Forum
« Chirstmas tree in Carroll Gardens Hot Bird »
November 30, 2007
Nonpaying Co-op Owner
We have a coop owner that has not been paying the maintenance due to financial troubles. What can the board do? Thanks.
Comments
How many months in arears?
Posted by: Ysabelle at November 30, 2007 1:38 PM
4 Months.
Posted by: guest at November 30, 2007 1:40 PM
You can repossess. The cooperative has the right - and the shareholder has to pay all legal (inc. coop's) bills. You should send a certified letter at 60 days -- give them 30 days to cure and then move to evict. We always ask people to come to the Board if they areh aving problems so we can work something out. but there are always a few who are either scammers or refuse to own up to their repsonsibilities. Talk to your coop lawyer -- and you (no matter how small a coop) should have one on retainer.
Posted by: guest at November 30, 2007 1:44 PM
That's really sad.
Posted by: guest at November 30, 2007 2:10 PM
We had this happen once in the coop building I lived in in Park Slope. The course outlined above is the way to go and you should waste no time in taking it. Based on our experience, you should also take measures to ensure that the tenants don't vandalize the place and steal the appliances on their departure. I would suggest taking pictures of the inside prior to serving notice and having the building super be present during the tenants' move-out process.
Posted by: johnife at November 30, 2007 2:13 PM
I would seriously try a non-confrontial way to try to find out the whole picture before you decide on any action.
If you are going to be aggressive in pursuing this, you might find yourself on the other side of the coin.
In other words he might file a bankruptcy in the middle of all the proceedings and all sorts of delays, etc.
You might open a huge can of expensive worms.
More than he owes the coop.
See if you can do a repayment schedule for the arears with a stipulation that guarantees monthly future payments in a timely fashion and save the coop reputation and money.
Also remind him this is a one shot deal only.
If he violates the stipulation you have strong legs to stand on.
No one wants to buy property in a building where people are always suing each other.
Make sure everything is written in the settlement contract.
It raises maintenance fees for everybody including you.
Violating a stipulation is a separate case
from the arears.
Bankruptcy does not play into it.
This is only a suggesstion.
Posted by: Ysabelle at November 30, 2007 2:16 PM
How many units are in the coop?
Posted by: chill225 at November 30, 2007 2:23 PM
Curious response from 2:13PM
You are decribing a rental scenario in a rs building.
The appliances belong to the coop owner not the building
The only way to take photos of the coop apartment in question is to get consent from the owner only.
If you are sneaky about it, there will be counter lawsuit and it will drain the board financialy from its objective.
The idea is to get the money .
This is not a pissing contest.
Posted by: Ysabelle at November 30, 2007 2:30 PM
Talk to a lawyer - and certainly don't put anything in writing to the defaulting tenant until you've done so.
As a co-op you own the primary lien against the property. If they're defaulting on their mortgage as well, you still get paid first whenever there's a sale. In other words, the worst case scenario is that you're lending the owner money, you're not actually losing it. Doesn't make it any easier but you wil get the money back one way or another.
Your lawyer will advise you on propoer next steps and how to communicate them. I'd strongly suggest doing everything by the book. Whatever payment schedule is agreed to is entirely your call, but starting legal proceedings after 4 months is being very reasonable on your part, especially if there's been no attempt at partial payment.
Protect yourself and the other shareholders. And good luck. Hope it all works out, for everyone.
Posted by: Johnny at November 30, 2007 2:51 PM
1:44 again. If he has a bank loan for the coop, once you file, the bank is notified and will pay the arrears (never known one not to -- they protect their investments). If he files for bankruptcy (and we have had a lawyer do it twice -- could have been disbarred for what the did), still doens't hurt you. You have the first lein so you get paid before the bank. And if it is sold at foreclosure, buyer must still meet all coop requirements.
Posted by: guest at November 30, 2007 2:51 PM
Ysabelle,
What the hell do you know about the situation I described? I lived in the building and was board president at the time. We tried the "give them more time" approach and all it did was generate empty promises and lose us more money. When the tenants departed we found much of the drywall destroyed, bathroom fixtures smashed, etc., etc. It was like they had spent their last days there in a frenzy of sledgehammer wielding. I'm just suggesting that the OP learn from our mistake in not making at least an attempt to forestall what turned out to be five-figures in damage costs
Posted by: johnife at November 30, 2007 2:55 PM
Once again, Ysabelle, shut it.
Posted by: guest at November 30, 2007 3:05 PM
response to 2:55Pm
You allege you were a board president of your coop board.
Who voted for you?
Your sistuh.
Posted by: Ysabelle at November 30, 2007 3:31 PM
first, arrange a meeting between the shareholder and the co-op lawyer (or the shareholder's lawyer). I'd do it through that channel first. I'm guessing that the shareholder figures they can skate on the monthly vs. other bills that may be due. I'm also guessing that unless they bought in the last 2 years there will be a substantial profit if they sell, enough to pay off any liens (if you go that route).
Sounds like a tough situation, but hopefully you can work out at least a partial payment schedule.
If you do come to a resolution, please post it here.
Posted by: guest at November 30, 2007 5:16 PM
how much equity does the unit owner have?
Thank you.
Posted by: Ysabelle at November 30, 2007 7:05 PM
Ysabelle, not all of us can pay our co-op dues in "pussy"...that's kind of a special agreement between you and your board.
Posted by: guest at December 3, 2007 11:14 PM
Post a comment
Please be patient while your comment is published. It may take a moment.