CO-OP ACT

Русский Bариант

The Co-OP/ Condo Owners Unite Petition site is provided by CARE2, to find our petition please select and copy:
Co-OP/ Condo Owners Unite phrase and enter CARE2 site, look for: CO-OP Owners Act - The Petition Site on the left top in the search results(if not there paste to the search box, select CARE2, not WEB on the top and click Search).  Click on the above mentioned result on the left top and fill top and left boxes on the next screen. Only Name, City, State, EMAIL(or phone?) are important, put anything in the other boxes. For the valid entry you MUST copy/paste your email(or phone?) to the 1st line of the Comment box on the right!! If desired add comment on the next line and on...

 CO-OP ACT

(Proposal) 

 Currently, there are over 310,000 cooperative apartments. This amount shows tendency to grow. Among Russian speaking Americans, about 60,000 are the co-op shareholders. At the same time, larger and larger amount of the co-op shareholders in our community shows strong disappointment and dissatisfaction about this kind of investment. We tried to investigate what causes this dissatisfaction. Below, you can find our determination of that:

  1. Sponsors and Board of Directors do not provide (even frequently hide) full information about technical and financial situation with the building an corporation in full.
  2. Sponsors and members of the Board of Directors (frequently dealing together, in conjunction) use their abilities to gain more benefits even they officially not entitled for that.
  3. Ordinary shareholders have no rights and are voiceless in comparison with Sponsors (Owners of Unsold Shares) and members of the Board of Directors.
  4. Office of the State Attorney General used to ignore all complaints from the co-op shareholders taking site of the Sponsors without any hesitations. There are no examples when the office of NYS Attorney General initiated any kind of investigation against of any co-op Sponsor in favor of the shareholders.

  Coordination of co-op movement is governed by the NYS BCL (Business Corporation Law) which affects simultaneously all parties involved into this movement included profit and non-profit. In fact, these generalized rules do not regulate properly all situations in that co-op movement and benefit persons willing to break and omit the law and cheat to the ordinary shareholders. Moreover, absence of the particular NYS Co-op Law makes Sponsors and Board totally immunes from the shareholders and also makes shareholders hopeless and unprotected in front of Sponsors and their alleys. In fact, around 1 million New-Yorkers who bought their shares in co-operative buildings and reside here, became totally dependent on their Sponsors and Boards.

     Russian-American Coalition of New York makes a point that it is time now to implement  the particular law about cooperative buildings. We propose to include into this future law a number of statements (see attachment) to help developing the co-operative movement in NYS as well as to protect huge amount of ordinary shareholders of the existing co-op corporations. We the members of the Russian-American Community Coalition of New York ( RACCNY) are still ready, willing, and able to cooperate with the members of NYS Senate and Assembly in order to create and approve this particular NYS Law of the Co-operative Buildings Corporations.

  Below, please find our proposal to the perspective NYS Law of the Co-operative Buildings Corporations.

Attachments

  1. Each potential purchaser of any amount of  shares of a co-op building corporation has to be supplied with all documents mentioned below:

Bylaws

Complete set of all existing amendments( due to the bylaws, house rules, and proprietary lease)

Annual financial reports( full set of documents including income tax declarations for last 5 years)

Current mortgage(s) contract(s)-with all terms and conditions House Rules

List of existing violations and plan(with the estimated cost) of their removal for 5 years

Perspective plan for construction, re-construction, and other capital improvements  (descriptions and estimated cost)

List of maintenance raises and assessments done by the Board of Directors for last 5 years.

