Situation Assessment
We are a small 8 unit coop in Park Slope. I'm acting president of the co-op. We are a 1920's building in central Park Slope Brooklyn.
The sponsor has 4 shares (2 of those shares are classed as "unsold" rent-stabilized non-eviction apartments), 1 is rented out at full market rate). He recently was able to take over one of the apartments, which he has renovated and now wishes to rent it out at full rate. In short, we need to push him into a sale of this apartment to rebalance that controlling shares back to the coop. He has a 50.5% controlling interest even though the coop was established in 1985. That's 35 years ago.
To the best of my knowledge, sponsors were meant to relinquish ownership and control when converting buildings to co-op. He bought the building in 1984 I believe.
#1 In the 15 years of us living in this coop, we have zero access to banking information, at best, we were able to gain access to a one-page summary of the yearly status of the accounts. After much continued pressuring we gave up doing this on a yearly basis.
#2 The sponsor has an underlying mortgage that the coop pays him, we think, 8-9% interest on the underlying mortgage the building owes him. This was set 35 years ago and has the last agreement elapsed without any recourse or action from him to renew it. I told him at the time we would like us to move to a better-reduced rate, ideally a no-interest loan, or a bank loan at a better rate.
#3 We entered into an income-generating scheme with the sponsor, to provide ventilation for a commercial restaurant on his adjacent building. This was $12,000 per year income. However, part of the agreement was the stipulation that we install a proper chimney for our central boiler, which was a critical aspect of agreeing to this agreement. He failed to get our building needed exhaust vent to be connected and we are without sufficient ventilation which is a building violation and health hazard for the apartments on the ground floor.
#4 The coop has essentially 5 families (including the sponsor). The four independent co-op owners all agree this sponsor is behaving badly. But we are stuck without resources and recourse to alter his behavior.
5 This sponsor is a practicing lawyer in NY City (Real Estate).
ACTION/
- We would like to gain a clear-sighted view towards resolving, ideally without court action, an agreement to reach a payoff of the remaining debt with him, approx. $60-100k.
- Allow the co-op to take self-management responsibility for the financial management and status of the Coop, and help us take on the repair and upkeep of the building, which is falling into disrepair.
