LAUNDRY-ROOM CONTRACTS

First Cycle: The Basics

The four primary contract considerations are:

• Machine-leasing fees
• Length of time
• Service
• Room renovation

Laundry-service companies pay three types of fees: flat monthly amounts, a percentage of what the residents spend, or some combination of the two.

"Some co-ops like percentages," says Denise Savino-Erichsen, vice president of Automatic Industries, while noting that in buildings "where everybody goes to the Hamptons in the summer" or flee to Florida during the winter, boards tend to prefer flat rates. That's also true of buildings with many refurbishing residents installing washers-dryers in theirs apartments, says Irwin H. Cohen, president of A. Michael Tyler Realty.

Note that you're allowed to press for a better deal than on a company's standard contract, says Steve Troup, a partner in the Manhattan law firm of Tarter Krinsky & Drogin. "We find that the vendors are always willing to negotiate quite a bit on the fees," he says.

What's the length of a contract? While no industry standard exists, the average is about seven years. The more equipment and improvements a company puts in, the more time they'll ask for, in order to offset their investment. Companies are also often willing to renegotiate mid-contract, in exchange for extending the contract a few years.

As for how many machines you'll need, the rule of thumb for a high-rise is one commercial washer and dryer for every 20 apartments, says Savino-Erichsen. Garden-style facilities, she adds, generally need more machines; residences with many senior citizens usually install fewer. Be sure to include extra-large equipment so that even those residents with in-apartment washers and dryers come to the laundry room to wash their oversize comforters and blankets.

Good equipment servicing is as important as a reasonable free-split. Some companies service buildings around the clock and on weekends; others are available only during the week.

Laurence Mascera, board president of the 198-unit Saratoga condominium on East 75th Street in Manhattan, recalls how service from his building's former vendor "was, at best, Monday through Friday," and it regularly took 48 hours to get someone from the company to come repair a broken machine. So when Mascera's board solicited proposals from new vendors, it "put a greater weighting on the service aspect," he says. "Poor service at any price doesn't matter."

Mascera insisted on the contract including financial penalties for poor service. Most agreements allow for contract termination for subpar service, but Mascera says it is a hassle to change operators. "We don't want to make money off the penalties," he says. "We just want the laundry to work." Service Directions, he says, agreed to the contract.

Finally, laundry companies routinely agree to improve the laundry rooms, even picking up the bills for the bookcase or air conditioning as part of the cost of doing business. Cohen says he worked with Coinmach on a renovation in one of his Queens buildings that "turned this really ugly room into one really beautiful facility," with dropped ceilings, new lighting, new machines, a folding table and a bench. "People are actually happy to go down there, pull up a bench and read a book," he says. Cohen routinely insists that long-term contracts include a provision that the company spruce up a laundry room halfway through the term.

Having a nice facility means "people are going to use it more," says Fowler, "and that's a win-win."

Second Cycle: New Tech, New Regs

Virtually all companies have switched from coin-operated machines to those using smart cards. Card-outfitted washers and dryers break down less often because there are no coins that can jam, the biggest cause of malfunctions. And, short of high-level hacking, you have no worries about skimmed receipts because the amount of money taken in is digitally tallied.

Large buildings have the option of two kinds of value transfer machines (VTMs) for adding money to smart cards: those that accept cash and those that accept credit, debit, and bank cards. Non-cash VTMs are costlier to the laundry companies because they require a dedicated phone line and the companies must pay a small charge every time a resident uses a credit card. And non-cash VTMs may face resistance in buildings where lower-income or elderly residents may not have access to credit or debit cards.

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