CO-OP/CONDO BUYERS

Life in a co-op is all about community. But sometimes community living can present challenges ranging from personality clashes to more serious matters, such as dealing with a super who's, well, less than super. Take this co-op in the Upper West Side, for example, which is coping with an allegedly belligerent live-in super. "[He] appears to have a drinking problem. He literally passed out, face down on the sidewalk, in front of the building early one morning. He got into a physical altercation with a vagrant in front of the building and had to be hospitalized. He verbally abuses building staff," one of its shareholders writes to Ronda Kaysen in this week's Ask Real Estate column in The New York Times. According to the shareholder, the super doesn't seem to be drinking during business hours. "But shouldn't he be coherent and alert at all times, ready to make an important decision at any time, if needed?" The co-op board doesn't want to make a move "because they think that what he does on his own time is his own business." That's quite a pickle. "A live-in super has a right to a private life," answer Kaysen. "But when he behaves in a worrisome manner in or outside the building, his personal choices become his employer's problem, because management sets the standards for workplace behavior." Furthermore, the super needs to be available in emergency situations, even if they occur in the middle of the night or any time before he starts or after he finishes his shift. The board's "cavalier attitude" is especially alarming, Kaysen points out. "[It] puts the safety of residents and other employees at risk." If the board feels firing the super is too drastic a measure, then it should certainly takes steps to improve the situation. That may mean conducting an evaluation and putting the super on probation to give him a chance to rectify his problematic behavior.

Read more

We want to buy an apartment in an HDFC co-op, but there is no financing permitted. Why?

HDFCs are unique and quirky properties, and each can have its own set of rules and restrictions. In years past, banks didn't know what to make of HDFCs; now, unfortunately, most lump them all together.

Why the reluctance? First, many HDFCs (that stands for Housing Development Finance Corporation) are not 100 percent sold. Often, a percentage of rent-stabilized apartments are owned by the corporation. Banks don't like this. Also, many (not all) HDFCs are saddled with arrears issues — financial, tax, etc. Where a regular co-op would be acceptable to a lender, a hybrid like the HDFC is overcomplicated.

The HDFC itself may prohibit financing. Prospective purchasers should carefully read the corporate bylaws. Frequently, HDFC shares are not permitted to be used as collateral. In some HDFC proprietary leases, lines of credit or home equity loans are prohibited unless the funds are for improvement of the unit itself; financing a car, second home, or college education are out.

If no bank is willing to grant a loan, the best bet for home buyers is to purchase an HDFC unit with cash. Some HDFCs may be open to self-financing; buyers, in essence, obtain a mortgage from the co-op. More HDFC corporations may want to explore this; it offers significant advantages to both sides.

Buying in an HDFC can be frustrating, to put it mildly, but with patience and persistence, an HDFC remains a great, affordable real estate option in New York City.

Josh Koppel is president of HSC Management.

Read more

My lawyer is warning me that, because of the building's age, I should look elsewhere. Should I?

Every building has problems, but sometimes older buildings are built better. New construction techniques and methods are proven to be less effective compared with old ones. Inspections and due diligence are very important tools to make proper decisions. Some of the things to look out for are electric wires, plumbing, treatment for termites and other bugs, lead paint, energy-efficient windows, and the heating and air-conditioning systems.

Sami Najjar is a partner at Sandra Greer Real Estate.

Read more

A few months ago we told you about how some prewar buildings in Lower Manhattan, which were originally built as office towers in the early 20th century, are being converted into residences. These buildings include the iconic Woolworth Building. If you're wondering how the transformation of its top floors into high-end condos for the super rich and mega lucky is progressing, then wonder no more. As part of its "Real Estate NYC with Katherine Clarke" series, the New York Daily News got a look. Alchemy Properties CEO Kenneth Horn tells Clarke that it was important to preserve the building's grandeur and the character rather than try to modernize it. Smart move. Check out NYDN's video… and maybe consider playing the lotto. 

Read more

The minutes of the building I'm looking at are incredibly detailed with quoted exchanges from the meetings and a lot of personality. What should I take away from that?

Minutes should record the actions of the board in a very succinct and businesslike manner. They should not go on for pages and they should not get into all of the scuttlebutt of the building. The minutes should be short, to the point, and leave out all the other "colorful" actions that may go on during the decision-making process by the board.

If you are reading minutes where there are quotations and other peripheral items included that says to me that there's a lot going on in that building and the board isn't together on its decision-making processes. Less is more when it comes to taking minutes and the business of the building should be properly recorded in them.

It is important to remember that the minutes become public record when they are read by outside counsel on behalf of prospective buyers. Therefore, it is important for the minutes to reflect business and business decisions only. Boards should also be aware that there is potential liability in "colorful" minutes.

Timothy Grogan is president of Grogan & Associates.

Read more

My mother wants to visit us in our new apartment but she's in a wheelchair and there are some steps up to the front door. How hard would it be for the building to install a ramp, even a temporary one?

This is a big, big deal. Whether it is a permanent ramp or a temporary one, they must comply with certain specifications.

Any purchase of a temporary or "de-mountable" ramp must comply with the American National Standards Institute code 117.1-2009 for requirements on dimensions, slope, and clearances. A structural engineer must approve the ramp's structural adequacy or come with fabricator shop drawings bearing a New York State-licensed engineer seal. It must be noncombustible (recommended for compliance with fire codes for the means of egress and the [handicapped] accessible route). Whether it is temporary or permanent, it must adhere to maximum encroachment onto existing public way per the rules. Filing of the documents and acceptance by the Department of Buildings is recommended to memorialize the installation and use of public way. The insurance company should be notified to include the ramp in the protection offered by the building's liability policy.

