This new co-op law couldn't hurt

To the editor:

(re: “Albany still not listening to landlord/tenant concerns,” Dec. 5)

Stephen Budihas’ urging co-op shareholders to fight for co-op exemptions from the Housing Stability and Tenant Protection law appears to be based on the assumption that individual co-op shareholders’ interests align with the interests of their co-ops.

The concept that is in the best interest of co-op shareholders that their co-ops be financially viable, however, only goes so far. That the financial strength of a co-op is largely determined by how much money it can collect from its shareholders and how little it can spend on maintenance to benefit shareholders creates an inherent conflict of interest between the co-op and its shareholders that renders their relationship more akin to that of a landlord-tenant relationship than that of a traditional corporation-shareholder relationship.

And as do landlords, co-op building managers have the upper hand in that they are empowered to evict and generally have more resources to litigate.

So if there is a new law that provides some protections for tenants, why shouldn’t the same protection be accorded to co-op shareholders?

In any event, I fail to see how the specific provisions in the new law objected to by Mr. Budihas will be bank-breakers for co-ops.

Is it really such a big deal that co-ops, as mentioned by Mr. Budihas, can no longer require a deposit exceeding one month’s maintenance, must give notice by certified mail if the shareholder fails to pay maintenance within five days of the due date, must use a process server to request payment after a five-day notice, and are now required to give a written receipt for maintenance payments in any form other than check?

Should the added paperwork that applies only to the small minority of shareholders who are certified deadbeats be that costly? Yes, it might cost co-ops some money if they can no longer charge interest in top of the late fees that they already charge for missed maintenance payments, as mentioned by Mr. Budihas.

But given that co-ops may charge the lesser of $50 or 5 percent per month, which effectively translates into a 60 percent (per annum) interest rate for a shareholder paying $1,000 maintenance or less, do co-ops really need the additional interest fees?

Mr. Budihas is probably correct, in general, that the new law “in no way will improve, protect or stabilize” the living conditions of shareholders. But to the extent that the law recognizes the reality that co-op shareholders are essentially tenants with equity and mortgage bills, it can’t hurt.

Zachary Berman

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