Last year our SH meeting was three months late, due to the fact that the financials were not finished. This year, there are no financials but the board is going through with the meeting. Which, since the financials are the main intrest -- is a waste of time. Its in our bylaws that the financials have to be completed by the May meeting. And most SH, instead of blindly moving foward, would prefer to wait...

Does anyone know if its legal to hold a shareholders meeting without the financials?

Alice, if your P.L. or by-laws state that you must have the financials done by a certain date, and that the annual meeting must take place on a date after that, you don't need to postpone the annual meeting until the financials are done.

However, if your P.L. or by-laws state that the financials must be done before the annual meeting, then you're probably out of luck.

Either way, please check with your co-op attorney (I'm not a lawyer -- just guessing here).

Steve

ba: Coops must hold annual meetings. If your board won't do it, ask your attorney what to do. If he's no help, you can request a "special meeting of shareholders". It's Article II of most coops' by-laws. Any shareholder can make such a request. It must be submitted in a letter (send certified, return receipt) to the board secretary and must include a petition signed by shareholders holding at least 25% of all outstanding shares (25% of shares, not the shareholders). If this is done the board must schedule a "special meeting" and send notice of it to all shareholders not less than 10 or more than 40 days before the meeting.

Important: Per by-laws, ONLY business stated in the notice to shareholders can be transacted at a "special meeting" - nothing else, unless ALL coop shares are present at this meeting in person or by proxy.

So if you want this meeting to, in effect, be your annual meeting, you better make that clear in the letter you send with a petition. Say something like: "I and the signers of the enclosed petition representing holders of at least 25% of all the coop's outstanding shares hereby request that a special meeting be held, at which all business transacted reflect all that which would be transacted at a 2007 annual meeting which has not been scheduled as required." Check the wording of your letter with your attorney and also ask in the letter that the board reply promptly to this request.

The annual meeting and annual report don't have to be tied together. Otherwise, your BL would specify it. Obviously, it's good to know that there was closure from the outgoing board and a report was rendered from the previous year's operations.

Finally, the annual meeting is prescribed to take place (under our BL) to take place a certain week in May, but reality is that at one time it was pushed until October. Approx. 4 years ago, we try to schedule it immediately after the release of the annual report.

Reasons for delays in the annual meeting:

1. Scheduling conflicts: if you invite your co-op counsel and independent accountant as well as your management, there will always be difficulties in trying to come to a day in the calendar in May or June. REASON: These people are also hired by other co-ops and guess what??? To this you add the board schedule and the scheduling process becomes FRUSTRATING at least if you do the coordination.

2. There are times in which the annual report is delayed because your accountant has its own internal problems -- staffing issues, etc and does not get in time to release your audited statement until late April or May.

3. Finally, since the annual meeting takes place 5-7 months into the new year, the annual report loses to a great degree its relevance. Don't get me wrong; as a fresh piece of reporting is like reading the NYTimes that you got 3 weeks ago while you where on an extended European tour: you may save your favorite sections, but the current content you may are not bound to pay too much attention.

This is why I advocate for boards to publish more updated income statements (at least on a quarterly basis) with a "disclaimer statement" regarding the fact that the figures are unaudited, subject to change due to reclassifing of expenses, etc. This would add transparency and when the time of the annual report comes, you do not only discuss "old" info, but new one according to the current operations to add more relevance to your annual meeting.


AdC

I agree with AdC re: the annual report with one exception. He's for publishing a financial report for owners at least quarterly with a "disclaimer" that it's unaudited, etc. I know boards at coops who told me they wish they'd never done this. I'm just noting here what they told me...

-- Owners only know what they see. It's hard to re-program their thinking if a figure in a quarterly report jumps out at them in a negative way then you try to explain it was reclassified into several categories. It may reflect very reasonable annual expense for each category but this isn't what owners remember seeing. It's like getting a new boiler with state-of-the-art sensors/monitors. Owners don't see that. All they care about is having heat when it's cold.

-- One coop distributed the monthly report (that the board usually gets) to save accounting the trouble of preparing reports just for owners. It prompted many calls/questions. Unfortunately too, whoever put together the first mailing to owners included the "owner ledger" pages so everyone saw all the maintenance amounts, who was late in payment, etc. This caused an uproar. It was an "accident" at one coop - but maybe it could happen at any coop?

