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AUTHORDaniel Wollman, Chief Executive Officer
PAGE #p. 54
THE BIG PICTURE
Alteration agreements are one of the most fundamental contracts we use in the co-op/condo world. The question often arises: how long should you keep these records? Seven years, which is consistent with the statute of limitations for certain records, or longer?
The fact is that alteration agreements, plans for alterations, or as-built plans for alterations need to be saved forever. Your property manager holds, or should be holding, all these documents on file. Nowadays, we scan these documents and they are maintained as part of the resident’s file. So why is it so important to never let them go?
There are many reasons to have the approved plans accessible. One of the most important is the successor issue. When a new owner joins your community, one of the things they inherit is all the apartment renovations done by previous owners. For example, if I owned an apartment and renovated my kitchen, then sold my apartment, all those changes become the responsibility of the new owner. And if the new owner, or successor to the apartment, sold again, the next owner would assume responsibility for my renovations, as well as the prior ones.
What the alteration agreement does is to specify the rights and obligations of both the housing corporation and the apartment owner. It usually asserts that the cooperative or condominium has no responsibility for design or functionality of the fixtures or improvements made in the apartment. It also delineates the rules for construction in the building: work hours, maintenance of the site, and other requirements.
I recently had a problem in a building where there were some issues involving a bathroom renovation. It appeared to have been renovated more than 20 years ago. The renovation seemed to use a similar piping to what was originally installed in the building. However, the pipe had rusted from the inside out and was no longer working. Several fixtures had no water. The shareholder wanted the building to come in and replace the pipes.
When we opened the wall to look at the plumbing, it was evident that it wasn’t the original piping. If the pipes were from the building’s original construction, the building would fix and pay for the work. In this case, the shareholder had to pay for the repair because it was from an inherited renovation.
It’s incumbent on buyers today to perform due diligence. Your lawyer will review this as part of the sale process and discover what work may have been done by previous owners. Buildings that retain alteration agreements and plans can help in this regard and at the same time ensure that financial responsibility for any repairs is allocated to the proper party.