Q&A: Missing Maintenance
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The lobbies are dirty, fire extinguishers expired, light fixtures missing covers, broken windows, etc.…and nothing is being done. Do shareholders have any recourse?
Is there anyplace online where I can find a ‘boilerplate’ example of co-op rules and regulations in New York City?
—Concerned Co-op Shareholder
A “Shareholders have several avenues to pursue in these circumstances,” according to Thomas D. Kearns, a partner with Olshan Grundman Frome Rosenzweig & Wolosky LLP, a law firm in New York City. “The typical cooperative’s organizational documents provide for the right of a group of shareholders to call a special meeting. Typically 20 or 25 percent of the shareholders need to sign a petition or proxy in order to force a special shareholder’s meeting. In addition, shareholders have a right to inspect the books and records of the corporation under statutory and common law. Included in the books and records available for inspection are minutes of shareholder’s meetings, a list of owners and certain accounting records.
“In addition, at the next annual meeting, shareholders who are unhappy with the existing board may propose a new slate of directors and solicit proxies to oust the current board.
“However, there may be many reasons why improvements to the building may not yet be obvious. The prior board may have deferred maintenance or there may be litigation. In addition, some improvements may be happening behind the scenes (boilers, roofs, etc.). The most troubling aspect, though, is the seeming lack of attention to health and safety reflected in the failure to maintain the fire extinguishers.
“If you proceed to hire counsel, make sure you don’t hire a lawyer with a large practice representing co-ops. They may be reluctant to aggressively pursue your matter since it may be a precedent which will hurt their biggest clients.”