-- Another coop said many owners don't read (or understand) the annual report and those who question or complain about expenses are few and usually the same ones every time. The board decided it was a waste of time to publish quarterly reports for this reason.

Some boards told me they think the only "financial" issue most owners want to know is if there will be a maintenance increase or assessment. They come to the annual meeting to find out, and to ask why the coop pays to repair a pipe in their wall but they have to pay to re-paint the wall.

I agree that "old" info given, say, quarterly with "new" info based on current operations or audited reports can add relevance to an annual meeting. I'm just not sure if such comparisons are relevant to enough owners to warrant the extra time, effort and cost they entail.

I'd like to hear other opinions on this. Thanks.

Years ago I worked for a major corporation that decided to make employees more knowledgeable of their department or division operations by forcing heads of divisions and departments holding quarterly meetings to review operations with ALL the employees.

While there was much window dressing on the part of managers, still there was awareness of what was going on and WHY certain business prospects did not go ahead, why the business went ahead, etc. As an employee, I used to hate such quarterly meetings at first, then became fond of them as it kept me in touch with "why some heads were chopped" or why we all got a bonus or why more effort was required in certain areas.

Probably inspired by such an example, I decided to publish a newsletter on a quarterly basis approximately 7 years ago very much reflecting the operations. I don't care if Joe Blow had a baby or if the exterminator is coming every Saturday. The Newsletter is a publications dedicated to explain operations from the board's perspective with some ounces of optimism.

YES, I spend over 20 hours of my time putting this publication together: thinking of topics, and slanting the publication so that the shareholders see the point of the board challenges. Example: In 1995 the co-op did its fuel surcharge and, it was explained WHY it was necessary: if the oil went from $1.00 to $1.25, a 25% increase means 25% in your oil budget for oil. IN 2006, the oil continued to go up, so it was rolled into the budget, not as a surcharge, but as a permanent way of life. This was again explained to shareholders and why the decision to roll the surcharge with maintenance. Therefore, it is in this type of venue that I publish the quarterly income statement.

You may say that this is a DRY publication. Well, the co-op board is there to work in a professional manner for the shareholders. Consequently, a board that is proactive in providing information cannot be accused of secretive, or doing things without people's knowledge.

In fact, the annual meeting is extremely simple. Just a reiteration of our summary of operations that is usually published as the first issue of the following year (since December figures are published after January 15th). Consequently, you EDUCATE your shareholders to the point in which increases and assessments are seen, if not like God's sent gift to the shareholder, something that is unavoidable to continue good services.

So, if there are boards who tell you otherwise, it is because they may be publishing their results without any effort to brief and educate your population. That's my opinion.

AdC

AdC, I agree with you. Shareholders elect people to a board and entrust us with their money. We have to be accountable to them for where it goes and why. The comments in my last e-mail were from board members I know in other coops. We're open with shareholders and educating them is ongoing. We don't have newsletters but we have "issue letters" in which we explain an issue and related costs. We also send them to shareholders to keep them alert to issues we have to face, like soaring fuel prices or a major capital project so nothing is a surprise and they understand what's involved.

We have "open forums" - lobby meetings a few times a year so: 1) shareholders can discuss any issue with us, and 2) new shareholders can assimilate into the "community". Our people also feel comfortable calling mgmt with questions because they they get straight, logical answers. By annual meeting time, we aren't battered by irate shareholders because we "brought them along" with us and didn't keep them in the dark about important things.

You're right, AdC. Educating shareholders is good strategy. Reminds me of what my dad used to say that has no meaning here: Education is the horse and experience is the jockey. Just a passing memory. :-) There are always people who won't understand, or only see what they want to see, but I believe being open, honest, communicative and professional can't be anything but good for a board - and for a coop.

it would be under the fire code. where i douldnt know. Your insurance company may know as doormats are an issue with most insurance companies.
pg

The whole thing (if there is NO fire code for these) boils down to liability for the building:

1. If I were to quote anything, it would be the proprietary lease to which the person subscribed out of free will: what IS defined as CO-OP PROPERTYv. what belongs to the assigned shares. The board is free to legislate on the Co-op property even without any governmental law. It belongs to the co-op and it's the board responsibility to see to it that nothing in these areas become a liability that will cost money to its shareholders (WHERE IS FIDUCIARY RESPONSIBILITY???). No wonder TV antennaes including satellite dishes may be banned from the outside structure if you wish to clamp down on their installation. IN fact, the government has a strong statement for these.


