LEGAL/FINANCIAL

We've looked at the evolution of property management companies. As times change and needs grow, so do companies — by merging and pooling their resources together. For smaller companies, such as Gerard J. Picaso Inc., joining forces with a larger one makes good sense.

But is bigger necessarily better?

No, says Peter von Simson, CEO of midsize New Bedford Management. 

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What happens when a developer that plans to build a high-rise condo needs access to the neighboring condo to do prep work and is refused entry? They sue, of course. DNAinfo reports that developer Erik Ekstein needs to "demolish the five-story Madison Avenue Baptist Church at 30 E. 31st Street, but the neighboring condo building, M127, has refused to let workers inside." The developer filed a lawsuit on January 13 in New York Supreme Court against M127 for delaying work. According to the report, M127's managing board denied the developer access to its roof, side yard, and backyard so it can install temporary crack and vibration monitors and waterproofing, along with scaffolding. DNAinfo adds that a member of M127's managing board declined to comment. It's, therefore, not clear what motivated the board to refuse the developer access to its building, but it's potentially made a costly mistake. A lawsuit means time and money wasted. Existing condo (and co-op) boards should take note and not make the same mistake. It's only a matter of time before a developer begins building a new condo right next door — especially given all the construction anticipated this year.  

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What happens when a co-op or condo resident dies, leaving no heirs? Well, for starters, it can leave cooperative and condominium boards in the lurch. We're talking estates that get passed on to the courts and the judges who run them. And if money needed to pay maintenance and usage fees get tied up, solvent units end up in arrears.

So how can boards protect themselves? 

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A condo in Williamsburg, Brooklyn, has instituted a policy that requires buyers to pay $1,500 capital contribution charge. According to one of the condo's unit owners, "the bylaws do not give the board authority to require a capital contribution in this situation. In my view, it is essentially a flip tax." What if future boards decide to increase the fee? Is there a way to nip this in the bud? The unit owner reaches out to Ronda Kaysen in the latest "Ask Real Estate" column in The New York Times for some advice. Kaysen explains that the bylaws must give the board explicit permission to collect a capital contribution such as this $1,500 charge. If not, "then the board has certainly overstepped its boundaries" and essentially amended its bylaws — which it can only do if two-thirds of the unit owners vote in favor. Good news for the concerned unit-owner, right? Wrong. Kaysen adds that "the board could probably enforce the rule without a vote." And what if a buyer doesn't want to pay? Well, then, the board can block the sale. What are the odds you'll go to court over 1,500 bucks?

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Airbnb and its supporters were dealt yet another blow ahead of a City Council hearing on January 20 at City Hall titled, "Short Term Rentals: Stimulating the Economy or Destabilizing Neighborhoods." New York City Council Fire and Criminal Justice Services Committee Chair Elizabeth Crowley has asked the New York City Fire Department (FDNY) to prioritize the investigation of 311 complaints reporting illegal hotel activity by companies like Airbnb because of the disproportionate public safety threat caused by fire code violations occurring in short-term rentals.

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Some people seem to have all the luck. They spend about a month in New York, and rather than pay for a hotel or stay at an Airbnb accommodation, they buy a co-op. You may be asking yourself, "For a month?!?" Well, if money's no object, who are we to judge? But more money — as in "an extra maintenance fee" — is what one New York co-op wants from a resident who spends most of the year in China and just one month in his co-op apartment. Is the building out of line? After all, it seems unfair to penalize a shareholder with an extra maintenance charge simply because the apartment is not his primary residence. According to Brickunderground.com's Ask the Expert column, it does seem "like an unusual request, since [the shareholder] arguably put less stress on the building’s staff and facilities than full-time residents." But it's legit, explain the Brickunderground.com experts, who all added that they've never seen a provision like this one. "If the building has disclosed this potential fee in either your proprietary lease or your co-op bylaws, it’s legitimate." If it's not in the lease or bylaws, this shareholder may be able to challenge by filing a lawsuit on the grounds that the co-op had no right to impose the fee. Who knows? Maybe with a potential time-consuming and costly lawsuit looming over them, the co-op board may be willing to negotiate.

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Following up on this week's announcement that Governor Andrew Cuomo would be proposing a tax credit to homeowners whose property taxes make up more than 6 percent of their income, a spokesperson for the governor has clarified that yes, co-op and condo owners are included. "Condos and co-ops are included, exactly the same as if you own a home. [They have] a different rate structure, but that doesn't impact the fact that they still pay property taxes," said Morris Peters, a spokesman for the governor's budget office. The property tax credit, which will affect more than 1.3 million homeowners and 1 million renters, will be included in the governor's proposed budget next week. The goal is to aid households whose income is less than $250,000 annually and whose property taxes are at least 6 percent of that income. Outside of New York City, homeowners who fit the financial qualifications will only be eligible if their communities keep their property tax increase under that cap. As far as renters are concerned, the terms to qualify are slightly different: renters must have an income of less than $150,000 and the portion of their rent attributed to property taxes must be more than 6 percent. According the governor's office, "the total taxpayer benefit from this new proposal will reach as high as $1.66 billion on an annual basis" after four years. 

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Mayor Bill De Blasio is serious about affordable housing — which is good news for middle- and working-class folks who feel like they are getting pushed out of the increasingly expensive city. But it looks like the mayor's affordable housing plan has ruffled a few feathers. DNAinfo reports that, according to community advocates, "at least 15 community gardens on city-owned property could be bulldozed to make way for new buildings under the de Blasio administration's affordable housing plan." The affected gardens include nine in Brooklyn and six in Manhattan — they were on the list of city-owned sites published by the Department of Housing Preservation and Development this week "that housing developers can apply to build on." At the end of the day these community gardens sit on HPD-owned land, so it shouldn't — and doesn't — come as a surprise that the city needs its property back. But some residents told DNAinfo that what irks them is that HPD has other vacant lots that don't have gardens planted in them that could be used. In fact, one community garden on Saratoga Avenue found itself on the list, "while a vacant site a block away wasn't."

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Will co-ops and condos be included?

It's a fair question. Earlier this week, as part of his proposed budget, Governor Andrew Cuomo announced a property tax credit that will affect more than 1 million homeowners and 1 million renters — but was worryingly quiet on whether co-op and condo owners would be affected. 

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We're halfway through January, temperatures have dropped, and baby, it's cold outside. It's time to talk about carbon monoxide and Local Law 75.

According to the Centers for Disease Control, most accidental carbon monoxide poisonings happen in January (the second most happen in December). That makes it a good time for co-op and condo boards to remind residents to test their detectors and change the batteries, if need be.

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