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Habitat Magazine July/August 2020 free digital issue

HABITAT

ARCHIVE ARTICLE

Fee. Fine. Form. No Fun.

The daily to-do lists for property managers in New York never seem to get any shorter. Overseeing capital projects, supervising staff, seeing to repairs, responding to shareholders, communicating with vendors… The list goes on.

Making their jobs more complicated is the ever more demanding and frequently frustrating tangle of city codes and regulations pertaining to residential building operations, from fire extinguishers and EXIT signs to stove knobs and rooftop water-cooling towers. Fuel tanks must be tested, elevators must be inspected, and building facades must be deemed safe, on schedule, and with the proper filings with city agencies. Keeping track of every regulatory detail has become increasingly difficult – and time-consuming.

“It could occupy a whole eight-hour workday each week,” says Stacey Kwiatkoski, manager of operations at MD Squared Property Group, which has two central-office employees dedicated to compliance matters. “You are dealing with multiple agencies, all of which require different actions.”

So, hoping to dodge expensive fines and penalties, larger management firms are dedicating more resources to compliance oversight. In particular, they are turning to technology to help their managers stay on track.

Compliance Platforms

With regulations and requirements scattered among a host of city agencies, each with its own set of procedures, there is no single clearinghouse for management companies to consult on their overall compliance status. While many companies rely on their own spreadsheets to track compliance needs, more are turning to compliance monitoring software platforms that enable them to see all of their buildings’ compliance status in real time, along with which complaints and violations need to be addressed.

“Our job is to aggregate and analyze the data from multiple agencies, so it’s clear to clients what’s the next step,” says Jonathan Fertel, vice president for customer success at SiteCompli, one of the dominant platforms in New York. “A lot of this information has historically been reactive. We try to make the information actionable.”

For example, Fertel reports that SiteCompli’s system sends out alerts when a complaint hits the system and lets managers know what to do before it becomes a violation. Similarly, if an inspection comes back labeled unsatisfactory, the system lets managers know so that, before getting slapped with a fine, they can address the issue with their service provider and the appropriate city agency.

Violations are still inevitable, however, especially since the city government is constantly looking for new revenue streams. Monitoring platforms help management companies stay on top of pending violations, as well as alerting them to the actions required to prevent new violations. “We can track items and receive critical alerts when we are in the field or in the office,” says Kwiatkoski of MD Squared. “In addition, we receive weekly and monthly updates of permit and license expiration dates, hearing dates, and filing deadlines.”

Kwiatkoski believes the benefits of the service outweigh the cost, because losing track of violations can be a major financial liability. Take, for example, the Department of Sanitation, which is infamous for its frequent fines. “Property managers have to be mindful of each sanitation violation they simply pay and ultimately plead guilty to because after 12 of the same violations, the price doubles,” Kwiatkoski says, citing a dirty sidewalk or the mixing of recyclables with non-recyclables as common sources of violations. “After another 12 violations, that price then doubles. And so on.”

Cooling-tower compliance also requires close monitoring, says Stephanie Cardello, director of compliance at FirstService Residential. The inspection and testing rules are complex, requiring constant communication among the on-site staff, service provider and the party filing all the paperwork on city and state portals.

Her four-person department also relies on a compliance platform to follow the status of complaints, violations, inspections, and permits on a 24/7 basis. While property managers are ultimately responsible for seeing that their buildings are in full compliance, the added layer of a centralized team overseeing regulatory matters helps ensure all deadlines are being met, Cardello says.

Jessica Tusing, compliance director at Argo Management, maintains a database of all of the company’s building compliance needs and centralizes certain compliance requirements, such as fuel-tank testing. (Tusing explains her approach in a video at http://bit.ly/

ArgoCompliance.) For example, by acting as the point person for the vendors doing tank testing or boiler tune-ups, she can ease the burden on managers and negotiate lower prices, she says.

