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Author Topic: RE advice needed!  (Read 5358 times)

guitarzan

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RE advice needed!
« on: January 22, 2008, 02:08:17 PM »
We want to sell out 2 bedroom, as my wife is pregnant with twins. We found out the last sale in our apartment building fell through because the board didnt' have the financials ready. They are very lax, and my questioning about it doesn't seem to incite any action.  They could care less, it seems. They claim to not have access to the materials to finish 2005 and 2006 (goodness, maybe even 2004!) because the mgmt company they last fired wouldn't hand over the necessary info.

So how should we proceed? Should we consult a lawyer now?  Is there anythign we can do to protect ourselves?

Thanks!
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Offline Dawnie

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Re: RE advice needed!
« Reply #1 on: January 22, 2008, 06:07:18 PM »


Sure contact a Lawyer.  If you want to sell your apartment assuming it is a co-op you will need an Attorney either way.  Let your Attorney find out the financials you need so you don't need to be stressed out.  You pay them for a reason, they will definatley be able to help you.

Good Luck!!!   ;)
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Offline Chuckster

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Re: RE advice needed!
« Reply #2 on: January 22, 2008, 07:01:04 PM »
From your description of the circumstances, it seems clear that the Board of Directors in your co-op may be not be operating in compliance with the New York State Business Corporation Law.  This is the law that governs how co-ops operate.  One of its provisions specifically outlines that as a shareholder, you have the right to inspect the books, records, minutes, etc. of the corporation.  Refer to your proprietary lease and by-laws for information pertaining to your particular co-op.  Personally, I would address this issue via a written request for the documentation.  Carefully read the governing documents of your co-op, and cite passages in your letter to the Board that state your rights to information as a shareholder.  If the Board does not respond to that, then I would strongly consider an attorney.
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Offline Chuckster

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Re: RE advice needed!
« Reply #3 on: January 22, 2008, 07:36:42 PM »
guitarzan, another option I forgot to mention in my previous post is that you can try contacting the accounting firm that prepared the financials for your co-op.  They should have copies available.
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guitarzan

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Re: RE advice needed!
« Reply #4 on: January 22, 2008, 07:50:47 PM »
hey, thanks all.

Chuckster, my understanding is that the financials weren't released because they weren't completed. The claim is that the mgmt company that was fired is 'holding the relevant paperwork hostage.'  I call bs, though, as why wouldn't the board have their own copies of everything?
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Offline lex

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Re: RE advice needed!
« Reply #5 on: January 22, 2008, 08:43:44 PM »
just adding my .02 here, I would recommend that if you go with a lawyer, or I should say when, make sure he or she has a lot of experience dealing with co-ops and better yet in the area.  My last lawyer was  a great guy but he only really knew about houses. Good luck.
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Offline Shelby2

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Re: RE advice needed!
« Reply #6 on: January 22, 2008, 08:58:22 PM »
When was the last sale in your building that did go through?
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Offline Chuckster

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Re: RE advice needed!
« Reply #7 on: January 22, 2008, 09:46:08 PM »
Quote from: guitarzan on January 22, 2008, 07:50:47 PM
hey, thanks all.

Chuckster, my understanding is that the financials weren't released because they weren't completed. The claim is that the mgmt company that was fired is 'holding the relevant paperwork hostage.'  I call bs, though, as why wouldn't the board have their own copies of everything?

The contract for an audit is between the corporation and the outside auditor.  Management is responsible for turning over the financial records of the corporation to be audited.  This is pursuant to the Letter of Engagement that is issued by the auditing firm and must be signed by the board or its representative.  The auditors are responsible for ensuring that the board of directors or management are aware of any reportable conditions which come to their attention after receiving the signed Letter of Engagement and performing their audit.  If for any reason, the auditors are unable to complete their audit or issue an opinion as a result of their audit, the auditors have to inform the board of directors of their actions.  If management is holding the financial records hostage, the corporation should seek legal action against management to release this information.  If the auditors did complete their audit and issued an opinion on the financial records, you have the right to request a copy from the auditors.  If the financials weren't released, then you have to question why.  It would be difficult to see someone buying a co-op without viewing financial statements.  Keep in mind that it is customary in the by-laws of a corporation that financial statements must be prepared and released to shareholders within a required time.  Anything to the contrary is questionable.
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Offline buddy

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Re: RE advice needed!
« Reply #8 on: February 12, 2008, 08:31:22 PM »
Okay, I seem to have become compulsive with this blog.  After living here 20 years and being my Co-op President for the last 15 and having gone thru several building management companies, I would like to recommend:

Attorney:  Goldstein and Greenlaw: Abbey Goldstein 718-544-7701.  When I wanted to wrestle the building away from the Sponsor who was doing what too many of them were doing 20 years ago - using the shareholders money like it was their own piggy bank, Abbey got us into the Attorney General's office and helped us get the building out of the Sponsor's clutches.  He's an amazing attorney who is only on the side of the shareholder, never the sponsor.  Can't say enough good things about him.  he can help you with everything you're describing including putting a fire under your current Board of Directors and the old management company who has to turn over everything by law.

Steve Beer of Czarnowski and Beer is in Manhattan, writes for the Co-operator magazine etc.  He annoys me because he's such a stickler for dotting his "i"s and crossing his "t"s... but that's what you want in an accountant when it comes to buying, selling or running a co-op.

it pisses me off to hear your Board is so lax.  We bend over backwards to help our shareholders.  What a shame.
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Offline Gherm

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Re: RE advice needed!
« Reply #9 on: February 12, 2008, 09:19:09 PM »
Buddy - Glad to see someone with some board experience here. You're a welcome addition.
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