BOARD OPERATIONS

Does it matter if a co-op only has a part-time super? Will he be able to take care of the building’s needs?

The size of the cooperative (number of units, floors, and square footage), economics/affordability, and demands of the shareholders are the ingredients that dictate the answer to the above questions.

A threshold question must first be addressed; does the property require a super on premises or within a particular distance to the property at all times based on the number of units and the availability of an individual with a boiler license to satisfy New York City regulations?

The availability of an apartment for a part-time super plays into the equation. Better-qualified supers tend to desire the best available living conditions. To attract a strong super, even on a part-time basis, quality housing is important. Stronger supers gravitate toward higher pay and better living conditions.

If the cooperative also employs a porter, the focus for the part-time super can be targeted toward maintaining and repairing the physicality of the property, versus trash removal and cleaning of hallways.

A quality part-time super may work well in certain size properties. It will not succeed if the cooperative is too large or if the super does not have superior skills to accomplish the necessary tasks required by a particular cooperative.

Stuart Halper is vice president of Impact Real Estate Management.

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Are you using too much water? And how would you even know?

One way to find out is through the New York City Department of Environmental Protection (DEP) and its free leak detection and water usage software. In case you haven't logged into the DEP website lately, its customer service portal offers software for a program that monitors water usage and aberrations and also offers several billing options (either monthly or quarterly billing, and either a bill via snail mail or eBilling). 

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My lawyer said there have been four different management companies over a five-year period at the building we are looking at. Should we worry?

If there is a constant turnover of management companies, one needs to look at the reasons why the property has changed hands so frequently. If the board is making poor choices regarding the management company it hires, prospective purchasers should probably be concerned about the board. Poor decision-making can have a negative impact in building operations and diminish shareholder values.

You should know that over the past 10 years, there has been a significant amount of consolidation in the management industry and many management companies have disappeared as they have been taken over by larger companies. You may want to find out if this has been the case in the building you are interested in.

Fred Rudd is president of Rudd Realty Management.

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Living next door to a fast-food restaurant (that delivers) may seem like a great idea at first. But then reality sets in: the noise, the vermin, the smells… Once the stench of grease constantly wafts into your apartment, the novelty of living next-door to a greasy spoon wears off. Take this co-op in Greenwich Village, for example. They tell Ronda Kaysen in this week's Ask Real Estate column in The New York Times that after a hamburger chain opened shop in the building next door to them, several apartments smell like burned grease. "It's worse in the spring and summer when windows are open. Some of the residents approached the manager of the restaurant, who promised to install a filter on the ventilation. That was two years ago. We have filed complaints with 311, with no results. Do we have any rights?" Kaysen explains that this is a chance for the board to "step up and advocate for its residents…. The board could start by contacting the owner of the neighboring building and pointing out the obvious: There might be a problem with the restaurant's ventilation system. Perhaps the restaurant could (and should) invest in a new one — or at least install that filter the manager suggested two years ago." And if that goes nowhere fast? Well, the board can look into filing a private nuisance claim, points out Kaysen, adding one caveat: "[The board] would have to show that the restaurant's use of its property constitutes an unreasonable, intentional and continuous invasion of the co-op residents' property rights." 

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We want to buy a condo, but our bank says they won’t make a loan for that building. Why?

Banks evaluate loans using guidelines supplied by the Federal National Mortgage Association (better known as Fannie Mae). There are three common reasons a building may not qualify under these guidelines. First is the ratio of investor-owned units to primary residence units. Primary residence units are considered lower-risk, as are apartments owned as second homes. Second homes are often incorrectly lumped into the investor percentage. A building’s property manager can perform an analysis to determine an accurate unit ratio.

Another typical issue is the reserve fund. While Fannie Mae requires a 10 percent reserve fund, many banks are willing to accept a lower percentage. We find a reserve study can help the bank evaluate the reserve based on building age, condition, and so on.

The third common issue is insurance coverage. Within bundled insurance policies, it is difficult to assess the coverage for individual properties. A property manager can often supply additional documentation or clarification to address the lender’s objections.

