My co-op board approved funds to fix flood damage, but management won't pay up. What can I do?
Over the past several years, my upstairs neighbor's bathroom has leaked into mine. The building sent supers to do patch jobs, but recently, while I was away, the flood gates opened and my bathroom was destroyed. It needs a gut renovation, and the board approved $14,000 toward my expenses. However, the management company now refuses to pay. What do I do?
Typically, a co-op board advises the management company how to act, but when they're in conflict you may need an attorney to help you navigate, our experts say.
"In most instances, the management company acts as an agent for the cooperative and its board of directors. The management company’s authority is typically spelled out in their management contract," says James Woods, Esq., managing partner at Woods Lonergan. "Ultimately it is the board who can direct the management company to act, including the payment of funds on behalf of the cooperative."
Your best bet is to hire an attorney to act as a go-between.
"Do you have the offer to pay in writing? Was it written up in the board minutes? If you don’t know the answer to this, you probably need to hire an attorney to make sure that the decision by the board was done in a way that was binding," says Deanna Kory, a broker with Corcoran.
An attorney will help you determine whether the board's decision does in fact obligate the managing agent to pay you. Occasionally, Kory adds, decisions like these require a certain percentage of the board or shareholders to agree, depending on your building's bylaws.
If your lawyer finds that the payment offer is binding but management won't cooperate, you may need to take matters to the next level.
"You or an attorney on your behalf should seek to confirm the board’s approval of your reimbursement in writing and then approach the management company to resolve the issue," Woods says. "If this still does not resolve the issue, you may need to speak with an attorney and seek a court’s intervention to compel the payment."
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