Page 5 - The NY Cooperator August 2019

QUESTIONS & ANSWERS Legal Q A& Can Bike Fees Be Imposed on Existing Owners? Q My family have stored our bikes in our co-op basement for years at no charge. Now the board and man- agement have decided to impose a large fee for each bike, including for existing owners. We asked the board to tell us on what cita- tion/regulation the decision was based. Here is how they responded: “If a board votes to implement fees whether for bikes, storage, fi nes, etc., they can choose to do so. However, current residents or owners would not be exempt from paying. When fees are implemented, they are done so across the board to all, no one is grand- fathered in when it comes to pay fees that produces additional income for the building. Th e board can implement fees even on those who did not pay for bike storage before.” Th e governing docs do not have to be changed for this purpose. As per Proprietary Lease item 3 states: “Th e covenants by the Lessor herein con- tained are subject, however, to the discretion- ary power of the Directors to determine from time to time what services and what atten- dants shall be proper and and the manner of maintaining and operating the building, and also what existing services shall be increased, reduced, changed, modifi ed or terminated.” Is this legal? What should we do? —Two-Wheels Stuck A According to attorney Aaron Shmulewitz of the New York fi rm Belkin Burden Wenig & Goldman, LLP: “Th e authority of a board to act is governed by the provisions of its pro- prietary lease and house rules, which should be reviewed carefully in each particular case. Typically, a proprietary lease does aff ord a board the authority to off er, and regulate the use of, storage space in the building, includ- ing for bicycles. Th e authority to regulate such use includes the authority to change hours and means of access, and to impose and increase storage fees—and even to termi- nate the availability of such storage—to the extent that the board deems such decisions to be in the best interests of the cooperative and its shareholders. “To that extent, any such decision would be protected by the Business Judgment Rule, and would be immune from successful judi- cial challenge by a disgruntled shareholder. Shareholders would be bound by any such decision, including the imposition of storage fees for the fi rst time. If a shareholder does not wish to pay such fees, they can either ter- minate the storage arrangement, or the board will do so for non-payment. Th us, if this co-op’s proprietary lease is typical, it would appear that this board acted appropriately, and the shareholder would be bound by the board’s decision.” Leasing a Commercial Space to a Board Member Q I am a shareholder in a co-op in Brooklyn. It has come to my atten- tion that the board of the building has plans to develop some commercial space in our building and rent it to another board member. Management has distributed let- ters to notify other shareholders who may be interested in the space to come forward. It seems to be an attempt to say that everyone had an opportunity to lease the space, but further details were not given in the notice. Is this a confl ict of interest? Th e board also calls shareholder meet- ings whenever they see fi t during the year – continued on page 17 ROSENWACH TANK THE FIRST NAME IN QUALITY CEDAR WOOD TANKS WE ARE CERTIFIED and IT MATTERS! 718.729.4900 43-02 Ditmars Boulevard, 2nd Fl., Astoria, NY 11105 www.rosenwachgroup.com Rosenwach is proud to announce that Rosenwach’s tanks are certified to NSF/ANSI 61 by NSF International, a leading global independent public health and safety organization. NSF/ANSI 61 addresses crucial aspects of drinking water system components such as whether contaminants that leach or migrate from the product/material into the drinking water are below acceptable levels in finished waters. To receive certification, Rosenwach Tank submitted product samples to NSF that underwent rigorous testing to recognized standards, and agreed to manufacturing facility audits and periodic retesting to verify continued conformance to the standards. The NSF mark is our customers’ assurance that our prod- uct has been tested by one of the most respected indepen- dent certification organizations. Only products bearing the NSF mark are certified. COOPERATOR.COM THE COOPERATOR —AUGUST 2019 5