Q: I’m on the board of a 10-unit co-op brownstone in Harlem. We wish to preserve the upkeep charges low, and we rely on each shareholder to pay in a well timed method. I’ve lived right here for 11 years, and there’s one shareholder who by no means pays on time. We have now to chase him right down to remind him. He’s a pleasant man, however he’s an grownup and he’s not wanting for cash. His habits is irritating to us, and unfair. We really feel we’ve exhausted the private strategy. Can we require him to arrange autopay? How can we legally compel him to pay?
A: In a smaller constructing like yours, one chronically late-paying shareholder can have a larger influence on the constructing’s funds.
“There should be some ramifications if he at all times pays late,” stated Michael J. Ciarlo, a companion who handles actual property disputes at Nadel & Ciarlo, P.C., in Manhattan.
Examine the co-op’s proprietary lease to see if it permits the constructing to impose late charges.
New York state actual property regulation presently permits co-ops to cost as much as 8 p.c of the month-to-month upkeep price as a late payment, if the lease permits for it, although there are exemptions for revenue restricted co-ops. (Usually, a co-op can’t impose phrases like autopay on a shareholder if the lease doesn’t authorize it.)
In case your proprietary lease doesn’t tackle late charges, the board can begin the method of amending it, which might require approval by some portion of the shareholders. A brand new provision ought to state that late charges may be thought of further lease within the lease, which might permit the board to hunt possession of the unit in housing court docket, Mr. Ciarlo stated. It also needs to permit for the best payment quantity permitted by regulation, not particularly 8 p.c, in order that the board doesn’t should amend the supply every time the regulation modifications.
One other strategy can be to ship authorized demand letters each time the upkeep charges aren’t paid on time, tacking on authorized charges that the co-op pays to draft the letters, stated Steven D. Sladkus, a companion at Schwartz Sladkus Reich Greenberg Atlas LLP in Manhattan.
If that doesn’t get this shareholder’s consideration, the co-op might concern a discover for objectionable conduct and name a particular assembly to see if his continued tenancy is undesirable. This might end in a termination discover.
“I might contemplate a power nonpayer to be responsible of objectionable conduct,” Mr. Sladkus stated, although he warned that following by with termination could possibly be legally troublesome.
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