LEGAL/FINANCIAL

New York City's aging infrastructure can have costly consequences. It can spell bad news to co-ops and condos, particularly smaller buildings, which are trying to stay afloat in an increasingly expensive city. Unfortunately, emergencies can strike at any time, whether or not your building is financially ready for them. There are steps your board can take right now to save some money instead of being caught unawares.

Here are some creative ways your board can save money.

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Finding mold is never fun. Where there's mold, there's probably a leak. And once a co-op or condo board is notified about the presence of mold, it needs to move quickly to not only eliminate the mold safely but also find and fix the cause. The board at one particular condo in Hudson Heights, Manhattan, doesn't want anyone's health to suffer, but it doesn't want to get fleeced by a contractor, either. "When mold companies inspect a building for mold, they have a vested interest in recommending mold remediation. Because of this, our condominium is having difficulty interpreting the test results, which seem in part to be a marketing ploy," the board writes to Ronda Kaysen in this week's "Ask Real Estate" column in The New York Times. Although the condo board's concern is a valid one — people have been fleeced before — Kaysen stresses the need to move quickly. "If a resident were to report the condition to 311 and a city inspector found mold, the condo association would receive a violation and be ordered to clean it up. If a unit owner was responsible for conditions that caused the mold to grow, the board could pass the costs onto the resident, but the board still has to do the work," she explains. Kaysen follows up the cautionary statement with some sound advice: "Consider hiring an industrial hygiene consultant to determine the scope of the problem. To avoid a conflict of interest, select a consultant who does not also do remediation." 

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As in a cooperative or a condominium, membership in a homeowner's association (HOA) means there are rules, eliminating the risk that a next-door neighbor might decide to paint his home bright magenta or that another neighbor could create a public spectacle with elaborate year-round lawn ornaments. How those rules are applied — and whether they can be applied at all — is the question in Jasinski v. Hudson Pointe Homeowners Association.

Peter and Margaret Jasinski owned a home in the Hudson Pointe Homeowners Association in Queensbury, New York. They had placed a political sign by the road that bordered their home. The HOA objected and fined the Jasinskis for their display, alleging that the sign broke an HOA rule prohibiting the public portrayal of "advertisements and other signs." When the Jasinskis did not pay, the HOA filed a lien against their home. But there were complications. 

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Don’t mention this to the kids but sometimes it does pay to watch television. As Peter Goldfinger — board president at Contello Towers 2 in the Gravesend section of Brooklyn — recalls, it was through TV commercials that residents were alerted about a way for their building to save money on heating bills.

Those TV ads – for subsidized heating oil from CITGO and Boston-based Citizens Energy — set off a chain reaction: shareholders informed the board, the board informed building management, and building management looked into the grant program.

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An inevitable consequence of all these new apartment towers rising across the Five Boroughs is that some neighborhood icons become collateral damage. Locals in Long Island City worried that the Queens Clock Tower was doomed, especially as "Queens Plaza undergoes rapid development — including a plan to build a 70-story apartment tower, the borough's tallest, right next door" to the beloved structure, DNAinfo reported. Today, their efforts to preserve the building paid off: "The city's Landmarks Preservation Commission [LPC] voted unanimously to landmark the former Bank of Manhattan building in Queens Plaza." The clock tower has been part of Long Island City's landscape and skyline for nearly a century. Built in 1927, the former bank building at 29-27 41st Avenue was "known at the time as 'the first skyscraper in Queens' and was honored by the Queens Chamber of Commerce as the borough’s best business building, according to the LPC." Sometimes the good guys really do win.

Photo by Jim.henderson (Own work) [CC BY 3.0], via Wikimedia Commons

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Last week, we took a look at how to prepare a bid request — or request for proposal — so your board can nab the best contractor for the best price. In this second of a multi-part series we will be taking a look at the bid proposals that come back from the companies you reach out to. Your architect or engineer will almost certainly include two things in the bid-proposal package: a "schedule of values" — a line-item breakdown of each phase of the work, for which the vendor will bid a price — and a "unit-price schedule" — the cost per unit of materials.

