Co-op apartments operate like their corporation, leaving its residents to govern and rule the business. A co-op, also known as cooperative, is a shared multi-unit apartment building where each resident has a shared interest in the entire building’s success through co-op shares. Co-op owners are called shareholders.
There can be hundreds of units in a co-op, which means to govern efficiently; there needs to be structure and hierarchy to manage the finances and make decisions for the co-op.
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Enter the Co-op Board
At annual shareholder meetings, shareholders vote in board members, and then the board members govern the co-op throughout the year during board meetings.
There’s a lot of nuances, so understanding the difference between what happens at co-op board meetings versus shareholder meetings and who makes which decision. Still, we have the complete guide to helping you know what happens at which meeting.
What is a Co-op shareholders meeting?
A co-op shareholder meeting typically happens each year at the beginning of the summer to discuss the annual business of the co-op. All residents must be; invited to attend, and a quorum, or near majority, must be present for the meeting to proceed. The meeting must be called annually, as determined by the co-op’s bylaws.
The co-op board and the management company typically run the meeting and provide updates on the financial health of the co-op and any pending projects for the residents. Then, there is a time for comments and questions at the end of other shareholders. There is also usually a chance to re-elect or elect new members to the co-op board.
The co-board is a small group of elected shareholders who represent the co-op shareholders’ best interest, balance the co-op’s budget, and make decisions on which capital improvements are, needed and how to spend the co-op’s money.
The co-op board must notify all shareholders of this meeting by mail, 40 to 50 days before the scheduled meeting date. If there is no quorum, the meeting must be rescheduled.
What is a Co-op board meeting?
The co-op board meeting is held more regularly, about once a month, to periodically monitor co-op business and make critical decisions regarding the building.
The board is comprised of somewhere between five and ten people, depending on the co-op.
The meetings will only require this small subset of elected shareholders and their; legal counsel, accountants, and the managing agent or agents of the building to attend. The meetings are also generally closed to the other shareholders.
The board must keep minutes of these meetings; however, how in-depth they have to vary from building to building. Each board meeting will need formal minutes record, and they will take attendance, record votes, track finances, review rental and purchase applications, conduct co-op board interviews. The files will be kept in the same way as any business, following the co-op’s financial health and proceedings over time.
Generally, new co-op buyers will also want to review these minutes before finalizing a purchase. The board meeting minutes will go back to the existence of the building.
One of the reasons the board meetings are closed to the general shareholder population is to help streamline decisions. The elected board members create a budget. If 100 people weighed in on the budget, nothing would get done.
If you’re still trying to understand the difference, we’ve broken it down even simpler.
Who attends shareholder meetings?
All shareholders are invited and encouraged to attend. The board of directors and the management company will also participate in and run the meeting.
Who attends co-op board meetings?
Elected shareholders and their legal counsel, accountants, and the managing agent or agents of the building attend co-op board meetings.
How frequently are shareholder meetings held?
Shareholder meetings are held annually, as required by the co-op bylaws. Most co-op meetings tend to take place during the beginning of summer.
How frequently are co-op board meetings held?
Co-op board meetings are held generally once a month. They may be held more frequently if there is an emergency or a particular project.
Are our co-op board meetings open to all shareholders?
No, co-op board meetings are not open to all shareholders.