2. The mat is the shareholder or renter, but it is placed in a common area under co-op responsibility; thus, you can declare it "ABANDONED" property and eventually dispose it if knowing the owner you provide notification (consult your co-op attorney for best procedure) and if your House Rules state "No articles in hallway including doormats -- well perhaps you specify doormats separately as a no item in hallways, for the case is the same.

3. If the infamous doormat or object in the hallway is the cause of someone's fall, the building is dragged into the liability and not the owner of the mat, who can tell you it was "abandoned property; after all, it was in co-op property.

AdC

Under the fire code it falls under "Obstruction of Egress".
Pg

The problem with that approach, ba, is that the co-op could be liable if someone trips on a doormat while trying to exit the apartment in an emergency. If you were a co-op owner (and perhaps you are), would you want to pay an assessment to cover the legal costs involved? Or would you prefer to have your neighbors obey the law?
Steve

that is absolutely ridiculous. If people triped over doormats on any kind of regular basis, mankind would not not have invented the doormat.. that is stupid. even in a ruch the chances are incredibly slim of tripping over a doormat unless you are a drunk.
all respectable coops I know have doormats - especialy ones with tile floors (ie the floor and hallways are fireproof). sorry - anyone who tries to make it their petty agenda to remove their nighbors doormat is a dork. I checked withthe local firehouse - they do NOT care - they tell me the average doormat is not a problem and this is only the kind of thing that concerns buisybodies.

Big Al,

I am sorry to say that doormats or anything else that is stored in the hallway is very dangerous, if there is a fire or a blackout the hallways are smokey/dark and yes people will trip over them I'seen happen already in my building when there was a fire on one of the floors.

You want a doormat, you must lay it inside of your apartment door.

Big Al,

I am sorry to say that doormats or anything else that is stored in the hallway is very dangerous, if there is a fire or a blackout the hallways are smokey/dark and yes people will trip over them I'seen happen already in my building when there was a fire on one of the floors.

You want a doormat, you must lay it inside of your apartment door.

Sorry to have to disagree with you on this one, Big Al, but you're wrong.

It's an FDNY ordinance that doormats are prohibited.

That said, my coop does not enforce the rule -- although we do point out that if we are fined because of an individual's misdeeds, the building pays the fine but puts it on the individual's account.

I don't think the rule refers to doormats at the entrance of a building, just those in front of individual apartments (but I could be wrong).

As for being drunk ... if a fire happens in the building on the night I'm drinking my favorite bottle of wine, and when I evacuate my apartment I slip on someone else's doormat and break an arm or lose a tooth, I would not hesitate to seek damages from the doormat's owner.

As for the local firehouse ... they may not care, but that doesn't mean doormats are not prohibited. (Just try asking a cop to write a ticket for someone honking his horn because traffic isn't moving fast enough -- it's illegal, but do you think the cop cares enough to write a ticket?)

Steve

idiotic. there woukld be no assessment - if some moron managed by some miracle to trip on a doormatt - (and hello probably it would be his own doormat since it is in front if his/her door) - buiulding insuracne covers this kind of thing.

I understand, and respect, all the pro and con comments made here about doormats. We never prohibited them, but in June '05 when a new owner was moving into one of our apts, a moving man tripped on the doormat as he was carrying in a marble pedestal. He dropped it, fell down against it, and knocked out two teeth. Our co-op's insurance had to pay all his dental expenses, about $10-12K. Since then we don't allow doormats anymore.

I just wanted to say that you don't have to be an "idiot" or a "moron" to trip on a doormat. Accidents do happen.

I totally dig it - sorry about prior emails postings - I just felt the vibe of a buisybody neighbor coming through and am very sentitive to that. BP - you are the best web- poster out there. you say things in a totally unoffenseve and wise manner. thank you.

And who pays for building insurance, ba? You do (if you're in a co-op or condo) through your monthly fees. As for idiots and morons, well, they're the kinds of people who are most likely to sue. If you can make a claim to your insurance company, your rates will go up -- just like car insurance after an accident that's your fault.

But insurance is unlikely to cover the doormat problem because insurance rarely covers illegal actions -- such as violating FDNY ordinances.

So if there's no insurance to cover the lawsuit, and the building loses, it comes out of the building's pockets. Which are yours. So unless your building has a huge reserve fund, you and your neighbors would likely have to pay through an assessment.

