'); document.write('
'); } else { document.write(''); document.write(''); document.write('
'); }

Your Right To Know – Or Not

“It’s bad enough I come home every night to that pseudo-Starck joke of a lobby, but to think we paid over a million dollars for it.  I’m gonna demand to see every last contract,” my normally rationally-minded lawyer friend went on as if she were on speed.

“You can demand all you want, but you’re not going to get it.”

 “How can you say that?”

 “Just telling you like it is.”

Lots of owners in High Rise Society think that just because they pay the bills, they have an unqualified right to see what’s going on with their money.  Not really. Sure you have a right to an annual financial statement, which gives a snapshot of prior year-end, but won’t necessarily answer the questions you asked.

What else are you entitled to? In co-ops the proprietary lease usually allows you to inspect the books of account, sometimes more. And the law governing condos says unit owners can inspect receipts and expenditures.

Then there’s real life, which anyone living in High Rise Society knows sometimes makes its own laws. The thing is, in this context it’s not exactly clear what co-op boards have to show you, which gives them a certain amount of leeway to say yes or no.

So be nice – and reasonable — in your request. Don’t ask for the kitchen sink or you’ll probably get nothing.  And as a shareholder you have to say there’s a proper purpose for whatever it is you want to inspect. So if you’re a counterspy for another building or want the information to get revenge, the board can just say no, even though its members can see whatever they want, no matter the motive.

So just what can you see?  There’s no sure way of knowing because especially in co-ops the scope of what you can inspect varies among buildings and odds are no two boards would interpret your rights exactly the same way. Here are a few possibilities:

Want to see entries evidencing the payment for all the ugly lobby décor? Odds are you’ll get a yes.

Or proof that the building’s taxes were paid? Same answer.

But ask to see the contracts with all the decorators and suppliers for the lobby, or the documents for the roof project or the building’s management contract or its retainer agreements with professionals — and I suspect the answer will be no.

As for that deal you think a director made to acquire use of a portion of common space on the roof – forget it.

Just because the board doesn’t provide what you asked for, doesn’t mean you’re foreclosed from seeing it, but you may have to go to court to get it, which costs real money and effectively shuts out lots of shareholders.  But if you have the cash, a judge can do what the board would not, and direct it to turn over any books and records if you make a good enough case why you need to see the stuff.

Sometimes just filing a complaint does the trick. It got one board to change its mind and provide records regarding late tax payments it previously had refused, but not before the court chewed it out for being obstructionist, making it pay the shareholders’ attorneys’ fees for having to fight for what they had a right to see. Board members at another building played such games that the court made them turn over everything asked for — from contracts to bank statements, and lots more.  Plus they had to pay the co-op out of their own pockets for all the costs incurred by their refusal to turn over records. Another judge went so far as to order the board to turn over to shareholders seven years worth of books and records, even documents relating to the construction of a director’s greenhouse — so much stuff the poor owner probably regretted having asked.

  • Facebook
  • Twitter
  • Tumblr
  • Digg
  • Blogplay
  • del.icio.us
  • LinkedIn
  • StumbleUpon
  • Add to favorites
  • email

Pages: 1 2

Tags: ,

Leave a Reply