A community is like a ship; everyone ought to be prepared to take the helm. – Ibsen, An Enemy of the People
Well in theory, yes, but in reality I was the only one at the helm of the Little Crooked House Tenants Corp. Joel and Blondy had returned to Florida, where they actually lived, popping up north occasionally for NYC culture and Board meetings. Two of my original co-op partner shareholders sold their apartments back to Joel and Blondy; one moved out, the other remained as a tenant.
Smart, edgy Blondy died of AIDs in the early ‘90s. Joel, who was positive but not sick, soldiered on, eventually introducing me to his new guy, the indecently gorgeous, much younger Joey Perhaps, who legally added “Duffle” to his name, as a way of marrying Joel and/or being adopted by him.
But by 1998, I’d had ten years of everybody calling me up at night and whining about some problem for which I wasn’t responsible, so I found an excellent building management firm, Rarus P. Griggsby Building Corp., to whom I turned over all the co-op files.
The last of my original co-op pals retreated at high speed into senility, sold his apartment to Joey Perhaps Duffle, moved out and died.
So that’s how I became the only minority shareholder and Board member resident. Joey and Joel owned the rest of the shares and related apartments, all of which they were now renting out for income.
Now I had complaints: the downstairs tenants, Eurotrash identical twins, smoked. Identically. The smoke floated into my apartment and from there into my lungs. I tried diplomacy. Didn’t work. I reported this to Joel and Joey. Their response? An offer to buy me out for enough money so that I could easily purchase an ample West Village coat closet. I graciously declined.
One day I ran into Educated Edmund, a real estate lawyer whose firm shared a floor with the law firm where I worked. I stopped him in the hall – he was heading for the men’s room – and asked his opinion about my situation. Ed paused thoughtfully and said, “You’re the only remaining shareholder in a co-op otherwise owned by the original sponsor?” Hm, yes, that was my situation.
Ed then informed me that my apartment was worth more than its market value, worth in fact anything someone would pay, since my presence blocked any sale of the building as a potential single-family townhouse. Because, “This is a case,” Ed said, “where the value of the whole building is much greater than the sum of its individual apartment parts.”
So if Joel put his six individual apartment shares on the market at that time he’d gross, say, $1,076,000 after lengthy, pricey, complicated negotiations with crabby, demanding, bi-polar individual buyers and their similarly psychologically impaired realtors.
Not bad. But if Joel owned and sold the entire townhouse, he’d gross a possible $1.7 million in one swoop.
Ed had taught me Co-op Law 101. Then he went to the men’s room.
- Managing a co-op is a pain in the ass. If you do it, get paid for it. I didn’t take any pay for the first five years; after that I kept careful time records and decided to take…$20 an hour. I wuz rooked! And I wuz my own rooker.
- If your co-op is small and wants to self-manage, agree in writing to rotate the management, i.e., every year another Board member has to take over the books and burdens.
- Pre-agree to a flat monthly fee for the manager. Some months you’ll spend 10 hours on the job, some months 2 hours. A reasonable fee might be $350. Or so I think. Our professional building manager, Rarus Griggsby, charged $500 a month in 1998.
- Chat with a co-op lawyer before you need one. In fact, a co-op lawyer should be pre-selected by the Board and invited to the first Board meeting as a consultant. So should the accountant. You’ll pay them a fee; they’re worth it.