You're new to your co-op and have just been elected to the board. A shareholder requests approval to do some minor renovations on her apartment – put some molding down here, do a little painting there. Dutifully, you look up your building's alteration agreement to see what's covered — and wind up wading through pages and pages of clauses and contradictions. One part says such-and-such is OK. Another says it isn't. The legalese flies fast and furiously. Help!

Alteration agreements are essential documents, since a board must be both a guardian of the co-op's security and safety, and an enabler that helps shareholders realize the full potential of their homes, through refurbishment and renovation. You need to create a policy that considers and clearly communicates certain key issues. And for structural, safety and liability reasons, you should require that residents who plan major renovation or repair work sign an agreement that spells out their responsibilities and establishes standards they must meet in order to receive approvals.

Setting Policy

To some extent, what goes into a policy is defined by how a board sees its role and the image of the building. "Each building has its own temperament," says Dan Futterman, president of a 42-unit Queens co-op, who feels that alteration agreements should be derived from a board's overall policy. Is a board closely controlling or laissez-faire? What kind of scrutiny does it feel it should have?

Until about ten years ago, Futterman's co-op had an ad hoc arrangement for approvals, rather than a formal policy. "We'd do it on a case-by-case basis," he recalls. "Then we got some feedback from our new manager [and] realized that we needed to have some [standardized] controls. We wanted to make sure that what the tenants wanted to do on their apartment didn't affect the building as a whole."

Such an attitude is crucial, warns attorney Ed Braverman, senior partner at Braverman & Associates, who cites a 100-year-old, wood-joist building in Brooklyn in which a shareholder proposed doing a renovation. The co-op's engineer requested a structural analysis of whether the wall was supporting the joist. The shareholder's architect said he didn't have time to prepare one, but that he would be present when they took down the walls. "It was like, ‘Trust me, I'll oversee it,'" says Braverman. The board went along with it — and when the wall was removed, the architect wasn't present, and there were problems. A lawsuit developed, all because the board had overridden the engineer's request.

Besides offering legal protections, an alteration policy is good for psychological reasons. Having the process spelled out creates an awareness among residents that the board is paying attention. If someone wants to punch a hole through a brick wall to install a window or redirect a four-inch water line, he or she will be more likely to stop and give it serious thought before proceeding.

Other reasons to have a policy are purely practical. A property with one elevator, for instance, may need to limit the hours of construction work and the number of units allowed to do alterations at one time. In another example, a self-managed building may not have the resources to closely supervise every alteration.

Selling Point

In addition to helping avoid damages and lawsuits, having the right kind of agreement in place is important for sales. Someone may want to buy an apartment because of the potential he or she sees: adding skylights to brighten a dark room, for instance, or tearing down a wall to open up the space. In such cases, overly stringent restrictions may end up quashing the sale. While boards must by law adhere to the "reasonableness standard" of most offering plans, which specify that a co-op will not unreasonably withhold consent to an alteration, reasonableness may depend on the eye of the interpreter.