Sometimes I receive emails or comments from TrueGotham posts that are so unbelievable that they warrant their own post. Check out this horror story from a Co-op shareholder and former board president:
Here’s my story
I have owned a 4 level co-op on 38th between park and Madison I was president of the co-op from the time I made the purchase about 4 years ago. At the time I moved in, the co-op was in trouble financially losing about 25K a year and had a few thousand dollars in reserve. During my term as president I made numerous changes and basically took the building from the brink of bankruptcy to having more than 400K in the reserve fund. A few changes included writing a rules and regs book for building procedures and selling a rent controlled apartment (with tenants in place) that only pay a fraction of the going rental rate, for 375K. Everyone said it could not be done. I also instituted an increased flip tax from 1 to 4%, plus raised maintenance to levels that made us slightly profitable every year
It gets better, One of the board members spent a week with us in our home in Utah for the Christmas holidays last year and at the end of their stay we offered the maintenance check for the apartment and she said "No, that’s OK, just mail it." 5 days later we get a note from the "board" that out check was late, and we owe a $50 late fee ????
12 months ago I was forced to sell my business and move to Utah for employment. We were fortunate enough to sell our apartment to a very well qualified buyer who was turned down by the board. She had all the qualifications; excellent income,good assets, wanted to participate on the board(self managed building wants that), even willing to put up 1-2 years maintenance in escrow. vs me, who is close to stopping payments on the mortgage plus the apartment has been vacant most of the time for a year. I wrote a letter to all the shareholders explaining that this was a bad business decision,aside from the fact that I saved the building from ruin. "only one reply, from a new shareholder, nothing from all of my "friends" who thought nothing of knocking on my door ,day or night for anything, personal or otherwise.
It gets better. I thought I would rent the apartment .The board had told me in Dec that they were considering instituting a rent fee of 15% (that would mean $1800 a month to them for my apt,if it rents for suggested $12,000 month), all of a sudden, I have new partners. They told me before the new rule went into effect that they would never try to collect that from me, only new shareholders. You guessed it, seems that they have short term memory loss on that subject.
So I thought about splitting up the apartment into 2 or 3 units (as it was one 3 separate units) but that would change out tax status and cost the building money (I was the one that got our taxes reduced in the first place) One of the existing owners offered to buy one floor of the apt and combine with hers, that would not change the total units or the tax status,plus we had an offer for the other 2 floors. the only condition was that the existing owner wanted to rent out that apt until she was ready to move in. You guessed it, board said no to the rental, and the deal was dead. they would rather have my 4 floors vacant.
I own 26% of the building,If I go under, the entire building becomes insolvent and nobody can sell their apartment or get financing
I need help
Thanks for listening
It seems to me that the best choice for this particular owner is to sell and sell fast to sever ties with a clueless co-op. That said, I wish I could hear the co-op’s side of the story.