When a building doesn’t meet these or other Fannie Mae criteria, a waiver from Fannie Mae’s Credit Variance Administration System may be requested. Alternatively, another lender may evaluate the loan differently, so it doesn’t necessarily mean that a loan can’t be obtained from a different bank. You should always shop around, and be sure to talk to the manager and the transfer agent about a bank’s specific concerns. There may be an easy resolution.

Mark Motley is senior managing director, owner occupied cooperatives and condominiums, at Rose Associates.

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In every cooperative and condominium, you can expect there to be some tension between shareholders and unit-owners and those who sublet (in cooperatives) or lease (in condominiums). If you think boards or fellow shareholders/unit-owners unfairly frown on subletting, think again. Here are some reasons why they do:

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The building we love has a flip tax. We don't have to pay it now, but if we sell we will. It seems onerous. Can you explain?

To many, it would seem wrong and maybe even unfair to tax the proceeds of a departing shareholder, but consider the following: in many instances, the value of your investment increases over the time of your occupancy.

While most of an apartment's increased value is because of market conditions and improvements within the unit, a good portion is tied into the overall condition of the building. Co-op boards that are diligent in maintaining the assets have added value, too. They have learned to draw capital funds by refinancing their underlying mortgage in a timely manner. The flip tax is another natural revenue stream that allows the cooperative to add to the capital improvement fund without burdening the remaining shareholders.

Peter Lehr is director of management at Kaled Management.

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The thing about living in a co-op or condo building is that you are part of a community. And while the word "community" connotes a positive environment, we all know that tensions can arise for any number of reasons. For one condo dweller, it's a new neighbor. "Someone just bought the unit next to us and is starting construction without permits," he writes in this week's Ask an Expert column in Brickunderground. "What's our recourse?" Brickunderground experts agree that tattling is the way to go. After all, illegal construction work is no joke. But experts also urge caution: "Keep in mind that depending on the work, your neighbor's project may actually be above board." Rather than go in guns-a-blazing and hurling accusations, experts encourage informing the board and perhaps even the managing agent — they will be able to confirm whether the proper permits have been filed. 

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The apartment I want to buy is on the ground floor facing a lovely back garden. I noticed a humming noise, though. Should I be concerned?

I think this is an issue that needs to be looked into and raises a number of questions that need to be answered. What is the noise and has it ever been brought to the attention of anyone from management or the building staff so they can come and hear it? If they have, do they have any idea of what has been causing it and how to fix it? If they do not, then when was the last time the boiler was serviced? Has the boiler service been called to come out and hear the noise? Do they know what is causing it? Is there something wrong with the boiler that can be fixed or adjusted to either make the noise go away or lessen it? Or is this the normal operation sound that the boiler makes when it is on? If this is normal, is there another way to reduce the sound traveling, such as insulating the boiler room or the apartment in question? Is this sound even coming from the boiler? Might there be another source? Has either an engineer or acoustical engineer been consulted on this? If there is a solution, does the building have the funds to address this problem?

Beth Markowitz is president of Merlot Management.

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For various reasons, it's a huge no-no to run a business out of your co-op apartment. But it looks like that's not stopping one co-op resident from running a party-planning business, much to the chagrin of her very annoyed neighbor. He tells Ronda Kaysen in this week's Ask Real Estate column in The New York Times that she "has messengers and deliveries coming and going whenever she has a party to plan." The neighbor has notified the managing agent, "who has passed the information on to the board." But what happens in the event the board "chooses not to enforce the rules." Kaysen explains that "co-ops have a good reason for banning home businesses: They are disruptive, and in many cases violate zoning rules." She adds that the co-op board "should take the matter seriously," never mind the offending neighbor, who "should find a more appropriate place to plan parties." At the end of the day, this becomes a quality of life issue so it does seem unlikely that the board wouldn't move on the complaint. However, adds Kaysen, if the "board seems lax in its response, keep a log of the times when the business interferes with your quality of life. Do the constant deliveries, for example, disturb the peace? Reach out to other shareholders and see if they would be willing to sign a letter urging the board to remedy the situation."

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