Assembly Candidate Pledges To Reform Co-Op Oversight

Don’t be fooled into thinking the campaigns for the 45th Assembly District, currently occupied by Assemblyman Steven Cymbrowitz, are over. The September 13 primary that saw Cymbrowitz best Ben Akselrod was only the first round, and the incumbent now faces off against Republican Russ Gallo.

Gallo is ramping up his campaign and is now borrowing a play from Akselrod’s book, seizing on the mounting frustration of  some of the district’s co-op owners who find themselves swept up in divisive battles with their co-op boards’ alleged abuses. [UPDATED]

You might remember Akselrod joined Davidzon Radio for a town hall meeting in August, where co-op shareholders expressed their dissatisfaction and discussed the challenges they face. At some local co-op buildings, shareholders have even organized anti-board rallies in attempt to overthrow the board, and Sheepshead Bites frequently receives e-mails from residents complaining about abuses in maintenance fee hikes, blocking shareholder sales and more.

Gallo is echoing calls for reform, and recently announced via press release that he had met with Alex Litvak and members of the Cooperative Community Organization.

“Mr. Litvak and his organization took the time to educate me on many issues that co-op shareholders face on a daily basis,” said Gallo.  “I want to thank them for taking the time out of their evening to meet with me.”

The group advocates for better oversight of co-op boards, which, in New York City, are governed by the Business Corporation Law, which dictates operations to all corporate structures in the state. So, for regulators and law enforcement agencies, violations at a co-op are often lower on the totem pole than, say, violations of major corporate entities around the city – and thus get a smaller share of resources required to ensure compliance.

The Cooperative Community Organization proposes a package of laws to reform co-op operations and government oversight, including (from their website):

• create a Condominium/Cooperative Ombudsman Office (to reduce harassment  and   financial (money) abuse of cooperative and condominium residents)
• reduce Co-op Boards denying purchases or sales of apartments unless timely reasonable cause with clear and convincing evidence is provided
• consider applying the law of “Official Misconduct” to prosecutorial agencies for repeated and consistent refusal to investigate obvious cases of unaccounted for funds (money) involving $100,000 or more and claiming that they have no authority or limited authority.

In his press release, Gallo pledged to support these initiatives.

“When I am elected, I will fight for Mr. Litvak’s common-sense reforms like ensuring fair elections at shareholder meetings and stopping management from arbitrarily obstructing the transfer of co-op shares without good cause.”

UPDATE (9/28/2012): Wording in the second paragraph of this article has been amended to more narrowly focus in on those who have issues with their co-op board, and to remove any suggestion that the problem is felt in every co-op residence. This came at the urging of a reader who felt our wording was too strongly and too broadly stated. The original sentence, the reader’s comment, and our reply can be seen below.