Here's a suggestion. If you don't like the law, try to change the law instead of ignoring it. Write your city council member and complain to the FDNY.

Until it's off the books, boards have a duty to enforce it.

This is the 1st time I used this site. Answers were from absolutely incorrect to helpful in pursuit of fact - not opinion. The law does not specify doormats BUT multiple dwellings public halls.
The law is "means of egress shall be kept free and clear of encumberances at all times....
Abstract: Rules of the City of New York -. Title 28 Housing Preservation and Development §25-221 Obstruction of Exits Used as Means of Egress in Case of Fire in Various Multiple Dwellings. (a) In every multiple dwelling, public halls, stairs, corridors and passageways and every part thereof used as means of egress sh
http://24.97.137.100/nyc/rcny/title28_25-221.asp
size 2725 bytes - 4/3/2007 4:23:06 PM GMT

Obviously, even the law could be debated as to what constitutes an "encumbrance." In other words, we are talking about a claim or liability that is attached to a property. So, those who have stated "liability issue" may not have quoted the law, but know that a mat may pose a liability issue to the building.

A building inspector may or may not see a mat as an encumbrance just like the New York Times or other paper left in front of an apartment may be taken as an encumbrance. So, a mat just like a paper may be potential encumbrances in a hallway as opinions are so divergent.

AdC

I like your reasoning. Would you consider that a newspaper: is removed daily a doormat is always out.

up to the building inspector to decide is not in my experience how a law works

why escalate a difference.

There was a interesting film introduction to the Tribeca Film Festival with a tenant knocking on the door of another tenant who is keeping an alligator in his apartment.

On the grounds it was not specifically prohibited by the Proprietary Lease

Sorry. I just pressed the response without one. But here it is:

The law in all its wisdom is wide open to cover ALL circumstances that may cause an encumbrance (potential liability). Obviously, something becomes an encumbrance, because there is a claim and there was a cause to the fall.

What is a potential liability in a common area?

1. A doormat (yes). It can become an encumbrance because someone may cause someone to slip and fall.

2. A newspaper that is not removed the minute it was dropped in front of a door. Yes... a person who just happened to come after the newspaper guy may just trip and fall.

3. A carpet that is not properly stretched or is torn, which may cause the heel to catch and trip and fall.

4. An uneven pavement made by a defective tile - trip and fall.

5. The wax on the floor that may cause a slip and fall, even when the floor is not wet.

YES... these are encumbrances in a common area. Not just a bicycle or a refrigerator or the old milk box in addition tot the doormat.

This is why when you are on a board or you are a manager of a builidng you look for these types of deficiencies and correct them. The wax example is just a problem in many bulidngs. In fact, I have seen buildings that wax was totally removed from a tiled floor to avoid slip and fall claims. For many years it looked terrible, but the company could not take any more of these types of accidents.

AdC

AdC - I can see why bldgs would stop waxing lobby/hallway floors to avoid slip-and-fall claims. There are non-skid tiles that come in many nice colors/patterns-like the ones people put in bathroom and kitchen floors. I know 2 bldgs that installed them in their hallways and they haven't had any complaints or accidents. Maybe a good alternative?

Thank you, BP. I have seen wonderful no-wax tiles and I have a wonderful ceraminc tile in my kitchen that is extremely good to prevent slip and falls.

The point I was raising with Lefty is that an encumbrance is not an object but a "potential liability." Therefore, the law is so comprehensive that a board, landlord, or management company must look for potential liability in common egres areas (e.g., hallways, lobbies, internal evacuation stairways). This is not just limited to a bike, a shopping cart, an old milk box or lab box in a commercial space, but to other things like an unstretched carpet or a slippery floor due to wax. IN fact today, I have a great problem with the cable company and their subcontractors who just out of carelessness throw to the floor the metal ends or connectors to the pavement. These metal connectors become real encumbrances if someone where to step on them. Therefore, I ask the staff to make sure they let the subcontractors know what is expected of them at the end of the job and even call the cable company and religiously report their subcontractors if they leave junk on the floor.

So, common hallways are supposed to be free of encumbrances. It is up to those with responsibility over common space to legislate what they will be tolerant to allow in their hallways, i.e., mats (yes-no), newspapers, etc.

