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co-op law & maintenance issues for persons on Temp Disabillity
- Thread starter chantre
- Start date
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You Are Guilty
Senior Member
Obviously, you already know the answer to this. The real question is why you think you should be exempt from paying your maintenance?What is the name of your state (only U.S. law)? New York
Do persons have any legal protection against eviction from an NYC co-op apartment if they fail to pay maintenance while on temporary disability from work?
I am not the person trying to avoid paying maintenance. I am a board member.
We have a shareholder who is chronically delinquent in paying and in breach of the proprietary lease, yet judges have historically ruled in favor of the shareholder. Currently, he is 3 months in arrears and he explains that he needs additional time to bring his account current because he is out of work, awaiting disability payments, and seeking "one time" aid monies from the state.
Over the past decade, the corporation has wasted tens of thousands of dollars in legal fees trying to correct issues generated by this individual. Common sense, legal counsel, and the proprietary lease would seem to indicate that the corporation should have prevailed however, this has not been the case.
Therefore, this most recent request has given the board pause. Has the shareholder found an arcane loophole in landlord tenant law (connected to his claim that he is now disabled) that will allow him to avoid his contractual obligation?
We have a shareholder who is chronically delinquent in paying and in breach of the proprietary lease, yet judges have historically ruled in favor of the shareholder. Currently, he is 3 months in arrears and he explains that he needs additional time to bring his account current because he is out of work, awaiting disability payments, and seeking "one time" aid monies from the state.
Over the past decade, the corporation has wasted tens of thousands of dollars in legal fees trying to correct issues generated by this individual. Common sense, legal counsel, and the proprietary lease would seem to indicate that the corporation should have prevailed however, this has not been the case.
Therefore, this most recent request has given the board pause. Has the shareholder found an arcane loophole in landlord tenant law (connected to his claim that he is now disabled) that will allow him to avoid his contractual obligation?
You Are Guilty
Senior Member
No, disability is not grounds (in any state) to avoid your debts. If I had to guess, you've likely just run aground on a bleeding heart judge who refuses to uphold the contractual requirements of the proprietary lease. (Sounds like you're stuck in Kings Housing Court where their motto is "no law is too big to be ignored").
Unfortunately, it also sounds like you've got yourself a professional deadbeat on your hands. If the past history is as egregious as you claim, the only viable way to end it is to start proceedings to cancel their shares. It will take some time (and $$$) so the Board will have to weigh the cost of letting someone live there, maintenance free, who routinely flouts the rules of the co-op versus the effort needed to get them out and stop all this nonsense.
Good luck, either way.
Unfortunately, it also sounds like you've got yourself a professional deadbeat on your hands. If the past history is as egregious as you claim, the only viable way to end it is to start proceedings to cancel their shares. It will take some time (and $$$) so the Board will have to weigh the cost of letting someone live there, maintenance free, who routinely flouts the rules of the co-op versus the effort needed to get them out and stop all this nonsense.
Good luck, either way.
You Are Guilty
Senior Member
If there is an outstanding mortgage on the unit, the Board can sent the default notice directly to the shareholder's bank. (In fact, the Board is likely required to under the Aztech agreement). Some banks are more inclined to pay the arrears themselves, then seek reimbursement directly from the shareholder. Obviously, this doesn't solve the bigger problem of having a jackass shareholder in the building, but it could be a relatively quick way to have the arrears paid up, while simultaneously causing trouble for the shareholder with their bank.
Run it past your/the Board's attorney and see what they think.
Run it past your/the Board's attorney and see what they think.
As you say, "Professional deadbeat."
When this person first surfaced as a problem tenant, he and his wife owned multiple units within the corproation. During the divorce, the corporation was forced to notify the lender of default and we were made whole at that time.
After the divorce, one of the units was awarded to the person in question and it does not have a mortgage. So, I guess we're going to have to face the judges once again and hope reason will prevail.
