Why Do We Need to Submit an Alteration Agreement?

Aug. 13, 2015 — Our broker said we have to submit an alteration agreement to renovate the apartment we want to buy. Why the paperwork? It's obviously a wreck.

Buyers of new, newly renovated, or original apartments have all been bitten by the renovation bug. Renovations are at an all-time high throughout our nearly 25,000-unit portfolio. At Metro Management, we confront this almost daily. The broker was correct to inform the buyers that they will probably have to fill out an alteration agreement and gain board approval. Most co-op leases and many condo governing documents require board approval for renovations. Many owners feel that since they bought their apartments they should be able to renovate at will and often don't understand why they can't just call in a contractor. Although many renovations improve the overall value of the property, when done incorrectly these can have a negative impact on unit-owners and the building.

The alteration agreement sets forth the policy and procedure under which renovations are permitted from the smallest to largest detail. This protects the apartment owner and the building against pitfalls that can accompany renovations. For instance, is the contractor adequately insured? How long will the renovation take? When will the noise stop?

The alteration agreement also stipulates the hours and days work is permitted, and also the penalties for noncompliance with stipulated rules.

One main component of the alteration agreement is a written scope of work. When all information is available, we can present the renovation package to the board, which can then make an informed decision in the best interests of all owners. This results in a faster, more efficient renovation with the least amount of disruption.

David Baron is president of Metro Management Development.