Helpful articles to aid Management Companies, Board Members, and Housing Cooperative Professionals in handling complex legal issues.
National Cooperative Law Center
National Cooperative Law Center
National Cooperative Law Center's Blog

When Does the Coop Step In?

Imagine a scenario when a member is having some challenges, which come with either age or declining mental conditions to the extent they may be a threat to themselves or the community. What does the Cooperative do? Do they have any obligation? What if the member’s family calls demanding you to take action such as turning off their water or their gas for fear the member might not remember to turn it off?


The Legal Aspects Pitfalls of Cooperative Refinancing

A large number of cooperatives are contemplating refinancing their existing mortgages. Several reasons exist for this. First, interest rates are at an uncommonly low level which makes it rather advantageous to take out a loan. While the existing mortgages are typically low, the rates now are extremely attractive and may not last much longer. Thus, there is a window open now to get great interest rates. Second, many cooperatives have experienced HUD being more burdensome in its demands than in the past. They seek to either eliminate or reduce HUD oversight by eliminating the mortgage which HUD insured or subsidized. A third and most common reason is the need to amass a sufficient sum of money to undertake repairs, renovations and enhancements of the property. Many cooperatives would prefer to complete these tasks in the near future to properly maintain the property rather than make improvements over an extended number of years.


Thinking of Refinancing?

A large number of Cooperative Boards are presently exploring the option of refinancing their existing mortgage. Whether motivated by a desire to get rid of HUD, to take advantage of relatively low interest rates, a soft market for construction, a need to improve the property, or any combination of these considerations, the Board must do a lot of homework. We have listed some vital questions that should be answered by the prospective lenders before a selection is made.


Update on Proxies

As previously reported, the Detroit office of HUD has issued a statement that the provision in many coop bylaws that restricts who may carry a proxy in the case of married couples is violative of the Elliot-Larsen Civil Rights Act. That much we agree with. However, HUD has suggested that Boards may correct this situation by adopting an amendment to the bylaws. That is patently incorrect. Here is what we suggest:


Understanding fair housing and the Americans with Disabilities Act (ADA)

Discussions about civil rights laws are almost commonplace now, and anti-discrimination concepts are familiar even to those who don’t completely understand how the laws work. For example, due to an increase in education and the prevalence of media coverage of high-profile lawsuits, most people realize that it is illegal to discriminate against someone in the workplace because of:


After the Mortgage is Paid Off Changes to the Governing Documents

When HUD is no longer involved, there are two schools of thought as to whether the governing documents should be amended. There is the “Do Nothing School.” The rationale given is that by operation of law, the obsolete references in the articles and bylaws are void; thus, it is unnecessary to amend them.


After the Mortgage Payoff Options for the Cooperative

Excitement is growing as cooperatives that were developed over three decades ago look ahead to the day when their original mortgages are finally paid off. Boards everywhere are asking that lies ahead, and how they should prepare. This article gives valuable guidance on how to look at the issue and to plan properly for the mortgage burning (and its corresponding HUD regulatory agreement termination) event.


Insurance Check-up

In these days of economic distress, insurance companies are facing the same plight as other sectors of business. Like financial institutions, many insurance firms have gone under, stranding their customers with enormous unfunded exposure. For this reason, it has become more important than ever to conduct a periodic review of the Co-op’s insurance policies.


Insurance Pitfalls

When purchasing insurance for single-family homes or apartment dwellings, consumers usually purchase very broad and inclusive policies that are relatively simple to shop for. Cooperative housing, in contrast, divides insurance risks among several individuals and entities through multiple insurance policies affording fairly specific coverages. Although the cooperative dweller likely has a fairly simple shopping experience, cooperative directors must consider coverages for the complex as a whole, individual dwellers and for the themselves in their capacities as directors, officers and employees.