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PRESIDENT’S MESSAGE
As president of THE FEDERATION OF NEW YORK HOUSING COOPERATIVES AND CONDOMINIUMS I want to thank all the co-op and condo buildings, Vendors and Professionals who have supported and are supporting our organization.
We are approaching our 57th Anniversary of continuous service to this community. There is no other organization in the New York area whose prime purpose is to keep Boards of Directors, Management Companies and shareholders informed of all new regulations.
Our motto for all these 57 years has always been
AN INFORMED BOARD IS AN EFFECTIVE BOARD.
We have seminars that are held periodically to keep our members in touch with the changing world. Attending the seminars gives the attendees the opportunity to network with other Boards, professionals and vendors with new ideas and items. A newsletter is published monthly. Our web site www.fnyhc.coop is updated on a daily basis. Events are listed and timely articles by our members are included. Questions from our shareholders (privacy assured) are answered by our Professional members. If requested, via e-mail, your questions would be answered individually.
Albert Pennisi, Esq.
COMMUNICATON BETWEEN MANAGEMENT COMPANIES AND BOARDS
By: DAVID BARON, METRO MANAGEMENT
Good communication between the Management Company and the Board has always been of paramount importance and key to a well run property. Just a few years ago communication between management and boards consisted of telephone calls between the manager and one or two lead board members and a monthly meeting of the Board. Technology has improved access to information so that today instant communication is not just possible but the norm. Emailing, text messaging and dial in conferencing have made it possible to communicate with all Board members simultaneously and more expeditiously. This is extremely important as board members can become informed of developments at a building before walking unaware into a situation.
In many coops the only meeting held between a Board and its owners is the annual meeting. Often held in small, acoustically poor surroundings, and with limited time, owners feel disenfranchised and not heard. Some boards will hold quarterly informational meetings where all owners are invited and can speak on issues affecting them. This policy of openness fosters inclusion among owners.
There are often valid reasons why coop board meetings are closed to non-board members,. Board’s make decisions that are not the business of the general population, and if discussed publicly could lead to rumor. Discussions often center on an individual shareholder, such as one in arrears or a decision regarding the acceptance or rejection of an applicant.
On a related topic is how minutes of monthly board meetings are handled. Are they filed, distributed (emailed) to all owners after being ratified or are they only available upon request and then only for viewing? Can attorneys representing applicants review Board minutes? These are discussions best left between a board and its attorney.
Boards meet their responsibility to communicate with shareholders by issuing a regular newsletter. A newsletter can be an invaluable tool for management and the board to communicate with shareholders, and can contain a lot of valuable information. .
As a Board President for the past 20 years, and a Principal of Metro Management, I have learned that an average board can become a Good board, and a good board can become a Great board through the powers of communication.
DAVID BARON, DIRECTOR OF MANAGEMENT
METRO MANAGEMENT
LONG ISLAND CITY, NY
NO MESSING AROUND WITH WORKER’S COMPENSATION COVERAGE
PATRICIA M. BATIH - Vice President of Sales
Workers Compensation Insurance was designed to provide cash benefits and/or medical care for workers who are injured or become ill as a direct result of their job. By agreeing to file a claim under a Workers Compensation policy the employee waives their right to sue their employer for negligence.
The cost of coverage is relatively inexpensive in comparison to the cost of not having coverage in place. New York State Workers Compensation Law has raised the penalty for non-compliance to $2,000 for each 10 day period you have a lapse in coverage. I have seen many cases where buildings are being fined $50 to $100,000 or more because somewhere along the line the WCC coverage lapsed. In such cases you can work with the Bureau of Compliance to have the penalty decreased, but you will usually end up still paying a hefty fine regardless.
The best way to avoid a penalty is to make sure that you always maintain coverage, plain and simple! If you have a super on payroll and/or receiving use of a unit in the building for his/her services you must maintain coverage. I also see cases where a super is part-time and is paid on a 1099. The NY State Workers Comp Board (WCB) confirmed that you are still responsible to maintain coverage regardless of how the super is paid or compensated.
I will leave you with this thought: Is the $500 to $700 annual premium for WCC worth the exposure to your building to be sued by the injured super? Is it worth the huge penalties from the WCB for non-compliance? Is it worth the cost of the super’s medical bills that you will be responsible for? It’s the least expensive and responsible way to protect against the “what if’s” in life.
NEW FIRE CODE
A new law goes into effect shortly, painting of Standpipe and Sprinkler Systems (Local Law 58 of 2009).
For existing buildings
- The law goes into effect March 2, 2010
- The painting has to be completed by June 2, 2010 for existing buildings
- The horizontal branch lines of Sprinkler Systems do not have to be painted
- All piping are painted red
- Attachments, gauges, valves and operable parts are not painted
- Valve Handles are painted red for Standpipe Systems
- Valve Handles are painted green for Sprinkler Systems
- Valve Handles are painted yellow for a combination Standpipe and Sprinkler Systems
No news on the banning of number 4 or 6 oil. In the New York State Budget for April 2010, the budget calls for enabling legislation for municipalities e.g. New York City, to enact a Mortgage Recording Tax for Cooperatives. For the last thirty years this issue of taxing cooperative Mortgages has been off and on. For thirty years we have successfully defeated this legislation from being enacted. This year due to large governmental deficits, it will be a hard push back. The state wants it so they can reduce what they give back to the city and the city sees this as a way to close its own budget gap. As always the Federation will keep you up to date when events concerning our members happen. Remember; start preparing now for a possible 32BJ strike when the contract expires on April 20, 2010.
SHAREHOLDERS ALERT!! PROPOSED RECORDING TAX ON CO-OP LOANS-A BURDEN ON COOP OWNERS
BY GEOFFREY MAZEL, ESQ.
Once again, New York State is attempting to close their budget gap by charging a new exorbitant tax on Coop Owners. On January 15, 2010, New York Governor Paterson's Proposed Draft Budget Bill, in an attempt to provide the City of New York and county governments with potential additional revenue, proposes to expand the Scope of the Mortgage Recording Tax to apply to Cooperatives. The Governor is proposing a bill which would expand the scope of the Mortgage Recording Tax, which is currently imposed on the recording of mortgages on real property with the county clerk, to include the filing of a financing statement securing a loan for the purchase of an ownership interest in a cooperative housing unit. The bill would subject the filing of a financing statement with the county clerk to a tax that is calculated, administered, collected and distributed according to the laws pertaining to the tax on mortgages under Article 11 of the Tax Law.
This Legislation will add a tremendous expense in the purchase of a Cooperative apartment. If passed a Coop Owners would have to pay an additional fee of 1.85% or 1.95% of the loan amount to New York State in the form of a recording tax. On a mortgage of $500,000 a Coop Owner will pay almost $10,000.00 in additional closings costs for this recording fee.
Essentially, this new proposed tax may have a significant negative impact on the Coop Market. Bank underwriters are already making it very difficult to lend to Coops in this area and by adding a significant cost to the closing is a major step in the wrong direction.
The Federation is working hard to make sure this regressive tax never sees the light of day. We have already met with State officials and expressed our opposition to adding a new significant tax on Coops in these challenging times.
Geoffrey Mazel, Esq. is a partner in the lawfirm of Hankin & Mazel, PLLC, 7 Penn Plaza, suite 904, NY, NY, 10001
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