A Day in Court

Argo often contracts with Jack Jaffa & Associates, another major compliance platform, to help resolve any outstanding violations. Jaffa also offers a monitoring and alert system. But the foundation of its business is as a violation removal consultant, says Megan Feldman, the company’s sales director. The company is divided into departments that specialize in dealing with specific city agencies. Clients contract for violation removal services on an à la carte basis.“We review the violation and advise the client on what needs to be done and why they got a violation,” Feldman says. “The goal is to get the violation removed and corrected and, at the same time, try and get them the lowest penalty possible. Our employees understand how the agency operates, and we’re able to provide a more informed service for the client.”

SiteCompli works with an outside administrative law firm that handles violations and hearings for clients who want resolution services, Fertel says.

Some management companies, including MD Squared, consider compliance management a cost of doing business and do not charge buildings extra for using it, while others pass the cost along to clients. SiteCompli charges for its service on a per-unit basis, roughly $1.25 to $1.50 per-unit per month, with a $250 monthly minimum and an annual subscription. (Management companies with very large portfolios typically get discounts.) Jaffa declined to disclose its fees, other than to say the company charges a flat rate per violation, including all work required to resolve it, and a monthly fee for monitoring services. A self-managed building could contract for these services if the board is prepared to pay the $250 monthly minimum.

As he talks to potential clients throughout the city, Fertel of SiteCompli is finding that while property management in New York is still “very much an old-school pen-and-paper industry,” the thinking is changing. Companies often argue that they don’t wish to replace the valued employee they have monitoring compliance with software. “But when we start showing the client what they’re not aware of, they quickly realize they need us,” he says. “We don’t replace their employees – we make them more effective.”

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SIDEBAR 1

Jack Jaffa & Associates

The story of compliance company Jack Jaffa & Associates is one of natural progression. In the 1990s, Jack Jaffa made a name for himself testing paint for traces of lead. “In addition to doing the testing,” says Megan Feldman, sales director at the company, “he would assist clients with clearing the lead violations they received. Because of this, clients requested his assistance with other agency violations.”

Jaffa partnered with Ben Rottenstein, the former director of the Department of Buildings’ J-51 tax-abatement program, to create a company to help buildings clear their violations. The company has grown to nearly 70 employees.“We’ve developed a lot of technology to help our clients be proactive about various compliance issues,” says Feldman, “in addition to giving them the ability to log on to our website and run reports on our activity and see which violations we’re working on for them.”

But monitoring is only half the battle, says Feldman. The company also represents clients at hearings and in dealings with city agencies.

“We’re the only company in New York that provides both the technology and the monitoring and the proactive portion of the business, in addition to the the staff and the support of actually handling the violation,” she says. “You’re able to log on and not only see which violations exist on your property, but you can assign them to our office, as well as see which ones we’re already retained for. You can see who in my office is working on it.”

That transparency is intentional, according to Feldman: “We like to say that we’re not just giving you information. We’re providing a solution to the violation from A to Z.”

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SIDEBAR 2

SiteCompli

SiteCompli was founded in 2008 with a very simple goal: make city-required data – inspections and filings and such – easy for building managers to use.

Launched by Jason Griffith and Ross Goldenberg, who both came from tech backgrounds, the company has about 65 employees in New York. Jason’s father was an elevator consultant, says Jonathan Fertel, vice president for customer success at SiteCompli. “He saw his father poring over Department of Buildings data for elevator inspections, and [he asked], ‘What are you doing? Why are you putting together a report of inspection data? How long does it take?’”

“There’s an ocean of data out there,” says Jeannie Cambria, director of marketing, “but data alone is not enough. For the companies that we work with, knowing what to do next is effective only when you show the right thing to the right person at the right time.” When a building receives a complaint or an alert from a city agency, SiteCompli immediately sends a notification to a designated person at the building. The main focus is “data expertise,” says Cambria. “A big building might get hundreds of these alerts every single day; [that’s] not going to be useful.”

SiteCompli has partnered with Cohen, Hochman & Allen, the largest administrative law firm in New York City, to represent clients at hearings and resolve violations. Clients work with the law firm directly, says Cambria. “People like having someone who can help them navigate this environment in a way that helps them get more done and solve issues.”

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