The hiring of the professionals and the purchase of the ramp will cost thousands of dollars depending on the configuration of the building. There are buildings that, because of their physical structure, cannot accommodate a ramp. If it is possible to add a ramp to the building and the building agrees to go forward with either a permanent or temporary one, the process is lengthy and you should not plan on your mother visiting for some time.

Gerard J. Picaso is president of the Gerard J. Picaso Division at Halstead Management.

Read more

Our lawyer is reviewing the board minutes of the co-op we want to purchase. What's important?

The state's Business Corporation Law requires co-op corporations to maintain minutes of all board meetings. Reviewing the minutes could also reveal issues involving the heating system, plumbing, roof, or façade of the building. A review may reveal if the board is using assessments to offset proper budgeting. The minutes may state that the board is contemplating a major project that may result in an assessment or substantial increase in maintenance charges.

Questions may arise: Why are so many assessments needed? Is the board overspending? What work has been completed and what work is still outstanding?

By reading the minutes of the board meetings, you may find information leading to any physical or financial issue in the building.

Another topic to be concerned about in the minutes is arrears. Why does this building have a large number of people in arrears on the monthly maintenance? What is the board doing to address that issue? Is the attorney involved? How proactive is the board in its actions to obtain payments? The building collects the monthly maintenance and operates from those collections. If a large number of shareholders fail to pay on time, the building may be unable to pay its bills, which can lead to many other issues.

Brian Scally is executive director of management at Garthchester Realty.

Read more

As non-owners, renters don't have the same stake in a building as do shareholders or unit-owners. Never mind that assessments and maintenance increases don't affect them. Needless to say, for these and other reasons, renters don't sit on boards. But what happens when they feel like they feel mistreated and want to have a voice and representation? Some renters have lived in their co-op or condo apartments for years but feel like they are treated differently from owners by building staff. That's the case for renters in a building on Manhattan's Upper West Side. One of them tells Ronda Kaysen in this week's Ask Real Estate column in The New York Times that "the superintendent tends to treat [renters] as second-class citizens. Having a voice on the board might help." Stop the press, a renter on a board? "Good luck finding condo or co-op owners willing to vote a non-owner onto the board — assuming they even can," says Kaysen. "The bylaws of most buildings prohibit non-owners from sitting on the board. But even if your building were to permit the practice, owners (who are the only voting members) would have little incentive to elect a rental tenant. From an owner's perspective, a renter would not feel the pain of a special assessment or maintenance increase. So it would not make sense for a rental tenant to vote on such matters." So what recourse, if any, do renters in this type of situation have? Kaysen suggests forming "a tenants' association to demand a change from the condo, as there are rules that guarantee services and protect against harassment. But if tenants want a voice in day-to-day operations, they could suggest that a tenant be offered a seat on a house committee that reports to the board. Such committees frequently offer seats to residents who are not board members. They do not delve into the finances of the building but can influence quality-of-life issues." The more you know! 

Read more

I work in sales and my broker is suggesting that I offer to put a year's worth of maintenance in escrow to get board approval. Why?

A co-op's board of directors has a fiduciary responsibility to ensure that a potential buyer is solvent and able to pay maintenance, any assessments, and all just debts. The board will review a potential buyer's financials, such as income tax returns, bank and investment account statements, a statement of assets and liabilities, and an employer compensation verification letter.

When a potential buyer's salary is commission-based, the board can be concerned that the buyer may not be able to pay maintenance and any assessments because the buyer doesn't receive a regular paycheck. To alleviate this concern, brokers may recommend that the buyer offer to put a year's worth of maintenance in escrow. The escrow can be drawn down if the shareholder defaults on paying his/her maintenance and any assessments.

An escrow agreement is drawn up if the board approves the purchase on the condition of the buyer submitting escrow. I would recommend that potential buyers with commission-based salaries offer to put maintenance in escrow.

Cynthia Graffeo is director of client relations at Argo Management.

Read more

It's been a while since we last heard about Hidrock Realty's plans to convert the Pavilion Theater in Park Slope into 24 condos, a retail space, a 16-car parking garage and a "high-quality" cinema. Well, the first renderings are out and locals are giving the developer a good old-fashioned New York thumbs down. According to DNAinfo, "locals slammed the proposed design for a new five-story condo building next to the Pavilion Theater at a meeting Thursday [last week], with some comparing the new structure to a 'penitentiary in Sunset Park.'" Ouch. Although Community Board 6's Landmarks and Land Use Committee gave Hidrock Realty's plans the green light, it did so on the condition that architects tone down the design. The committee wants to see a less bright brick color and for the five-story building to be set back so it looks less bulky. "The base of new building should be more reflective of the residential character of Bartel-Pritchard Square," said Community Board 6 member Jerry Armer to DNAinfo. Although the developer's architects and preservation consultants insist "that they had tried to design the new condo building to echo Park Slope's famed late 19th century architecture," it looks like Hidrock is going back to the drawing board. "A spokesman for Hidrock said the developer is 'optimistic' that the design can be tweaked in response to locals' concerns," DNAinfo reported. Meanwhile, the "Landmarks Preservation Commission will review Hidrock's plans Aug. 4 and the developer will also need a zoning variance from the Board of Standards and Appeals to move the project forward."

Rendering: Hidrock Realty

Read more