Living in a co-op can have its perks, such as a 24/7 doorman, state-of-the-art gym, or things even as simple as well-maintained elevators are all managed by your cooperative. However, if you’re living in a building with a poorly managed co-op, your living situation can get bad quickly.
This may be the first co-op you’ve ever lived in, so we’ve compiled a guide for you to know if you’re living in a poorly managed co-op and the next steps you can take to help rectify your situation.
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How To Spot A Bad Co-Op Board Before BuyingHow To Spot A Bad Co-Op Board Before Buying
If you’re about to buy an apartment and are looking at a co-op board, start by looking around the common areas. If these are dirty or an elevator has been out of service every time you visit, there may be a problem.
Once you’re in contract for the apartment, it’s crucial to hire a great real estate attorney to help you with due diligence.
You and your attorney should start by asking to see the co-op board meeting minutes and the minutes from the annual shareholder’s meeting.
These documents will give you insight into what current shareholders (aka residents) are complaining about, any pending projects the building might soon be undergoing, and any money problems the co-op is facing.
It can also show if the board is hard to deal with or inept at executing their duties. Another sign the board is puzzling is how many potential shareholders they reject during co-op board interviews. If the board turns down more than 10-20 percent, they’re likely challenging to deal with.
You’ll also want to see if there’s been frequent litigation against the board and high legal fees. Then, evaluate how much maintenance has or has not increased. If maintenance has increased sharply, with no real justification in the minutes, this can be a red flag. Also, little to no increase in maintenance — and the co-op took a loss that year — can also signal financial problems to come for the building.
When reading the board minutes, see how frequently the board actually meet. If the board doesn’t meet every month — or they don’t keep minutes at all, this can signal problems.
So You’re Living In a Poorly Managed Co-Op So You’re Living In a Poorly Managed Co-Op
Maybe for years, your co-op has been a great place to live. But a few board members have resigned or voted out, or your management company changed, and now things are starting not to feel as great. If you’re worried you’re overreacting, look for these signs that your co-op is poorly managed.
Anyone who sits on a co-op board of directors is required to make decisions that are best for the shareholders at large. But sometimes, co-op board members might stand to make personal money from contracts or arrangements made by the building, which is where things can get tricky.
The good thing about co-ops is that they have strict rules. But sometimes even the board doesn’t follow the rules. If the co-op breaks their own rules or fails its fiduciary duty, you may have a legal case against them.
Unfortunately, no greater agency regulates co-op boards. So, when things go wrong, it can often result in all-out verbal brawls during shareholder meetings or lengthy, expensive legal fights.
How To Handle Your Poorly Managed Co-OpHow To Handle Your Poorly Managed Co-Op
If you feel your co-op is poorly managed, the most important, necessary steps you can take are attending your annual shareholder meetings.
Come prepared with questions, take notes, and vote. If things are so bad, perhaps consider running for the board. You may also want to dispute and motivate some of your good neighbors to run for the board, as well.
If your problems with your co-op stem from rejections of attempts to sell, renovations proposed by the occupant, or renovations requested by the board and all aspects of living in close, proximity to others, be sure to keep all documentation and try to settle amicably. If this is unsuccessful, the documentation will help you in a legal case.
How To Handle The One Toxic Co-Op Board MemberHow To Handle The One Toxic Co-Op Board Member
If you have that one toxic co-op board member who is making everyone miserable, either through unjust objections or causing fights during board members, it’s probably time to remove them.
Before doing anything, check your co-op’s bylaws. The bylaws typically will have a few sections on co-op board member removal and how to handle them. It will be your rule book and guide to dealing with this in your building.
The bylaws will typically state what good cause is for removing this board member.
If you’re currently on the board yourself, consider talking to another board member who you trust, about the one troublemaker in advance. Then, make sure the meeting minutes are kept accurately.
If you’re not on the board, either talk to a board member you trust — or it’s time to run in the election.