Again thank you. In a few sentences, you have given clearer and more succinct advice than thousands of dollars have bought for us.
When this person first surfaced as a problem tenant, he and his wife owned multiple units within the corproation. During the divorce, the corporation was forced to notify the lender of default and we were made whole at that time.
After the divorce, one of the units was awarded to the person in question and it does not have a mortgage. So, I guess we're going to have to face the judges once again and hope reason will prevail.
Again thank you. In a few sentences, you have given clearer and more succinct advice than thousands of dollars have bought for us.
You Are Guilty
Senior Member
Glad to be of service. Just keep in mind that your shareholder is likely relying on the fact that it co$t$ quite a bit of time and money to get them out and that most boards, particularly now with the bad economy, are unwilling to commit that many resources to a single problem shareholder.
This also should give the Board some motivation to reexamine the House Rules on fines and late fees. Granted, there are limits to how much can be charged, but perhaps "beefing them up" might make other shareholders think twice before using the corporation as their personal ATM.
Good luck.
This also should give the Board some motivation to reexamine the House Rules on fines and late fees. Granted, there are limits to how much can be charged, but perhaps "beefing them up" might make other shareholders think twice before using the corporation as their personal ATM.
Good luck.
Two months ago, the board began exploring the possibility of increasing the late penalties. I understand we have to consider usury restrictions etc.
I am certain that you are correct about the problem shareholder's assumptions that the corporation cannot afford the legal expenses related to addressing his behavior.
In addition to chronic late payments, he has advertised for "roommates" on a daily, weekly, and monthly basis. On occassion, he had as many as 5 foreign "roommates" for one or two weeks at a time - in a one bedroom apartment. In those cases, he was travelling out of state or country while the roommates occupied the apartment.
It was our attempts to curtail these activities that forced the corporation to cease collecting maintenance for almost 2 years while the eviction case was pending. The result - the judge awarded him the equivalent of almost 1 year's maintenance plus several thousand $$ in legals fees (not to mention the cost of the corporations legal counsel).
Such an astonishing outcome has made us very leary of taking any legal actions. Bit we are a relatively small co-op (30 units) in a very nice section of Manhattan and we cannot operate when at least one shareholder is failing to co-operate.
I am certain that you are correct about the problem shareholder's assumptions that the corporation cannot afford the legal expenses related to addressing his behavior.
In addition to chronic late payments, he has advertised for "roommates" on a daily, weekly, and monthly basis. On occassion, he had as many as 5 foreign "roommates" for one or two weeks at a time - in a one bedroom apartment. In those cases, he was travelling out of state or country while the roommates occupied the apartment.
It was our attempts to curtail these activities that forced the corporation to cease collecting maintenance for almost 2 years while the eviction case was pending. The result - the judge awarded him the equivalent of almost 1 year's maintenance plus several thousand $$ in legals fees (not to mention the cost of the corporations legal counsel).
Such an astonishing outcome has made us very leary of taking any legal actions. Bit we are a relatively small co-op (30 units) in a very nice section of Manhattan and we cannot operate when at least one shareholder is failing to co-operate.
You Are Guilty
Senior Member
Unfortunately, you have witnessed, first hand, the problem with NY judges who think that they are above the law. It's likely too late now, but there may be potential appellate remedies available (generally, the judges above the trial court level are more likely to do what the law requires, rather than what they personally feel is "the right thing to do"). I wouldn't blame your general counsel though - it sounds more like just the bad luck of the draw when your judge was assigned.
And another consideration, made stronger by the small size of your co-op, is the "broken window" theory. That is, now that there is one problem tenant who suffered no consequences of his actions, the probability of another tenant seeing that and concluding that they, too, are above the rules, goes up dramatically. This is often why you see extreme cases where a Board seeks to make an example of someone. Future shareholders tend to think twice when they believe the Board will come down on them like a ton of bricks!
