People will lie and cheat to get a space for their cars. Here’s how you can reduce your headaches – and increase harmony in the building.
Leslie Jay, a freelance writer, wrote budget discipline in the April issue. She is the former secretary at her Brooklyn co-op and currently works as a copy editor at Crain’s New York Business.
The area, by definition, is small. Its view is ugly. And its architectural appeal is non-existent. But to space-hungry New Yorkers, this piece of real estate is prime.
We’re talking parking spaces – for New Yorkers with cars, the most sought-after location in a metropolitan co-op or condo. “You buy an apartment here, you get on the waiting list at closing for your choice of indoor or outdoor parking,” says Al Volpe, who spent 30 years on the board of Berkeley Towers, No. II, in Woodside, Queens. His complex has 442 apartments in two buildings, but can accommodate only 129 cars: 36 indoor and 93 in slightly cheaper slots outdoor. Supply is so tight that “people will lie and cheat to get a space,” he observes.
Indeed. So, whether you have an underground garage or an outdoors lot, how you manage this issue can mean the difference between a happy home and a headache-filled one.
Space Is Limited
The first given is that parking space is limited. “There are never enough spaces,” observes Steve Greenbaum, director of property management at Mark Greenberg Real Estate. While exact figures are hard to determine, the ratio within Manhattan doesn’t come close to one space per unit.
The situation may not be much better in the outer boroughs and suburbs. “A lot of the properties in Long Island were built in the 1950s and ’60s, when most families were one-car families,” says Alvin Wasserman, director of Commack-based Fairfield Property Services. “The problem is most families now have two or even three cars. We have piggyback parking.”
How do you distribute a scarce asset? In the standard co-op arrangement, parking is a community amenity, usually priced at below-market rates to benefit members, who pay separate monthly fees. Spaces return to the pool after an individual sublets his apartment for an extended period, sells, or dies. As vacancies occur, they’re filled through a waiting list or, less often, via a lottery. In any event, resident shareholders should have priority over subtenants.
It’s important to guard against any hint of favoritism. “We have a standardized policy,” reports William Archer, president of Brozman-Archer Realty Services. “Any request has to be in writing, either on paper or in e-mail. The list is posted every month in the lobby.” Adds Greenbaum: “If there is a list, it’s best held by someone in the bookkeeping department, not the super, not a board member, not a specific person at the management firm. You get on the list by putting your name in writing with the date.”
At some co-ops, shareholders sign up before they move in. Berkeley Towers has its waiting list and newcomers can waive their parking privileges by stating, in writing, that they have no interest in a space. Nonetheless, Al Volpe, the veteran board member, urges them to sign up even if they don’t know how to drive, because they may eventually get a license or marry someone who has one.
“They can always say ‘no’ later,” he points out. Since certain spaces are in less desirable locations, such as the garage rooftop, shareholders are allowed to reject the first option they’re offered. A second refusal sends them to the back of the line, along with people who belatedly change their minds and ask for a slot.
Brigham Park Cooperative, a six-building, 324-unit complex in Sheepshead Bay, Brooklyn, lets shareholders specify which of three underground garages – comprising 107 spaces – they would prefer. They can even request a particular area within a garage.
“These people get bypassed until one of those spaces becomes available,” says general manager Lewis Kobak, a resident and former board member. Everyone else gets two refusals. Spaces here open up slowly, becoming free only when someone dies or moves out. Given the four- to five-year waiting period, some owners take what they’re offered and then put their names on a second list, for people seeking transfers.
To keep spaces from sitting empty while retirees spend half the year in Florida, some co-ops let snowbirds sublet their parking slots to other shareholders (but only with board approval). Generally, the person who has primary claim to the space must be in residence for a minimum period each year – five months at Berkeley, six at Brigham Park. Members who spend less time in New York have to park elsewhere.
