Issues of Coop Board Alternation Agreement (Renovation)

I am a shareholder of a coop building. It is my first property. During the renovation process, the coop board made couple decisions which are not compliant with the Alternation Agreement.

1. Excessive legal fees.
The coop board forwarded a bill of the legal services not listed in the Alternation Agreement: the bill of the attorney review of plans, drawings and specifications. They deducted the fee from the security deposit. The service is excessive and in the typical building practice, it is not attorney’s scope to review plans, drawings and specifications. (In the Alternation Agreement, it requests coop board, coop board designated architect/engineer to review the plans, drawings and specifications. I got an Alt II permit from an architect. The coop board doesn’t has a designated architect/engineer and has asked us to hire another licensed engineer to review the DOB approved drawings. We followed the coop request and hired a licensed engineer to review them. Then, there is an invoice form the coop attorney of review of plans, drawings and specifications.)
2. Withhold the money without expenses.
The boiler functions well and the Coop board withheld the security deposit for future malfunction. In the Alternation Agreement, it states expenses incurred by the Corporation will be deducted from the security deposit. Coop board cannot withhold the security deposit without expenses.

I don’t want pay beyond the Alternation Agreement. These decisions are not reasonable. I have talked to the coop board president who made above decisions, not willing to discuss them and ask me to talked to the coop board attorney. I don’t have any contractual relationship with the attorney. I think I need to discuss with the person, the coop president, who signed the Alternation Agreement with me. I plan to send a formal letter to the coop board and all the shareholders to address the disagreement and ask for a coop board meeting to discuss the issues. Is there any other steps I can do?

In my conversation with coop board, I realized that there are only two people on the board which is against the By-Laws (which requests at least three people on the board). Is it typical for a small self-managed coop?

ceo

in General Discussion 8 years and 10 months ago

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gabrielfaucher.2016 | 8 years and 10 months ago

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It’s hard to say that it’s typical since each co-op is different. It doesn’t seem like it’d hurt to speak to the attorney (even though you’ll prob get billed for the conversation). Your story sounds like the Co-op is not exactly on the up-and-up, but it’s hard to tell.

If you are really at an impasse, you have three options: negotiate to an agreement; pretend it doesn’t bother you, pay the fees, and move on; or litigate. Of course, co-ops have significant legal protections, so that’s a tough one to game theory out. You have to live with these people and they actually have to agree to let you move out (i.e. they presumably have the right to reject any prospective buyer).

If you’re doing even a modest renovation, this is likely the first (not the last) of many issues that are to come up. You have to decide if holding firm here gives you good or better standing for any of those future unknown issues that will arise.