New York's Cooperative and Condominium Community

Habitat Magazine Business of Management 2021

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ARCHIVE ARTICLE

Too Hot to Handle

The first explosion hit on March 12, 2014, a ferocious boom in East Harlem that leveled two apartment buildings, killed eight people, injured 70 and displaced 100 families. A crack in a nearby gas main was the culprit, and Con Edison wound up paying $153 million to settle charges brought by the Public Service Commission.

The second explosion came a year later almost to the day, another deafening boom that ignited fires that destroyed three adjacent buildings in the East Village, injured 13 people and left two dead. The culprit this time was a landlord’s illegal scheme to tap gas from a meter in one building to provide gas to tenants next door. The building owner, a contractor and an unlicensed plumber were found guilty of manslaughter and related offenses.

That was when the city government decided to take action. Lengthy hearings and consultations resulted in Local Law 152, which, as of last year, requires all building owners, including co-op and condo boards, to have their gas lines in common areas inspected by a licensed master plumber every four years. Inspectors do not enter apartments (unless there’s a gas meter inside the apartment), and one- and two-family homes are exempt from the law, which some critics see as potentially dangerous loopholes. Failure to comply with Local Law 152 can result in a $10,000 fine. But as many co-op and condo boards are learning, compliance can be a lot more expensive than that. And to make matters worse, an unexpected wrinkle has developed: some plumbing companies are declining to take on gas-line inspection jobs.

 

It Isn’t Cheap

When Co-op City, the massive, 15,373-unit development in the northeast Bronx, got ready to do its first round of mandated gas-line inspections last year, it was in uncharted territory – and so, it turned out, were the plumbers who bid on the job.

“After we sent out Requests for Proposals, 15 vendors showed up at the mandatory bidders conference,” says the co-op’s property manager, Bob Klehammer of Douglas Elliman. “We got a total of three bids.”

Klehammer speculates that some of the bidders were surprised by the scope of the inspection job at a property that has 35 high-rise buildings, eight pump rooms, three commercial malls, a school building and a power plant. “And,” Klehammer adds, “some of the companies may not have been aware of the special qualifications their plumbers need. Having to walk all of our hallways and stairwells with a gas sniffer took a lot of time.”

And it wasn’t cheap. “It cost us $375,000 just to do the inspections and filings,” Klehammer says, adding that the inspections revealed the need for only a few minor repairs. “I’m used to big numbers here. My frustration is with all these city mandates. They’re usually the result of a tragic event, but the cost gets added to co-op and condo budgets. I’m not belittling the tragedies of the gas explosions, but I don’t see the benefit of putting these additional costs on building owners.”

 

A Lose-Lose Situation

Mike Smith was not surprised when he heard that so many plumbing companies were unwilling to perform gas-line inspections at Co-op City. That’s because Smith, a licensed master plumber who runs a small family business called East Meadow Plumbing & Mechanical, declines all Local Law 152 jobs. “Anybody calls for a gas inspection, I won’t do it,” Smith says. “Too much liability. After I do an inspection, maybe something happens that’s out of my control. If there’s an explosion, they’re going to go after me, and I have to prove that somebody did something after I did my inspection. I don’t need the aggravation. I’ve got plenty of sprinkler work.”

It’s not just the little guys who are balking. Phil Kraus, president of century-old Fred Smith Plumbing & Heating, has decided not to send crews out to inspect gas lines. His reasoning is twofold: inspections expose the company to liability, and they have the potential to damage the company’s hard-won reputation.

Of the exposure to liability, Kraus says: “If you test a system and you don’t find anything wrong, you write up your report, and everything’s fine. But I know for a fact that you can test a gas line in a basement, and one day it passes. If the temperature drops sharply, say 30 degrees, that pipe might leak, and they shut the building down. We could be blamed for not testing properly. It could cost thousands of dollars to get service back. If a building gets shut down or there’s a loss of life, insurance companies are going to think twice about insuring us.”

The threat to the company’s reputation puts it in a lose-lose situation, as Kraus sees it. “On the one hand,” he says, “co-op and condo boards could end up blaming us for shutting their building down. On the other hand, if my crew points out potential problems, I don’t want somebody to say I’m trying to drum up work for the company. I’ve been around too long, and I don’t want people to misconstrue my intent.”

For Kraus, it comes down to a simple question: “One bad mistake, and you’re out of business. And they can come after you personally. We don’t need to expose ourselves to the liability.”

 

A Stopgap Measure

Matt Castiello, among others, needs it. When the first wave of the coronavirus pandemic shut the city down in March 2020, Castiello, the president of Stellmar Plumbing & Mechanical, suffered such a sharp drop in business that he jumped at the chance to perform gas-line inspections.

“We’re doing it because I had nothing else going on,” Castiello says. “So far we’ve done about 50 inspections, but you can’t just send anyone to do them. School and qualifications don’t make someone prudent. Right now I have three men I trust to do this because they have to know how to look for illegal fittings and connections and materials.”

Yet Castiello is aware that even having prudent, qualified master plumbers doing the inspections is no guarantee that trouble won’t arise. “Here’s the problem,” he says. “Even if you have the right people, how do you prove you didn’t miss something if there’s a leak six months from now? If there’s an explosion, it’s going to come back on you. I understand why a lot of plumbers don’t want to do this. It was a way for us to pick up the slack when the pandemic hit, but if something else came along, I’d back out.”

 

A Twist to the Twist

Len Williams, the vice president of McCready & Rice Plumbing, had a front-row seat at the birth of Local Law 152. As the treasurer of the city’s Master Plumbers Council, Williams testified at one of the City Council hearings that preceded the drafting of the law.

“We objected to it because the law was driven by explosions that had nothing to do with licensed plumbers,” Williams says. That general objection fell on deaf ears, but it led to a more specific one. “We were more concerned that workers below the level of master plumber have to undergo additional training under the related Local Law 150. Some of the registrations and training classes are overkill – and a tremendous cost and disruption of service. That’s kind of silly.”

And more than a little costly. Stellmar’s Castiello says the cost of mandated classes and tests are passed on to the customer. “It’s part of your overhead,” he says. “I eat the cost in the beginning, but you can base your hourly rate on that added overhead expense.”

City rules aren’t the only ones driving up costs. There is also a new federal rule that anyone working on a gas line between the point of entry to the building and the meter must take an eight-hour course and pass written and practical exams. The cost is about $6,000 per worker, Williams says, and that, too, gets passed on to the consumer. (The city allows workers below the grade of licensed master plumber to conduct gas-line inspections after they’ve taken the federal course and passed the exams.)

In a twist to the twist, Williams believes Local Law 152, for all its excesses, might not have gone far enough in certain areas. “The law is probably not a bad idea,” he says, “but by not inspecting lines inside apartments and private homes, you could be missing a lot.”

Case in point: On Feb. 18, a gas explosion ripped through a three-story townhouse in the Bronx, injuring 10 people. Department of Buildings inspectors found illegal gas hookups on the ground floor. A law that feels heavy-handed to many people had, indeed, missed a lot.

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