Jennifer V. Hughes in Board Operations on January 24, 2013
The board president at a 79-unit Queens co-op learned these lessons the hard way. The directors had hired a company to do their Local Law 11 work, and the job had begun. A new property manager saw some problems with the work and started to look a little deeper into the contract and the insurance coverage.
It turned out that the company did not have a rigging license so it used another company to put up the rigging, even though it had indicated that it would not use subcontractors for general work.
"The problem is that they were not insured to have their own workers on someone else's rigging," says the co-op board president, who asked to remain anonymous. "We're not sure who it was on the rigging. If it was the subcontractor's people, they were not supposed to be on it, and if it was their own people on the other guy's rigging, the insurance would not have covered it if there was an accident."
The president says the work was under way for a few weeks and, luckily, nothing happened. The building fired the contractor immediately, and it has taken several more months to get the job rolling again.
How did it happen? The president says it boiled down to a problem with the former managing agent. "Our property manager at the time told us that we didn't have to have this reviewed by our attorney because he had done a similar contract and he knew what was going to go into it," says the president. "He said we could save money and time because we were eager to get this project going. We trusted him, and that turned out to be a very bad decision."
One problem is that condo and co-op boards are sometimes strangely squeamish about making demands on their contractors. "Boards think that if we make it too complicated then the contractor won't sign it," the president says. "I think that boards have to get over that. If you have a company that is intimidated by a large contract, maybe that's not the contractor you want to deal with."
Boards are sometimes hesitant to bring in their attorney, too. "It's expensive and they are afraid it will delay the project because the attorney will come up with a concern," says the president. "But if the attorney finds something, that's a good thing. The extra cost of a few thousand more in legal fees is nothing compared to what can happen if the job goes bad."
"It's absolutely worth it to have the attorney look it over and make sure everything looks good," the president says. "The contract we just signed with our new contractor is huge, but we are completely covered in it — and they were still willing to sign it."
Illustration by Marcellus Hall. Click on image to enlarge.
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