Legal Learning Lab: Contracts

Access Agreements

The Wild West of Access Agreement Negotiations

Julie Schechter, Partner, Armstrong Teasdale

Host: Bill Morris

Negotiating a licensing agreement with a neighboring property owner can be like a trip to the Wild Wild West. But even in this unruly land, as you’ll learn in this session, there are ways for co-op and condo boards to push back against a neighbor’s extortionate demands.

•          Has the decline in civility between neighboring buildings been exacerbated by the pandemic?

•          Is it important to be creative and is it wise to be accommodating during negotiations?

•          How can a board persuade an extortionate neighbor to be reasonable?

The Shifting Stakes in Neighborly Negotiations

Adam Finkelstein, Partner, Kagan Lubic Lepper Finkelstein & Gold

Host: Bill Morris

Access agreements with neighboring buildings have taken on new wrinkles in the age of COVID-19. In this session you’ll learn to identify some of those wrinkles and how boards can iron them out.

•          What should boards do when neighbors make unreasonable demands?

•          What’s the best way to tweak access agreement deadlines and penalties in the wake of the construction shutdown?

•          Some open-air amenities — terraces, back yards, rooftops — are now more prized than ever. How has that affected negotiations?

Ask Before Accessing

C. Jaye Berger, Prinicpal, Law Offices C. Jaye Berger

Host: Carol J. Ott

At some point in a building’s life, it’s going to need access to a neighboring building, and the same is true for the neighbor. When this situation arises, it’s important to take the right steps so your co-op or condo is legally — and physically — protected. What those steps are, and how to secure protections, is the focus of this session.

•          First, when does this issue typically come up?

•          When a neighboring building requests access, what are the steps a board should take?

•          Where should boards be particularly diligent in their access agreements?

Apartment Alterations

The Power of the Alteration Agreement

Leni Morrison Cummins, Member, Cozen O’Connor

Host: Carol J. Ott

Apartment alteration agreements were signed and renovation work was started — and then in March 2020 it all came to a dead halt. After the government gave the restart signal, one condo owner started work again despite the board’s safety concerns and objections. That’s when the power of the alteration agreement came into play, and in this session you’ll learn how.

•          Cummins was involved in a situation where apartment renovations were halted. She explains what happened.

•          In general, can apartment alteration agreements be amended after they have been signed?

•          If city and state guidelines are violated and the Department of Buildings stops alteration work, who will be fined?

Contracts

The Secret Sauce of a Good Contract

Richard Klein, Partner, Romer Debbas

Host: Bill Morris

Every capital improvement at a co-op or condominium involves a signed contract with one or more vendors. In this session, you’ll learn about a common mistake many boards make when signing these contracts — and the secret to avoiding it.

•          What is the nature of this common blunder?

•          What can an attorney do to help boards avoid it?

•          How does a board benefit from doing the right thing?

Insurance

Who Insures What After a Major Fire?

Arthur Weinstein, Principal, Law Offices of Arthur Weinstein

Host: Bill Morris

A calamitous event in a co-op can wind up pitting a shareholder against the board. The big question is: who’s responsible for which repairs? And that question can lead to many others. This session will provide the answers.

•          Who pays to return a damaged apartment to its original condition?

•          Who pays the rent when residents are forced to relocate temporarily?

•          Should boards amend their proprietary lease to ensure that everyone is adequately insured?

Catastrophes Haven’t Taken a Holiday

Ken Jacobs, Partner, Smith Buss & Jacobs

Host: Bill Morris

The day-to-day challenges that face co-op and condo boards haven’t vanished during the coronavirus pandemic. Catastrophic events still happen — fires, leaks, floods. This session lays out how boards should prepare for a catastrophe, and the right way to deal with the aftermath.

•          How important is it to keep everyone’s insurance policies up-to-date — and pay close attention to the fine print?

•          What are the first steps to take after a catastrophe strikes?

•          Is it wise to hire an insurance adjuster to negotiate a better settlement?

When a Leak Is More Than a Leak

Tom Smith, Partner, Smith Buss & Jacobs

Host: Carol J. Ott

Ask insurance brokers what kind of claim occurs most frequently in co-ops and condos, and they will tell you it’s leaks. The focus of this session is understanding how ordinary claims become extraordinary ones, and what boards should be doing.

•          You’ve got a client with leak problems that illustrate the point. Smith explains.

•          Does insurance solve the problem?

•          How do you evaluate insurance and legal questions when considering leak repairs?

Leak Challenges: Who Should Pay

Ian Brandt, Partner, Wagner, Berkow & Brandt

Host: Carol J. Ott

Let’s say an expensive floor is destroyed because of an apartment leak from an upstairs neighbor. The shareholder wants it repaired and replaced with the same flooring and turns to the co-op to do so. But the co-op’s insurance company says it will replace only what is “original” — and not the expensive flooring. That’s where proprietary lease language comes into play, and in this session you’ll learn why this typical response should be challenged.

•          When the co-op’s insurance policy denies coverage, what should happen?

•          A co-op’s proprietary lease determines who has to pay for what. Brandt explains how and why.

•          How should the replacement responsibility be divided between a shareholder’s insurance policy and that of the co-op corporation?

SESSION HIGHLIGHT

Track: Contracts

Room: Access Agreements

The Wild West of Access Agreement Negotiations

Julie Schechter, Partner, Armstrong Teasdale

Habitat: How do you handle it when a neighbor makes extortionate demands while you’re negotiating a license agreement?

Schechter: One solution we came up with at our firm is to include a reciprocal provision in our license agreement. So for example, if the neighboring building has outdoor space and they’re asking for something wild, like $8,000 a month for access to the outdoor space, we’ve created a provision in our license agreements that says, “OK, we’ll pay you that $8,000, but when you need to do your local Law 11 work and you’re going to need access to our property, the same provisions are going to apply. So it’s $8,000 a month and you agree to that now.” While it stinks for our buildings to pay such extortionate rates, within the next five years when the other building has to do their local Law 11, we know we’ll get the money back.