New York's Cooperative and Condominium Community

Habitat Magazine Business of Management 2021

HABITAT

ARCHIVE ARTICLE

The Side Job Conundrum

It was a no-brainer. The superintendent of an Upper West Side cooperative in Manhattan offered to install a dishwasher at a rate much lower than an average plumber would charge. It seemed like a good deal – until the super improperly installed the device.

 

As a result, the pipe broke, and an entire line of apartments was flooded, with the co-op looking at $45,000 in damages. “The co-op had no policy. There was a lot of finger-pointing. It was no good,” recalls attorney Dean Roberts, partner at Norris, McLaughlin & Marcus. In the end, the building’s insurance company covered $35,000 of the repairs while the building had to fork up the rest.

The super may be every building’s go-to guy – the one who makes sure the boiler is humming properly, the trash is taken out promptly, and the lobby is pristine – but you may not want him working on everything. Nonetheless, old habits are hard to break: shareholders and unit-owners generally rely on these men (women rarely occupy the job) for help in doing everything from changing a light bulb to renovating a kitchen, and often that work is outside the scope of the job.

While side jobs often save residents money and line supers’ pockets with extra cash, the situation isn’t always a win-win. Instead, the arrangements create an array of potential problems for a co-op or condo and must be handled carefully, according to building managers.

Insurance Woes

To begin with, say experts, navigating through the situation is like walking through a minefield without a map. “It is fraught with problems both technically and legally,” says Paul Gottsegen, president of Halstead Management. “The employee could get hurt at any time, whether or not he’s ‘on the job,’ and even though it’s a ‘private’ job on private time, he’s still covered by the building-provided workers’ compensation, so the whole building becomes responsible for this one private job.”

Additionally, if a super doesn’t have his own insurance for the job, the building would be liable for any problems that occur during the work. Even using the building’s tools or ladder could make the co-op or condo a party to the lawsuit. In fact, insurance companies and lawyers frown upon the practice of side jobs since it comes with such a dangerous liability to all shareholders and unit-owners.

“Sadly, most co-ops just don’t deal with this policy,” says attorney Roberts. “People don’t think about it until something goes wrong, and when it does, it can get very bad.” He recommends that boards discuss the issue and set up a policy on what the super can do. For some boards, a complete ban on outside work in the building is best, but others can draft a simple agreement before a side job that says the super is not acting as an employee but as an independent contractor with insurance.

Michael Spain, an insurance broker and principal at the Spain Agency, recently received a claim where the super did plumbing work on the side and something went wrong, making the building potentially liable. The dilemma is becoming so common that underwriters are starting to ask if supers are allowed to do private work in the building before insuring it.

“I don’t see them saying they won’t insure them if they do, but I see them asking, which means it’s an issue they are looking at. It’s definitely seen as a negative,” says Spain.

Supers are also putting themselves at risk when doing private work, since they won’t be entitled to workers’ compensation if they are hurt. In one New York building, a super was installing cabinets for a shareholder on the side and one fell on the shareholder, recalls Edward Mackoul, an insurance agent and a principal at Mackoul and Associates.

The shareholder sued the super (who had no insurance) and the building. The building ended up paying $25,000 to the injured person for pain and suffering, says Mackoul, who handled the claim. “That building [subsequently] forced the super to get private insurance if he wanted to do side jobs,” says Mackoul.

Outright Ban

Peter Lehr, director of management at Kaled Management, reports that all of his buildings have detailed job descriptions for their supers, which forbid private work in units during building time. Still, none of them have an outright ban on private work in the building on off-time.

“I never want to take money out of anybody’s pocket, but you have to make sure these guys are not doing work on company time. If they are going to be a contractor, they have to act like a contractor. They need proper documentation and insurance,” says Lehr.

Although side jobs are sometimes banned or discouraged, some managing agents take a “don’t ask, don’t tell” approach to minor jobs, such as walking someone’s dog or watering plants. Gottsegen points out that even these come with a liability. “Someone going to feed the fish can knock over a $20,000 vase. With contracting, anything can happen, and that’s what we look out for as managers. I’d rather a shareholder hire contractors who are licensed and insured instead of using building staff.”

Striking a Balance

So how should you handle the whole issue of supers and side jobs? Instead of completely pushing the super aside, which can create ill will with the super (and staff), a better course might be to ask him to look at a problem and make a recommendation on who can handle it from the outside and how, industry experts say.

If the super does the work, however, he must be insured, qualified to do the job, and approved by the board as any contractor would, says Spain.

Another choice is to create a system that allows the super to do minor repairs for set fees, such as $30 for fixing a leaking faucet, as one of Lehr’s Queens buildings does. The super gets paid extra and is still covered by the building’s insurance. Or a shareholder can pay the co-op for the repairs, which would then pay the super, ensuring he’s covered.

Zoltan Papp, a super at a 100-unit co-op on Fifth Avenue and a member of the New York City Superintendent Technical Association, says he farms out odd jobs to his porters and forbids them from doing any side jobs that involve plumbing or electricity.

“I’m talking about little things, handy work that is covered by tips,” says Papp, rattling off tasks like tossing out a Christmas tree, spackling a wall, or touching up paint. “The tenant is happy because they saved money, the guy is happy because he made extra money, and I’m covered because I know about it. It makes for a close relationship with tenants and the guys.”

Still, he refuses the work himself, calling it unethical because he lives in the building and is well paid, and he warns the staff to stay away from major jobs. “I tell them, ‘It could cause a fire or flood. Don’t do it because you could lose your job,’” he says. If he is ever in doubt, his go-to person is the managing agent. “I don’t call the shots. I talk to the agents and we make a decision on what we can do.”

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