AdC

AdC - I agree re: what constitutes a "potential liability. BTW, we had a problem with cable men leaving junk on floors too. It was resolved but sadly. Before our no-dog policy, a SH's puppy ate a bit of cable from the hallway floor. The cable man working in that hallway didn't clean up and was leaving as the SH left his apt. It happened in a flash. Exposed filaments on the cable punctured something and the puppy hemorrhaged. We had hallway video of the whole thing. It went to court and the cable company was found liable. They've been very conscientious ever since but what a shame that it had to come about that way.

Doormats are not permitted:
1. They are a tripping hazard
2. They interfere with vacuuming by our maintenance staff
3. They interfere with carpet shampooing by our maintenance staff.
4. What if the maintenance staff does not replace a doormat properly and either the resident or another person trips?
5. Sadly a suit arises in today’s litigious world
6. We send a letter, if someone places a doormat outside their door
7. The rules prohibit doormats – simple, that’s it.

Insurance you say!
o Don’t pass it off to the insurance carrier.
o What happens when you have a claim?
o The carrier settles rather than litigate, simple as that
o What happens when you have many claims?
o Your rates rise? Or you are asked for a higher deductible.
o Either way the building bears the “financial” burden.
o What happens if you have too many claims?
o Your carrier cancels your insurance policy, just as a carrier would cancel an automobile policy when there are repetitive claims.

If someone wants a doormat, it is best placed inside the owner’s apartment.

Bronx Board Member: There are service dogs called "hearing dogs." They are specially trained to alert owners to sounds by pawing or bumping them then to go back to the source of a sound - doorbell, smoke alarm, microwave oven bell, baby crying. This way, they lead the owner to where the sound is so the owner can take care of whatever it is.

All dogs in NYC must be licensed. People with disabilities have to submit a letter from their doctor to get a special license for a service dog for which they get a certificate from the City. There are many programs that train service dogs, and people can also train these dogs themselves.

It's odd for a "hearing dog" to bark at every sound since that doesn't help the owner. Call the MOPD (Mayor's Office for People with Disabilities) at 212-788-2830 to get info on service dog training and if an owner is responsible for barking, etc. that affects neighbors in the building.

Thank you, BP for such a quick and helpful response! I will call that number and do my homework. And maybe the dog just needs additional training.

Hope the MOPD can help you. It just happens that I have a longtime friend who's blind and has a service dog; that's how I knew a little bit about them.

See previous post and responses. Similar issue was covered a while back.

FN

Improve your recording by getting a digital camera and recorder. There is no point in having surveillance equipment that does NOT do the job. This would solve two issues one, you will have evidence of the dog, Secondly you will have usable video for what ever need you will have in the future.
Otherwise just bear with the dog until either dog or owner dies.
Pg

That's a tough one. It's certainly true that you've learned that you need to upgrade your video system.

But I'm not sure you simply wait for the dog (or owner) to die.

Here's the important element: Puddles on steps are dangerous. The dog's owner (evidently) does not inform the super when there is a dangerous puddle, and he/she clearly does not clean up after the dog.

Ask your lawyer what can be done. There has to be something in the proprietary lease about shareholders upholding safety -- clearly this person isn't doing so.

Steve

I had a similar problem. I requested my staff to pay a little bit more attention to people walking their dogs. I was able to narrow it down,to times dogs went out/in, pretty basic (as we have a large property and many dogs).

As our camera/recording system is pretty modern I was able to record the events quiet clearly.(Dog peeing all over the floor and the shareholder pretending nothing was happening) I did inform the shareholder (of course he blatantly denied it). Then I informed him that I had it on tape. Case closed.

You could always have someone monitor this persons comings and goings to narrow it down (and be sure). There is no substitute for a good camera/recording device. Try to find out what it would cost to rent one out for a while if you feel it is too expensive.

Best of luck Sherlock

FN

AS Fat Nickie noted, I'm also confused by whether "anon" on this message board is 1, 2 or more people. Can the "anon"s please use your initials or make up a nickname - New Guy, Coop-er, Board Lady, whatever? That would make it easier to know who's writing and who's responding. Thanks.

You're absolutely right! People should sign their opinions or their curt answers by doing initials or, as BP suggests, adopt a pen name.

Finally, I think "anonymous to anonymous" plays on the issue that you are trying to bring: why would a person identify him/herself to an anonymous posting, but through an anonymous reply.

