Q. I live in a co-op in Fort Lee. Do co-op shareholders have any rights when it comes to the selection of a management company for their building? And if they can’t directly choose which company will manage their co-op building, can they attend the interviews with the potential new companies and ask questions to determine if they want their building managed by one company over another?”
A. “With respect to the question posed, traditionally, the affairs and business of a co-op corporation are managed by a duly elected board of trustees and its duties and powers are outlined and delineated in the certificate of incorporation and bylaws,” states John J. Roman, Jr., principal of the New Jersey-based law firm of Hubschman & Roman, P.C. in Palisades Park.
“By way of background information, in a cooperative form of ownership, legal title to the real and personal property of the development is vested in the cooperative entity, which in New Jersey is traditionally established as a profit, rather than for non-profit corporation. Individuals purchase shares of stock in the cooperative corporation, which carry with it as an incident thereto the right to occupy the dwelling unit, pursuant to the document called a “proprietary lease.”
“Accordingly, the shareholders have a legal interest in the corporation, as an entity and a beneficial interest in the project itself. The corporation, which is managed by a duly elected board of trustees, or directors, manages the project for the benefit of its shareholders.