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A cursory scroll down our home page gives you but a glimpse of all the new buildings being constructed in New York. It's undeniable that we've seen a construction boom, with co-ops and condos rising all over Manhattan, particularly luxury towers. But despite all the new apartments available for the taking, Crain's reports that there's a record shortage of homes on the market in Manhattan — and it's the luxury market that's helping to skew the numbers: "Unlike the last construction peak, in 2008, when developers generated more supply to meet demand, a number of factors have converged to warp the economics of owning and selling a home in Manhattan — and in the rest of the boroughs — making it more expensive for businesses to retain the highly skilled workers who can keep the city's economic engine humming." According to the article, of the 850,000 apartments in Manhattan, only "5,200 were available for sale in the first quarter of 2015. That's 26 percent below the historical average and just 25 percent above the low of 4,164 in 2013." Fueling these dismal results is the fact that, like it or not, co-ops and condos together make up just 25 percent of available apartments in Manhattan. The rest are rentals. With resale inventory stagnating, potential sellers are skittish about putting their own homes up for sale. Who can blame them? "Because there are so few listings, sellers are nervous that they won't be able to find another home. Even if they do, those apartments one step up will be pricier as well. As a result, they're holding on to their apartments, further subtracting from the potential number of listings," the article explains. And that vicious circle is going to keep pressure on those prices.

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At Neptune Towers, a 152-unit co-op in Long Beach, the emergency generator failed in the midst of Superstorm Sandy. The generator had been there since the property was built in 1968, and "it was due for a replacement," recalls manager John Wolf, president of Alexander Wolf & Company.

"During Superstorm Sandy, it ran for five or six hours and then the engine ceased," says board president Rich Louis. The co-op had faced "age-related" problems in the past, he adds, involving the replacement of harder-to-find parts, "so we were at the point where we knew we had to replace it." The board hired an engineer to analyze the situation and present it with options. 

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A READER ASKS: I live in a midsize co-op in Brooklyn, and have been on the board for nearly ten years. I've been keeping up with all this Airbnb business, and it's made me really think about our building's security. We don't have a written policy about security — or privacy, for that matter. One of my fellow board members says that having a written policy relating to security and privacy may paint us into a corner, that once we have a written policy, we have to substantially comply with it. I say that that's what our lawyer is for, so we can craft a policy that protects the building. My fellow board member adds that we need to define clearly in that policy who has access to information — that is, clear definitions of who can access security data and what privacy rights residents can reasonably expect. What factors might we keep in mind while drafting something that makes everyone happy? 

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We've been hearing for some time that Brooklyn is getting ridiculously expensive — Manhattan-levels of expensive. Just a month ago, Brickunderground reported that the price difference between Brooklyn and Manhattan is shrinking, while we remembered days of old, when people who couldn't afford to live in the Big City had to settle for the consolation prize: a decent apartment in Brooklyn. Well, it's starting. People in Brooklyn are getting priced out and moving to… Manhattan. Who'd have thunk it? The New York Times reported that "five years ago, Eric Kabakoff and Christina Lewandowski bought a one-bedroom in a new condominium in Gowanus, Brooklyn, with the idea of moving to a two-bedroom in the same building after a while." After being outbid on two apartments there, "the couple realized their $750,000 budget was not going to be enough." Gosh, that's not even an entire million. In a case of "go figure," they found places in their (rather ample to many of us) budget in Manhattan, and settled for their consolation prize: a two-bedroom co-op a block from Central Park in Carnegie Hill on the Upper East Side. A block from the park. On the Upper East Side. Let that sink in, because when prices in Brooklyn get so high that a place a block from Central Park on the Upper East Side is a bargain, you know we're done for.

Photo by Rik Lee

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