AdC

postings like this. I formally nominate this one as well as adc's reply. totally frivilous.

I'm all for it! As we can see from the anonymous post responding here, another down-side of anonymity is the protection it gives to impolite discourse. If you always post with the same name (whether it's a pseudonym or not), you're more likely to behave as though you were raised with manners.

While nothing is a better deterrent then razor wire, (with the exception of electrified fence) we have used instead, motion detectors with alarms to our lobby in conjunction with one or two additional cameras. Signs posted stating surveillance and motion detectors seem to work. There is the occasional false alarm from birds or just wind but other then that it does work at least for us.
Cost is reasonable.

Pgrech is right about the alarm. It's a good option, but make sure you have a clause in the contract that covers the alarm's malfunctions. We used one but if often failed to work and getting a money back for the times it was broken was not easy.

Thank you, Pgrech for your helpful response.

Two years ago we refurbished our indoor double level parking decks. Before groups of residents were dislocated, we worked with the township and obtained parking in the municipal lot (we paid for spaces) and we arranged for a local taxi service between the municipal lot and the building (24x7) via a telephone call.

Alternatively, folks could elect to park on the street.

Either way, there was no diminution of monthly recurring parking fees.

I always found it best when taking over a building to make three lists. One Prioritized, one based on cost and the other by simplicity.
Then I begin to knock the simple ones while working on those that are Priority yet with in budget.
When faced with multiple issues, multitasking is important and delegation allows more to get done. Always keeping in mind that Resident Safety, Health and security are TOP issues.

Pgrech

The new board took over and is already discouraged???

Well, it's all a problem of breathing in-out technique and understanding that the computer was not invented by Adam and Eve or Second World War did not start nor won in one day. IN other words, there are many things to accomplish but a few that we can humanly and financially accomplish in one year.

The problem is vision, will or tenacity and making sure you stay on course. As PGretch stated, prioritize is the #1 lesson; divide an conquer is the second lesson. So, once you prioritize according to financial returns and safety to the co-op, you must understand what are the financial resources the required to do #1, #2, #3 priority, etc. Then proceed according to financial resources, safety concerns and shift priorities if necessary.

Once you do this, state your goals for the year as a board so you know what you are to accomplish (divide and conquer). Don't try to be overly ambitious. Being modest about your goals according to your maintenance and reserves makes the task easier. Every year as you complete or achieve the goals BLOW the trumpet loud and clear to shareholders; they will become awayre that you have done something positive and at least, you pad yourself in the back -- no one will do it for you!

Finally, don't dwell in the past. Look forward and don't try to find justification by digging the past. The past is only good to know payment history so that you don't pay double; to know what was done that may not need to be done again. The past only drags your progress. Turn over the page and think of what you need to accomplish. Otherwise, it becomes a justification for not doing anything positive.

AdC

Establish a long term objective (ten to twenty-five years) with a plan to meet the objectives.

1. For instance, one objective could be never to reenter the debt market.
2. Another objective is to eliminate all long term debt ten in twenty years.
3. Still another is to fund capital reserves and capital projects via assessments each year.
4. Eliminate any outstanding receivables greater than thirty days to less than 1% of monthly income.
5. Ensure that all contracts are put out to bid and assessed by competent outside consultants.
6. Reduce dependency on single suppliers


The plan can be:
1. Obtain an engineering assessment of the infrastructure within four months as required by AICPA rules.
2. Obtain a line of credit to be used only for “capital improvements” until the assessment income is available, to then be repaid each year without fail.
3. Increase monthly maintenance each year between 3% to 5.5%.
4. Establish a program to require capital assessment each year equivalent to one time or one and one-half times the gross monthly maintenance; to be collected over a six to nine month period such that funds are isolated from maintenance for IRS purposes.
5. Establish committees with friends of the “board” and with one or two board members on the committee for key areas: capital projects, maintenance of hallways and lobby; maintenance of heating and cooling plant; etc.
6. Establish a rigorous program with attorney to require payment of receivables.
7. Employ “industry experts” to assist in creating and evaluating “bid packages” as part of standard program for all major contracts bid.
8. Require that all purchases be made from multiple suppliers (round-robin) so that dependency is eliminated and maybe, not nice to say, collusion.

Use a few simple rules such as above to be the guiding light. Too many and it will be difficult.

