7 e-mails). As advised by my lawyer I will contact the managing agent first and see their response .

Our building is 80-90% sold. The offering plan clearly states which unit belongs to the Super and how many common terrace/outdoor areas that are common to residents.

If your building is 80%-90% sold, you should have no problem getting the tenants together. Read the bylaws about calling a special meeting of owners (or whatever they're called in condominiums in NY - I own a co-op) to oust the Board if it was named by the developer. Once you oust the Board, take a look at the managing agent's contract.

Steve-Could not find your lawsuit, exact google key words please-the parking company lawsuit comes up when I try searching. Did you try lodging a complaint with NY Attny General? thanks

In organizing your fellow owners, keep in mind that the super is not only replaceable but no-tippable as well. And that can be brought to his attention to turn his attitude around pronto, without the delay of legal action and the obstructionist maneuvers of management/sponsor.

IMO Super should not be tipped (salary close to 200K with benefits)

It was the parking lawsuit - trying to break a sweetheart deal for a garage lease. Depending on the terms of the Bellmarc contract, you may be able to use that same law.

Yes salary close to $200k with benefits, and most supers don't do very much but delegate.

Ours can paint your room for a thousand bucks-did that when the building was new and Bellmarc was not letting contractors from outside in to the building. I think its better to keep the best handyman in the building happy (have been doing fine for past five years with that Mantra). My neighbour got a nice response from the sponsor on the terrace-"You have such a nice Super, try and do everything to keep him"
ANd this beighbour was one of the victims who paid $1000 for 1 room. All the people entering Chelsea Stratus will have fun with the dream team they get

Interesting update-tried to post this issue on our online residents' community and guess what-Bellmarc did not let my post go through. The battle is getting interesting now.

You can start a user community on yahoo, notify all the residents. A flyer under everybody's door might work, too.

On my agenda-to slip notes. Few people I talked to got furious. I have e-mails of about 20 people through a previous round of activism related to getting our punch lists done. The problem is so many people are too busy, so many have parents buying the unit for them..still we should get a critical mass. Or else I go solo, if I have paid over a million for the apt, I can pay $1000 in legal fees.

I had a similar fight at my co-op, the Board refused me permission to do an alteration, a floating laminate floor with high-grade underlayment whose soundproofing qualities far exceed carpeting, and they wouldn't give me a reason why, because they didn't have one, because I said that if the installed product didn't live up to expectations that I would carpet over it 100%.

How can you deny that?

But they did, and I went to the shareholders and at the second shareholders meeting last year got pilloried in a scene something out of Kafka's The Trial, but when I pointed out that our proprietary lease hadn't been updated since the day it was written, which is the day after I was born, in 1960, and that the Board was operating illegally, I got them to act. Last week we amended the proprietary lease and one of the changes was that in the case of a renovation, the Board MUST provide a reason for denying the application, so that it can be cured.

I think you need to point out that if the super is allowed to keep that space for a certain amount of time, it becomes part of his apartment despite what the governing documents say. Ask your lawyer what the name of the doctrine is, I forgot, but it was recently ratified by the Court of Appeals (the highest court in NY).

You may want to tell Bellmarc and the Board (whatever it's called in a condominium) that if they do not cure the situation you will be filing a derivative lawsuit to enforce the offering plan. Again, I am only familiar with co-op law which is different, but if your lawyer insists on you going to Bellmarc and they've already been unresponsive, I'd get a different lawyer.

Maybe one of the owners can help.

Thanks Steve. THings are moving a bit at our end. I will talk to a different lawyer.

