Management companies poorly run co-ops and condos where many new Chinese immigrants

Management companies poorly run co-ops and condos where many new Chinese immigrants live, and the buildings themselves are saddled with all kinds of debt. The Chinese residents are not proficient in English and are unfamiliar with how their buildings are managed. Often, these residents are busy tending to their own careers, making it difficult for them to fight for their rights.

But on July 9, a number of residents from different buildings in Flushing sought help from a community organization and are also listening to the advice of an attorney, in an effort to find ways to replace the management companies and tenant boards of their co-ops and condominiums.

Management Company Allegedly Embezzled Money for Water Bill Payment, Tenants Have to Foot the Fee

A Chinese woman surnamed Lin, who lives in a Flushing condo on 41st Avenue with more than 80 units, began to grow suspicious of her building’s management company in 2008, when it allegedly collected payment for tenants’ water bills but did not submit them to the New York City Water Board.

After three years, tenants were on the hook for hundreds of thousands of dollars in fees. Later, the management company allegedly said they owed $400,000, with each unit having to pay between $3,000 and $6,000, depending on the square footage of the apartment. Tenants found the management company’s claim extremely dubious and went on their own to the Water Board to inquire. There, they learned that tenants actually owed only $300,000.

An irate Lin alleged that the management company lined its own pockets for many years by misappropriating management fees that the tenants paid. The company, which once managed 11 buildings in Flushing, has had six of their contracts terminated.

A Chinese man surnamed Rong, who lives on 42nd Avenue and Bowne Street, pointed out that his building owes $400,000 in water fees and $480,000 in property taxes. Rong said that his management company collected $200,000 from residents in 2007 to install a new elevator, which the tenants have yet to see.

Rong added that an apartment building on 147th Street and Sanford Avenue took out mortgages twice, for a total of $10 million. Had each tenant not paid $30,000, the government would have had to auction off the building.

Attorney: Tenants Unclear About By-laws, Proprietary Leases Outdated

Real estate attorney Yijun Wang said he was greatly pained by the vast number of cover-ups allegedly taking place in co-ops and condos in Flushing. Wang pointed out that when new Chinese immigrants purchase apartments in China, few have any concept of a tenant board. Also, they do not attach importance to management companies since fees in China are relatively low.

In the U.S., however, tenants become the equivalent of company shareholders when they purchase a co-op unit. They also have the right to attend tenant board meetings and to elect board members. Each apartment building promulgates its own by-laws, and tenants must study the clauses carefully to avoid unscrupulous tenant associations or management companies infringing on their rights, he said.

For instance, it is illegal if a shareholder meeting is not held every year or if the voting process for board members is not transparent. If tenants have concerns about an election, they can request that the New York State Attorney General’s Office send two third-party inspectors to examine the ballots at the expense of the management company. If tenants are elderly or in a weakened state, they have the right to ask another resident to appear at a board meeting on their behalf. Tenants also have the right to request that management companies report how much money has been taken out in mortgage loans.

Wang also pointed out that the fees and items listed on proprietary leases of many buildings are outdated, which he cited as another reason for poor management. The water fees and property taxes given are lower than what is actually collected, which causes confusion at collection time.

Lichuang Zhu, head of the Flushing Neighborhood Watch, said that issues with deceitful management companies are especially prominent in Chinese communities. Beginning two years ago, many Chinese tenants have continually sought out help from the watch, believing that some older tenants, members of the co-op board, management companies and even developers might form small special-interest groups to wantonly manipulate building-wide elections, misappropriate management fees and misreport the cost of renovation work.

Zhu said he has even personally witnessed one instance of malfeasance. At one building, the construction of a flower terrace was supposed to cost only $100,000. But the management company allegedly delayed construction for six months, causing costs to skyrocket five times higher than originally planned.

By Ji Xi Via Mingpao
Translated by Chris Fuchs from Chinese