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As a co-op owner in the 1990's I was on the board of directors for four years (to 2002). I still have a co-op apartment as an investment. We came across quite a few problems like this. Rent stabilized tenants are in a class by themselves and the pro-regulation laws are problematic.
I mention this now because the newly Democratic State Senate is about to consider a slew of bills written by the pro-regulation lobby. If passed, these bills would seriously aggravate the situation for co-ops and condos. Especially those that have a significant number of rent-stabilized tenants.
A co-op owner is a shareholder by contract. And by contract they are assigned voting rights according to the square footage under their shares. A rental agreement cannot assign such rights unless the original proprietary lease allows the assignment, which i doubt.
Renters don't have a say in any co-op or condo boards. If they do, then someone seriously needs to look over the regulations the board follows.
Renters can demand that a service, like doormen, be maintained even as the costs of said service goes up astronomically while their rents increase at the pace of stabilization increases.
Isn't it true that if rents top 2000 rent stabilization no longer holds? If so, it seems like a matter of time til the prob is resolved...would have read the link but as another poster mentioned it is very out of date.
What kind of problems are you referring to?
There are rules and regs associated with being a rent stabilized tenant, and I also believe a board can vote to, say, establish an "eviction" clause where those who do not buy in can't stay, no? Seems cruel, but I am fairly certain that options like this exist.
Again, what problems are you referring to exactly?
Renters can demand that a service, like doormen, be maintained even as the costs of said service goes up astronomically while their rents increase at the pace of stabilization increases.
The OP was talking about co-op boards being run by renters, which won't happen. Even so, no one is stopping to Co-Op board from not renting the unit or renting the unit at market rates. Especially considering that condos were very rare in the city until the 80s, certainly not to the point that they are at now, so co-op boards that are subjected to rent stabilized tenants are substantially smaller than some of the housing pundits will have you believe.
Renters can demand that a service, like doormen, be maintained even as the costs of said service goes up astronomically while their rents increase at the pace of stabilization increases.
Yes. The example of doorman service makes the point. The key paragraph in the article states that "boards of directors can be legally prevented from changing, reducing or eliminating a building service that they consider no longer needed or too costly to maintain. If rent stabilized tenants want the service continued -- particularly since the cost is not their responsibility -- their "rights" take priority over the business judgment of the board." We had to raise the maintenance fee because of that. And of course it didn't cost the rent stabilized tenants a penny.
Several posters on this thread misunderstand the article or simply misstate facts. I'll try to address each in the order they were stated:
- The article does not say that a rental agreement assigns voting rights. What it does say is that the restrictions presented by the rent stabilization laws prevent the co-op board from making business decisions in the interest of the co-op.
- The point of the article is every bit as relevant today as the day it was written. The restrictions in the rent stabilization laws have not changed one iota.
- The problem will not resolve itself because of the $2000 rent threshold. The majority of rent stabilized tenants in co-ops are very long-time low rent tenants. The small RGB rent increase each year will not have a significant effect, especially in the outer boroughs. The effect in Manhattan is somewhat greater because of the higher rents. And, btw, that threshold is in serious danger of being sharply raised or even eliminated because of tenant lobby pressure on the State Legislature. So whatever good it may be doing will be eliminated. One very important point: It does not matter whether there are one hundred rent stabilized tenants in a co-op or just one. The problem still persists - a service cannot be cut (even to one tenant).
- The board cannot evict a rent stabilized tenant.
- And finally, ddhboy said "The OP was talking about co-op boards being run by renters". Where the heck did you get that?
Well, I do know one woman who had a coop on the UWS whose maintenance was virtually doubled, and she did say that some of the tenants were renters who were not really affected as you say, since the coop had to foot the maintenance bills. She wound up moving to another state since she couldn't afford it.
Since it's an investment property, do you think it would be wiser to sell at some point if it looks like the situation won't get better any time soon?
Although I do sympathize with the plight of those who are priced out of their rental homes, I definitely see the owner's point of view as well, providing they aren't harassing or otherwise using draconian tactics to get folks out. As a former Manhattan resident, I have to admit that it annoys me to see long time residents whining at any and every increase, since prices to maintain bldgs do rise. It's a sense of entitlement about living in the city's most expensive borough, when they could probably find a more affordable apt elsewhere.
Why should they get to stay when so many have been priced out or can't afford a toehold there in the first place? Though if they are elderly and infirm, this makes it more tricky. And this doesn't apply of course to the wholly unscrupulous landlords who cut off services, evict folks without cause, harass etc...and this often happens in poorer sections/boroughs rather than in Manhattan.
People have to face the facts...many apts are going coop, and hey, the old days are gone. Welcome to the new New York....
There's also the possibility of a board that is not financially qualified enough to decide which services they want to establish in the first place. My old coop raised the flip tax to an incredible 17 1/2 percent for sellers who had been there before conversion, but in that case I think it was someone fair. But it was done to avoid a maintenance increase, which was in part avoided to placate long time board members, so the self serving actions of a board (and sometimes illegal actions) have to be addressed as well. In other words, I think the finances were a bit of a mess.
Boards are notorious for infighting and fiscal irresponsibililty IMO. My bldg installed a management company about a year ago and it has made a world of difference. Also increases the value of the apt. (My new coop that is).
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