Finding an Operator
Another system for handling spaces involves turning over the garage to a commercial operator, a common situation in Manhattan. The operator leases the area from the building for an extended period, such as eight to ten years, sometimes with the option to renew. While the garage is available to the general public, the agreement typically reserves a certain number of spaces for shareholders to rent, at a capped price; an escalation clause may permit increases for all customers over the course of the lease. Both the building and the operator are presumably trying to realize a profit. That factor pushes costs higher for everyone who uses the garage, including co-op members, who may end up feeling exploited.
The main drawback to this deal is that it transforms the co-op into a landlord, raising the specter of litigation. When the lease expires, “the owner might want to go with another operator,” says Phyllis Weisberg, partner in the law firm Kurzman, Karelsen & Frank. “Sometimes, the current operator likes the location and refuses to leave. The dispute ends up in landlord-tenant court.”
Meanwhile, the squatter isn’t paying rent. To reduce the likelihood of this scenario, a building should investigate an operator before awarding a contract – a few firms have records as bad players. For extra protection, require the operator to fork over a steep security deposit, and get a personal guarantee from its owner.
The building-operator relationship is tricky for financial reasons, too. The board needs to tally up its revenues from all sources. If the lessee’s payments are disproportionate to the rest of the building’s income, they could cause an “80/20” problem – i.e., you could violate the IRS requirement that only 20 percent of your building’s income comes from non-shareholder sources, and thus lose your co-op status.
Sell that Space
Another parking solution is to sell the spaces outright, which can eliminate the need for waiting lists and net a tidy bundle for the vendor. After converting a pair of Manhattan apartment buildings into condominiums in the 1980s, Infinity Corporation continued to operate its respective garages as rentals. “Revenues weren’t great,” reports James Goldstick, vice president of Mark Greenberg Real Estate, which manages the properties.
Testing the market in 2002, Infinity turned its 29-car garage in Chelsea into a car condo, at prices that ranged from the mid-$20,000s to the low-$40,000s, depending on the size of the space. All the spaces sold promptly, with the exception of a couple of slots used by rent-stabilized tenants still living in the building. Two years later, the firm repeated the process at its 21-car garage on the Upper East Side, this time at prices starting in the low $30,000s and going as high as the low $70,000s for each of two double spaces. Today, carrying charges at the Chelsea location are about $85 a month, excluding real estate taxes and general condo assessments; at the Upper East Side site, the base rate is about $175 a month.
At both properties, people have to live in the building to buy a space. Because most units do not have parking, an individual owner has no problem subletting his piece of garage to another owner. Intra-condo parking sales are possible, too, but that step holds little appeal. The space “serves as an amenity to make the apartment more valuable” concludes Goldsmith, who knows of at least one Manhattan building that’s considering conversion of its garage.
Car Park Info
Under any of these systems, drivers should get a specific space for a specific car, recording the make, model, and license number with management. “They should register the car with the building and provide proof that it’s insured,” says Albert Pennisi, an attorney who serves as the president of the Federation of New York Housing Cooperatives & Condominiums. “They can’t park commercial vehicles; the space is not for business use.”
In this age of SUVs and Hummers, buildings may have to shrink shareholders’ expectations. New properties have parking designed to accommodate larger cars, but older complexes sometimes run into physical limitations. “Size and height can be a problem,” admits Donald Droz, president of 175-20 Wexford Terrace Owners in Queens, a 350-unit co-op that has 125 indoor and 125 outdoor spaces. “We have an alley for vans. We reserve the right to change your spot if you change vehicles.”
Employees tend to know who belongs and who doesn’t, but to simplify matters, most buildings apply tags or stickers to cars to identify the rightful occupant. Short-term space-holders get a recognizably different sticker, so they aren’t tempted to overstay their welcome. At many properties, anyone who parks in the wrong slot, or parks the wrong car, runs the risk of being towed. That includes people who patronize businesses or medical offices based in a building. Notifying the client or patient is the responsibility of the commercial tenant. “Once you start towing, word gets out,” observes Archer, the manager.