Yes, it can be done. See my posting a few questions down.
http://disc.server.com/discussion.cgi?disc=94379;article=8107;title=Habitat%27s%20Board%20Talk

Jeff - PGrech's advice on dealing with issues is sound - make 3 lists by priority-cost-simplicity.

If, as you say, your issues are so overwhelming, this may help: Sort them first by "subject" - financial, building, staff, owner problems, rules/policies, legal, etc. Each board member could work on a few subjects and sort them by priority-cost-simplicity (the 3 lists), then the full board can tackle all issues on each list. Delegating does get things done more effectively and quickly, assuming people given certain tasks don't slack off.

When you have many issues and each one keeps unearthing even more problems, you have to say "Wait a minute. We have to get organized before we can accomplish anything."

If the board is overwhelmed, which can happen to a new board, perhaps getting a consultant of sorts may help to give you an detached opinion and help guide you. Having both new management, and a new super, with a new board is tough going at first. Not sure if new managing agent is detached enough for that.

It is an option the board may concider.
Pgrech

Read the "Bible" of the co-op, i.e., your by-laws to determine who attends, who gets elected and, if still the "bible" is in doubt, ask your co-op counsel. Also, how does your proxy read to know what powers it confers. Perhaps it is an issue of speaking with your counsel and have him/her review/prepare your proxy. I cannot see how in the WORLD co-op boards as so fullish not to have your counsel revew the proxy so that you get "NO SURPRISES."

AdC

need a striaght informative answer. thank you - we do know people can come bearing signed proxies - the questions is - can they be rent regulated tenants - can they be anyone?

It is my understanding that ANYONE may attend an Annual Meeting if they hold a signed proxy, and may vote that proxy however they wish.

Ask your co-op attorney to get a straight answer.

Big Al: Unless coop governing documents say otherwise, a person doesn't have to be a shareholder to be appointed as a proxy. But he must attend the annual meeting if any issue including board elections will be voted on, otherwise those shares cannot be included in any tally. The exception is if a proxy form lets a shareholder cast a vote for specific board candidates - or states issues to be voted on and lets a shareholder check off a "yes" or "no" vote for them. As far as I know, anyone who's a proxy can ask questions at an annual meeting. Check this with your attorney. My board's always felt that rental/sublet tenants or anyone else in the bldg who isn't a shareholder shouldn't be allowed to be a proxy because they shouldn't be privy to all the coop's business. A debate.

I will come back later on the topic, but just one thing that caught my eye...

"if I want to be an enlightened shareholder...and possibly serve on the board in the future."

Even if you need a flashlight to become enlightened, there should be no excuses for not taking the interest and serving on the board. There are many areas that a board oversees and needs to take decisions that require plain common sense. Similarly, not all board members have to be lawyers, accountants or engineers so that talents may be shared. What a board member needs is above all common sense, fairness, desire to participate, learn and work for the good of the community, honesty and an open mind as well as willing to leave the nonsense out.

So, don't let you or others deter what you think will be to your benefit as well as others. If you started to inquire about the figures and what they mean, you are in the right path. Attend the annual meeting and ask the accountant if pressent to provide more information on those items that catches your fancy on the report. Remember, there are no stupid questions, but stupid answers.
AdC

What to do when asking accountant for explanation of a particular item on the financials & you are given an answer or non answer & brushed off.

I assume you're asking the co-op's accountant and that you're not on the board. (If you're on the board and he/she won't answer, get a different accountant.)

The accountant may feel that he/she doesn't have to answer a shareholder's specific question because he/she cannot bill for that time.

I would ask the board treasurer, and if the treasurer doesn't know the answer off the top of his/her head, ask for an answer by the end of the week (or something like that).

If you still have no response, ask the treasurer again. If you haven't heard back, ask the board pres. If you still have no answer ... you have a recalcitrant board. Ask the question at the annual meeting, and, better yet, get a few other shareholders to repeat the question after you if you get a brush-off.

I'm curious to see what others suggest.

Steve

You may ask the independent board accountant any question regarding the audited annual report. After all, the accountant certified, based on management records, the accuracy of the report as far as how it was prepared.

The accountant may not know day to day information because the independent accountant is acting in a capacity of independent auditor, i.e., it takes the figures from the management's accountant and spot checks expenses and receipts to ensure that consistent accounting practices have been observed. A co-op may engage the auditor to do more frequent audting on records, i.e., quarterly, semi-annually, etc. to ensure that management practices are followed consistently and also ensure better knowledge o the records. IN the process, the independent accountant may be more careful with the way capital reserves have been spent.

