Co-op Board

Almost every co-op and condo provides a free apartment for the super. If it's a second apartment for the daughter, then the board certainly wants to keep the super happy. Mine subsidizes the super's garage rent, for a few hundred per month.

Most buildings put staff bonuses as a separate line item in the annual financials, but they can also be rolled up into the salaries line.

You could try suing the board, claiming they're not spending money the way you want, but you'd lose. The things you mention all fall under the business judgement rule.

Most annual meetings are in the spring, so you've missed your chance to raise a stink this year. If you don't want to wait for the next meeting, you could try to get enough shareholders het up enough to call a special meeting to boot the current board out. The process is detailed in your by-laws.

Thank you for your response NWT. From what I understand, the board gave title to an apartment to the super. The super then gutted the apartment and gave to his daughter to live. I asked one of the former board member about why the board did that without informing shareholders, the 4 board members who have been on the board for over 10 years and are close friends, ignored any questions from the other three board members. I don't mind a co-op provide free rent but giving title is another story.

Also, do you know if it is a union requirement to have to replace a maintenance crew when one retires or quits? We have a huge staff and eats up 40% of our total expenses. It would be potential savings for the co-op if we stopped hiring any replacements since many of the crew just hang out and talk to each other most of the time.

Nobody in a co-op has title. The co-op itself has title to the building and land (unless it's a land-lease) or to the co-op unit if it's a condop. The shareholders each have shares and a proprietary lease to their apartment.

Saying "gave title" suggests the board gifted the apartment's shares to the super. Sometimes co-ops have more than one apartment for staff, e.g. for manager and for super. Maybe the co-op's letting the super live in both. If the co-op did in fact give shares to the super, which is unheard-of, then the board that did it stole from the co-op. Some co-ops own shares because the sponsor, but their apartments are rented out and eventually sold. They're like a reserve fund.

Re: staffing, the current contract is on the web somewhere. There might be something about a class-whatever building having to maintain staffing levels. It'd be odd for a board to just keep useless staff on the payroll, if they had a choice, since the board members are paying their share too.

It sounds as if you and other dissenting shareholders need to get together and find out what's going on. E.g., go snacks on hiring a lawyer to demand records, etc.

Oops, "because the sponsor defaulted".

I'm interested in where that extra apartment came from. One possibility, as I said above, is that the building always had two staff apartments. That's unusual, though. Another possibility is that the building had a bunch of extra maid's rooms. They're usually on the back of the ground floor or on the top floor. Before the building went co-op, the landlord would rent them out to tenants for their staff. Then, when the building went co-op, the co-op would keep on renting them out for extra income, or combine them into an apartment, issue shares for it, and sell it.

In other words, as with most things, follow the money. At no time would you find a landlord or co-op letting space sit idle that could be generating revenue, and then just hand it over to somebody for free.

E.g., look at the first-floor plan at http://www.columbia.edu/cgi-bin/dlo?obj=ldpd_YR_1835_MH_001_003&size=large. Next to the super's apartment there're six extra maid's rooms and a couple of baths, handy to the service elevator. After the building went co-op, it could've kept renting them out, or expanded the super's apartment, or turned them into a saleable apartment, or turned them into a gym.

I lived in a coop and a condo that was set up to reserve one apartment for the super. In each case, "ownership" was the coop/condo association. In the coop, the space was 2 small for the super and his growing family, so they bought the apartment next door and combined them. I don't remember how they financed that but assume it was from the flip tax money. The building was large. The flip tax was 15% of the profit on your sale. A number of people who bought during the original conversion retired and moved. Each sale netted a minimum of 150K.