Keep us posted.

mmm- i would also tackle the mgmt company, one of the best mgmt companies out there is Penmark, they would never allow something like this, i have lived in several buildings in NYC and Penmark is great, other mgmt companies just suck- perfect example current mgmt company is Rose- and there was some construction being done- so for a brief moment there was mice in the building (freaked out, not for what i pay, and where i live), i called the mgmt company and they said "welcome to NYC" 10 minuets later i'm calling customer #9 (he's my landlord) to have this resolved, Rose mgmt got scared and quickly apologized, the point is the mgmt companies can be fired too with the super. Attack the Mgmt Company first- don't even bother with the super-

dledven-point well taken. We discussed this issue amongst us and concluded to just deal with the management company solely on this issue.

stevejhx-can you share the lawyer's name with us? thanks

mmm, your CONDO elected board of directors needs to use real estate lawyer anyway. Great if he/she is living in the building and a member of the board, but if not hire outside one. The board should pay for it, not you personally.

agreed with barskaya - first go to the board, tell them to contact the management company. Go as a group, sign a petition. Only if they refuse to act should you threaten them with a derivative lawsuit to enforce the offering plan.

A complaint with the AG's office wouldn't hurt, either, though management companies are an unregulated bunch in NY (probably why they're so sleazy).

I've never owned a condo in NYC so I couldn't recommend a lawyer, but maybe there's somebody in the building who knows one.

If I were you I'd read the NY condominium law and the offering plan and the AG's regulations carefully, to try to figure out how best to approach a problem. When dealing with things like this I don't like to rely solely on what my attorney wants - I prefer to know what I'm doing and make the attorney tell me why what I want to do isn't best. They hate it, but then of course they work for me. :0

Its new dev-no elected board members. These boards can be dangerous-all the brokers living in the bldg want to be on the board.
The AG website is helpful. We will send a letter to them and copy the management company
http://www.oag.state.ny.us/realestate/documents/Condo.Problems.pdf

mmm, according to you building is 80-90% sold. It's more then 50%. When are you planning to have an election?

Look at it this way. Who is more dangerous: board, that governs the building, by conveying owners interest to the Mgmt. company that they hire.
OR
super that gets part of common space.

mmm33, barskaya is correct. Read your offering plan. There is a stipulation in it that states when the developer must give up control. I believe it is 1 year after more than 50% of all the units are sold (meaning closed). At that time, you can oust any appointed board member.

Let the brokers be on the board - it makes no difference, & it's better than the appointed board. You can always (I think with a condo) revise the bylaws making a provision on conflicts of interest.

At the moment they are all the same-Sponsor controls the board, they appoint the management company and that appoints the Super. Then there are brokers living in the condo that have their own agenda (looks like these brokers are very bullish, because most people will have to wait 2-3 years to sell before they recover the decline and the closing costs/taxes)

Doesn't matter - the developer MUST relinquish control by law and by the offering document. That's when you take action.

The offering plan will contain language similar to this (which is for a co-op):

"(a) In accordance with the requirements of Section 352-eeee, the Sponsor agrees to guarantee the
obligation of the Managing Agent to provide all such services and facilities until such time as the Sponsor surrenders control of the Apartment Corpoation's Board of Directors."

"The present officers and directors, each of whom were selected by the Sponsor, are:

[...]

These officers and directors will resign in favor of directors to be elected by all shareholders at a meeting to be held approximately 30 days after the closing. Directors shall be elected by a plurality of votes cast at a meeting at which a quorum shall be present. The entire number of directors to be elected shall be voted for at one and the same time and not separately.

"Notwithstanding the foregoing, however, Sponsor as a holder of Unsold Shares and other holders of Unsold Shares shall agree that, after the fifth anniversary of the Closing Date, or whenever the Unsold Shares constitute less than fifty (50%) percent of the shares whichever event first occurs, they shall not exercise voting control over the Board of Directors."

So, read what your offering plan says. The initial Board of Directors must resign at some point, not less than when 1/2 of the units are sold, or 5 years have lapsed since the closing date. This is a requirement of the NY Attorney General.

Once the initial Board is ousted, I believe you can remove the managing agent appointed by it.

They can control till Oct 2009. Though per attorney general's website they should stop controlling the board if the condo is 50% sold (its 90% sold) now. Will give them till monday to respond, then send note to AG