If you were to ask questions to the accountant, you may first ask a friend who knows about accounting to review it for you and provide you with some insight. The person may provide you with some relevant questions that you should ask at the meeting.

AdC

Tell them that was not an adequate answer and ask again. And keep asking until you get a more satisfactory answer. Do not allow anyone to brush you off. Especially when it comes to your money

Put questions in writing to which were not answered & after sending numerous letters & a mandate from the board, was eventually answered with same answer given previously & no supporting documentation which would have actually answered the questions. It was also documented to accountant approximatly $70,000 missing according to the managment report for checks paid which were actually not & for money placed into a "phantom" account which has disappeared as shown in the management report. $$ have been missing for over a year & to date no response or comment from accountant. Board is apathetic with the exception of a few who are in an uproar over missing $$. I am banging my head against a wall!

As AdC says, one thing board members need is common sense. The same goes for shareholders who look at a financial statement to determine a coop's financial health.

Bill Gates once said, "A key to understanding how well the dollars and cents are spent is understanding the decisions and sense behind their outlay." Allan, compare figures for 2006 v. 2005. If a liability category was much higher in 2006, question it. Why were apt repairs $85K v. $25K? Question whatever jumps out at you. Check "Administrative Miscellaneous". It includes items like phones, messengers, printing/postage. Money may be spent unnecessarily on such items, or extraneous costs may be buried in there.

Check "Account Payables." Some unpaid bills carry into a new year, but if they were $180K v. $55K, ask why. It could be due to tax/insurance/fuel hikes. Or unexpected costs in a specific year for, say, legal fees. It could signal that funds aren't being managed well or the coop isn't taking in enough money to cover its regular expenses.

There's a lot to consider in determining a coop's financial health, but common sense should alert you to what seems right or not, whether you're a board member or not. Another quote from Bill Gates: "I'm not as concerned with the facts and figures as I am about the facts behind the figures."

Both BP and AdC are absolutely correct in both their points.

Let me add a couple of things to look at on your financial statement.

Under "Assets," check to see how high the "Cash & Cash Equivalents" is. That's the money in the bank -- savings. It's the money that pays the everyday bills, and it's the money held back for a pipe break, facade work, or boiler breakdown. That is, major expenses. The bigger the amount, the less likely shareholders will have to face an assessment.

(So how big is big enough? Our accountant says a rule of thumb -- and it's just that, not a rule -- is to have reserves equal to three months' maintenance. If you don't have that figure, and if you want to know how to find it based on your financial statement, respond to this post and I'll walk you through it.)

Second, under "Liabilities and Shareholders' Equity," look at the Income category. This will show how much money comes from sources other than the maintenance fee. There are probably several categories.

You may see an assessment or a surcharge, for example. Those are typically added to maintenance fees, which you will pay (unless those charges have ended; ask your lawyer or a neighbor).

Of all the other income categories: Add them together. Are they together more than 25% of the maintenance income (called "carrying charges")? If so, that's a good sign that the building makes money in ways other than charging shareholders. Typical categories are rental income from retail space and the fee from having cell phone attenae on the roof.

Then, below all the expenses, look at "Excess after depreciation and amortization." You want that number to be positive, because it's the co-op's profit (in very general terms). That's money that goes in the bank to save for a rainy day -- for emergencies, capital improvements, or a remodeled lobby.

Finally, read the supporting notes. Accountants say that these are the most important parts of the financial statement. The notes will tell you what's going on financially, what the big purchases were, the size of the mortgage, whether the co-op has other loans or a line of credit, how many apartments are still owned by the sponsor (if any), and any significant event that happened in the new year by the date of the accountant's letter (the cover letter).

For example, an accountant told me that in one of his client buildings, he had to include mention of a fire that happened in, say, January 2005, even though the financial statement was only for 2004 and 2003. That's because repairs to a fire would have a financial impact on the building.

Good luck!

I've just come across another source of good questions for the novice to ask about financials. It's in the April 8 Times real estate section, a whole article about questions to ask before buying (one section section is about the financials).

It has to do with comparing certain categories year to year (if your statement shows two years: the current and last year's numbers).

If you can't find it on-line, a library can for you.