Two Related Questions for co-op apartment owner or real estate agent.
For election of members to their boards, Manhattan
co-ops usually give each shareholder the number of votes equal to the shares the apartment represents multiplied by the number of positions on the Board up for election. These shares can be split among candidates.
While the reason for the splitting is clear, what is the point of the multiplication? Since everyone’s votes are so multiplied, nothing would seem to be gained by multiplication.
I saw a list of the average prices of condo and co-op apartments in given areas (I.e., New York-Upper East Side).
Invariably, the prices of condo apartments were nearly twice that of co-ops.
Was this because the condos were equivalent apartments of the co-ops ( I.e., same size, location, etc.) and were more
expensive (A.)because they were con-ops or more expensive they were more expensive (B) because they were larger, in better
locations, etc.?
You couldn’t tell which from the list.
This is called cumulative voting, and is only used in some co-ops (typically very old ones.) My co-op does not use this method. Instead we just vote our number of shares for each board seat individually. The idea behind cumulative voting is that it makes it easier for a disgruntled minority faction to throw all their votes behind one candidate to get their voice heard on the board. With standard voting, the minority faction would be defeated on the votes for each position.
A co-op typically carries an underlying mortgage on the building itself. That means a significant part of your monthly maintenance fee is going towards paying off the building’s debt, and consequently maintenance on co-ops tends to be significantly higher than the HOA fees in a condo. (ETA: Co-ops also pay their own property taxes for the whole building, which also comes from your maintenance. In a condo, the unit owner pays property tax for their unit.) Co-ops can also sometimes be a lot more restrictive in their rules (mine is thankfully fairly non-insane) and the vetting process to be allowed in can be onerous and intrusive. For all those reasons, the purchase price tends to be lower than an equivalent condo with similar amenities.
Friedo’s reply is very helpful. But his answer to Question 1 does not quite address my question.
Friedo very well explain the difference between cumulative and non-cumulative voting.But my question is not this, but why, in cumulative voting (at least in my co-op) is there the multiplication of votes by he number of people running for the Board. This multiplication wouldn’t seem to change anything, since all votes are multiplied b he same number (the number of people running for the Board).
Thus: If I give 50% of my vote to A, 25% to B, and 25% to C and multiply bu 4 (people running or the Board AND you give 75% to B and 25% to C, and multiply by the same 5, nothing is changed by the multiplication. So why the multiplication?
I suppose it makes it easier to divide up whole-number amounts of votes among many different people. My apartment represents 42 shares and our board has (IIRC) five people, so if I wanted to divide my votes equally among five candidates, I wouldn’t be able to since 42 is not divisible by five. But if everybody’s shares are multiplied by five, I am guaranteed to be able to divide them evenly if I want.
It allows you and your cohort to finely sub-divide your votes. If there are 10 board members running, and you have 3 shares, now you have 30 votes. If your cohort has a minority view-D that you think might win out with proper discussion, you need to get at least one pro-D member on the board to force consideration. If there are 10 Board positions, there are not ten races with 2 or more candidates each There is one big race and whoever the top ten highest are will win.
So you might give all 30 votes to one Pro-D candidate. Or 29 of your votes, or 17 etc. So you would be waiving your ability to vote on (all or some of) the other candidates and putting all of your votes on one.
It is conceivable that everyone could put all their votes behind the same 1-9 people and they’d end up without enough Board members elected. In those cases, a second election is generally held to fill the final seat(s).