  1. Each corporation regardless of percentage of unsold shares, has to conduct general
  2. shareholders’ meeting at least once a year. Each shareholder has to be notified about a
  3. general or special meeting at least one month in advance.
  4. Copies of all (without any exceptions, exclusions, or exempts) financial documents of the
  5. co-op corporation has to be provided to any and each   shareholder not later than 7
  6. business days after receiving his/her written inquiry.
  7. If percentage of the shareholders of the given co-operative corporation who’s primary language is other than English is at least 35% out of total amount of shareholders, general shareholders’ meeting have to be conducted  with a translator present using language which is primary for the above shareholders.
  8. Copies of financial reports and income tax forms shall be supplied to all shareholders not later than 1 month prior to the date of general meeting.
  9. Final draft of the co-operative corporation annual budget shall be supplied to all shareholders not later than by 25 of December of the previous year.
  10. All money (no exceptions, exclusions, or exempts) obtained by the co-op corporation from any source or any occasion, must be deposited to one of the corporation’s banking accounts, and just after that could be spent for the building benefit.
  11. Total term for a member of a Board of Directors may not exceed 5 years. Re-election is available just after 2 years break.
  12. Members of the Board of Directors after breaking the co-op bylaws, have to be removed rom the board. The office of NYS Attorney General may initiate the lawsuit against this individual.
  13. Interviewing of the potential purchasers has to be conducted by the committee of at least 3 members of the Board of Directors. Majority of this committee has to contain ordinary tenants-shareholders.
  14. Interviewing and approval of prospective purchasers have to be discussed by the board  committee regardless of shares belonging (unsold shares or reselling).
  15. After 5 years of conversion or after selling at least 50% of shares (whatever comes first), the ordinary tenants-shareholders have to contain majority on the Board of Directors. Violation of this rule has to be qualified as civil crime and be prosecuted by the office on NYS Attorney General accordingly up to the court investigation.
  16. Count of votes and results of election approval must be made at the same day of election. There are no postpone allowed.
  17. First meeting of the newly elected Board of Directors has to be conducted at the same day immediately after the annual shareholders meeting, no postpone allowed.
  18. Election results and duties schedules assigned to each member of the Board of Directors have to sent to each shareholder in writing not later than 10 days after the annual shareholders’ meeting.
  19. Each shareholder has  right to personally inspect all(no exception, exclusion, or exempt) documents due to the annual shareholders’ meeting and the first meeting of the Board of Directors showing duties schedule for all board members.
  20. Owners of Unsold Shares( Sponsors) are obligated to sell at least 50% shares in 5 years after co-op conversion. Total selling of shares (100%) has to be completed in 15 years after conversion.
  21. After 5 years after conversion or selling at least 50% of shares (whatever comes first), the Owner of Unsold Shares/Sponsor misses control over the Board of Directors which  comes directly to the minority shareholders-tenants. The Owner/s of Unsold Shares/Sponsor is automatically missing an opportunity  to vote by the shares being unsold and still kept in his/her possession. 

Responsibility of the office of NYS Attorney General

1. The office of NYS Attorney General is directly responsible to control and prosecute all laws due to the co-op movement. One of the NYS Attorney General’s Deputies has to be appointed to be personally responsible for Investment Protection including co-operative movement and all violations in it. 

2. Office of NYS Attorney General has to create rules and schedule for the co-op shareholders to be able to speak face to face with the appropriate investigators, Assistants of NYS AG, Deputies of AG, and the NYS Attorney General personally if they disagree with the litigation process and willing to provide additional documents and other arguments to prove their point of view.

3. Office of NYS Attorney General has to conduct the time frame for the average investigation   process for the co-op complaints.

  1. Office of NYS Attorney General is responsible to inform in writing all complainers due to the co-op movement. First note has to be mailed to each co-op shareholder immediately (!) after receiving a complaint. Than, the investigator is obligated to inform a complainer in writing at least once a month.
  2. Office of NYS Attorney General may conduct meeting between opposing parties (minority shareholders and Sponsors) and to be the mediator in order to try to settle the case. Organizing this mediation does not obligate anybody and does not stop the litigation process if parties are not able or not willing to agree and to compromise.
  3. Attorneys may represent any parties in dealing with the office of NYS Attorney General. However, it is not mandatory. In addition, if an attorney represents the co-op corporation, the official minutes of the meeting of the Board of Directors have to be presented to all parties. These minutes have to prove that this particular attorney got retained by the   Board of Directors for this particular case, define his/her exact duties, rates, and asignments, as well as terms, and responsibilities. These minutes have also to prove that this personal retaining of an attorney is approved by majority of the Board of Directors. 
  4. If conflict between Owners of Unsold Shares (Sponsors) are not available for settlement by both parties, the office of NYS Attorney General is obligated to initiate additional steps in litigation including administrative commitments and warning. If this is not effective, the office of NYS Attorney General is obligated to initiate an official lawsuit.
  5. Office of NYS Attorney General has to deal with both parties involved in conflict (minor shareholders and owners of unsold shares/sponsors). This office is allowed to complete investigation if one of the parties disagrees with an investigator. If parties disagree with results of investigation, steps mentioned above have to apply such as mediation, personal meeting, attempts for settlements, and civil case as a last source.

 

 

 

 

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