All in all, being a Board member is a thankless task. Perhaps if you were able to illustrate the issues (financial and otherwise) that your deadbeat has caused the building to the other shareholders, you could drum up enough support for a shareholder vote (as opposed to Board vote) to get them out. Depending on your particular PL, you'd likely need a 66%-75% majority to do this, but the benefit is that as long as the voting was performed as per the lease's requirements, even a liberal Housing Court judge cannot overturn their decision (well, technically, they "could", but as a blatant abuse of their discretion, it would be a slam dunk appeal).
And another consideration, made stronger by the small size of your co-op, is the "broken window" theory. That is, now that there is one problem tenant who suffered no consequences of his actions, the probability of another tenant seeing that and concluding that they, too, are above the rules, goes up dramatically. This is often why you see extreme cases where a Board seeks to make an example of someone. Future shareholders tend to think twice when they believe the Board will come down on them like a ton of bricks!
All in all, being a Board member is a thankless task. Perhaps if you were able to illustrate the issues (financial and otherwise) that your deadbeat has caused the building to the other shareholders, you could drum up enough support for a shareholder vote (as opposed to Board vote) to get them out. Depending on your particular PL, you'd likely need a 66%-75% majority to do this, but the benefit is that as long as the voting was performed as per the lease's requirements, even a liberal Housing Court judge cannot overturn their decision (well, technically, they "could", but as a blatant abuse of their discretion, it would be a slam dunk appeal).
Our window is already "broken." At least one other shareholder has withheld many months maintenance for an issue that was already settled by his own and the corporation's insurnance company. Furthermore, a former board president frequently and publically announces the corp. cannot (and will not) persue legal remedies because of the financial burden.
You pique my curiosity when you suggest lobbying to have a shareholder vote to oust the problem tenant. The board has been advised to avoid revealing or discussing too many details with the shareholders at large. How does one go about mounting such a campaign?
I assume, by what you've already said, that, as when you attempt to make a change to the proprietary lease, you must circulate the proposal in writing and hold a vote that would require a super majority in order to pass. But what then? Conduct the vote, then move to evict, and use the resolution to bolster your case in LT court?
You pique my curiosity when you suggest lobbying to have a shareholder vote to oust the problem tenant. The board has been advised to avoid revealing or discussing too many details with the shareholders at large. How does one go about mounting such a campaign?
I assume, by what you've already said, that, as when you attempt to make a change to the proprietary lease, you must circulate the proposal in writing and hold a vote that would require a super majority in order to pass. But what then? Conduct the vote, then move to evict, and use the resolution to bolster your case in LT court?
You Are Guilty
Senior Member
The general rule is not to badmouth specific tenants to the other shareholders because 1) its usually a professional deadbeat who is getting badmouthed, which means 2) the likelihood of some sort of defamation/breach of contract suit goes up significantly. It does not mean that it can't be done though. As long as you stick to 100% factual statements (i.e. "Shareholder X has not paid his maintenance for the last 3 months. X has not paid his late fees for 3 months. When any shareholder does not pay their fees each month, it creates a financial burden on the cooperative to make up for that missing money" is probably OK. "That deadbeat in apartment 2A thinks he doesn't have to pay his maintenance and that all of you should have to make up for his shortfall. Now I think he's trying to scam us with some sort of phony disability claim" is probably going to get you in hot water.) For that reason, I generally advise recording the meeting(s), with notice to attendees.
As for the actual process, it is dictated entirely by the PL. Some call for non-judicial foreclosures while others may require a court order. Either way, it is much, much more difficult for a judge to ignore such a vote than it is for them to ignore months of missed maintenance.
As for the actual process, it is dictated entirely by the PL. Some call for non-judicial foreclosures while others may require a court order. Either way, it is much, much more difficult for a judge to ignore such a vote than it is for them to ignore months of missed maintenance.
You Are Guilty
Senior Member
Without knowing your building, I'd just be guessing. Why the reluctance to ask general counsel?