All fees and conditions should be spelled out in writing, starting with restrictions on accumulating personal materials in the garage. “Licensing and lease agreements should say you can’t store anything [there],” advises Pennisi. Real estate attorneys recommend short-term licensing agreements over leases, because a license is easier to terminate.
“There are various degrees of interest in property,” notes attorney Weisberg. “A deed confers ownership; a lease involves less interest. A license comes with even fewer trappings, so it’s a simpler proceeding to get someone out for not paying, not living in the building anymore, or other breaches.”
Speaking of which, the dearth of parking makes it an excellent all-purpose disciplinary tool. Call it auto-motivation. Like boards at many other buildings, the directors of Wexford Terrace restrict parking privileges to shareholders in good standing. “If you’re in arrears, you lose your spot,” says Droz.
Keeping Up Appearances
In return for their payments, shareholders expect a well-maintained facility. For outdoor lots, weather is a major concern. “They’re the last area to be cleared of snow,” comments Greg Carlson, president of Carlson Realty and executive director of the Federation of New York Housing Cooperatives & Condominiums. Constant exposure to environmental damage – water, salt, grit, and seasonal temperature change are among the culprits – means that the cleanest, best-loved lot has to be resurfaced and repainted with lines and numbers on a regular basis. Some buildings tackle this task in-house; others outsource it. “We divide the lot in half, so one side can be done at a time,” says Archer. “We farm out the work to a company that specializes in it, so we get straight lines.”
Garages call for even more attention. Most boards and management firms arrange for frequent inspections, to keep tabs on structural conditions. “We maintain it like the rest of the buildings,” says Kobak. Because of constant traffic, fluid leaks, and the salt and dirt accumulated in auto tires, floors can take a beating. The ventilation system is also vulnerable. One issue that may arise is emissions from the garage – idling cars can send fumes into the property, especially during hours of peak use. “Even if it isn’t a health hazard, it needs to be addressed,” Weisberg warns.
If the garage is being rented to an operator, the general rule of thumb is that the structure is the owner’s problem and maintenance is the lessee’s. Therefore, buildings should spell out maintenance obligations very clearly. It’s not a bad idea to have an engineer look over the space before renting it out.
Compliance with fire codes should also be monitored closely. At a minimum, the area should have sprinklers, fire extinguishers, and sand, as well as clearly marked fire exits. Using tires to prevent drivers from banging into the wall will get a property in trouble with the fire department.
Since parking areas are active around the clock, security is another big concern. All agreements should stipulate that the building bears no responsibility for preventing theft or damage to cars. To promote personal safety, parking areas must have bright lighting and mirrors that get rid of blind spots. Arranging for patrols or stationing guards in lots should reduce the potential for crime. Luxury buildings get an extra layer of protection from concierges and garage attendants.
It’s a good idea to reinforce these efforts with high-tech tools, including automatic openers that owners activate within their cars and alarms that are triggered by unauthorized entry. The best systems are keyed to individuals, so the use of card keys can be tracked, and lost or stolen passes can be cancelled immediately. Drivers should be told to keep automatic door openers in a pocket or on a key chain, rather than in a vehicle, where burglars can find them. This is especially important when the garage connects directly to the residence. There should be two locking doors: one leading into the vestibule, the second into the lobby. As an overall safeguard, “cameras are the best deterrent,” says Pennisi. They may also help a building in other, unanticipated ways.
With or without proper upkeep, accidents can happen. In 1999, heavy rains led to the collapse of the garage at Seward Park cooperative on Manhattan’s Lower East Side. The calamity destroyed dozens of cars and enmeshed the complex in a five-year battle with its insurer, Greater New York Mutual, which was eventually forced to pay out $12 million. “You have to be sensitive to your conditions,” asserts Tal Eyal, president of Cooper Square Project Management, which oversaw the repair of the 40-year-old, 418-car garage. “If there are leaks, you need to do the right maintenance. You also need the right insurance.”
But, above all else, you need the right attitude: be attentive to the details and the roof won’t fall in on you – either literally or figuratively.