NEW YORK CITY

Assessments have been the traditional vehicle for condominiums to raise money for repairs and capital improvements. However, assessments have a couple of drawbacks. First, they usually take a fair amount of time to collect since most unit-owners don’t have a lot of idle cash available. Second, most assessments place the entire financial burden of capital improvements on current unit-owners instead of spreading it over the useful lives of those improvements.

Borrowing tends to be a much more equitable way to fund such expenditures because the interest cost and principal repayment occurs over an extended period of time, more in line with the likely lifespan of the building components being repaired or replaced.

Maybe a combination of the two would be best for your building.

During January, Habitat Weekly will advise boards on how to deal with a quartet of natural-born killers. This week: carbon monoxide.

Carbon monoxide can kill. It's a nasty, insidious killer, too, sending you into slumberland before it takes you down.

Carbon monoxide, or CO, is produced through "incomplete combustion," which occurs when a flame doesn't have room to breathe. Odorless, colorless, and tasteless, CO exists in devices that burn fossil fuels, such as oil burners, furnaces, water heaters, fireplaces, and parked cars. If you develop headaches or dizziness, or become tired, and nauseous you may have CO poisoning. The best remedy is to open all windows, get out of the house, and call the fire department.

But the best way to deal with it is to stop it in its tracks.

It’s one of the worst feelings a co-op or condo board member will ever experience: You have good reason to believe that a fellow board member is taking kickbacks from a vendor or contractor. Before you start pointing fingers – or going to the authorities, or filing a lawsuit – keep in mind that there are right ways and wrong ways to tackle this devilishly ticklish situation.

Other than tattoos, nothing is forever. The long list of perishables includes last year’s fashions, Downton Abbey and your co-op’s bylaws.

Experienced real estate lawyers advise boards to update their bylaws at least once every 10 years – in order to keep abreast of the ever-evolving Business Corporation Law, which governs co-ops. Periodic bylaw updates will improve the quality of life in your building and, in the bargain, protect you from lawsuits. Best of all, it’s not terribly time-consuming or expensive.

Here’s a sticky one: a member of your co-op board is a real estate lawyer who has agreed to represent a fellow shareholder in the sale of his apartment in the building.

“These responsibilities conflict,” Marc Luxemburg, a real estate lawyer with the firm Gallet Dreyer & Berkey, tells Ask Real Estate in the New York Times.

Suppose the board decided to reject a potential buyer, a situation that would clearly go against the interest of the lawyer’s client. The lawyer would have to recuse himself from participating on behalf of either side – the seller or the board – if a dispute were to arise, says Luxemburg. And since this is New York City real estate, disputes are a virtual certainty.

As a rule, lawyers who sit on boards should not represent buyers or sellers in the building, Luxemburg advises. At the very least, it gives the impression that the lawyer is using his position to further his career.

Smart co-op boards establish and distribute a list of “courtesy repairs” – minor work the co-op agrees to pay for even though there might be some question as to who is responsible for the repairs. The super and all shareholders should get a copy of the list to avoid confusion when it comes time to perform and pay for these minor repairs, says Ask Real Estate in the New York Times.

Shareholders are generally responsible for making repairs within the walls of their apartment, while the co-op is responsible for repairs to the building itself. There are gray areas. While your shower is inside your apartment, the drain runs into the building’s wall and down to the sewer. If the drain becomes clogged, the co-op is responsible for unclogging it – unless your negligence caused the clogging, says real estate lawyer Peter Livingston of the firm Rosen Livingston & Cholst.

Unclogging a shower drain is prime candidate for your building’s courtesy list – a repair the super will make at no cost to the shareholder.

Many New York cooperatives – and even some condominiums – have found that a flip tax, or transfer fee, is a reliable and relatively painless way to ensure the long-term financial health of the building. By keeping a small percentage of every apartment’s sale price – usually 1 or 2 percent – and adding it to the reserve fund, many boards are able meet expenses without imposing assessments, or increasing monthly maintenance or common charges.

But if your building doesn’t already have a flip tax in place and your board is thinking about establishing one, you need to get ready for one tough selling job.

Opinion remains divided on the likely fallout of Wednesday’s announcement by the U.S. Treasury Department that it will begin requiring the names of people who make cash purchases of luxury Manhattan real estate through shell companies, a campaign to crack down the laundering of dirty money. Some New York real estate insiders yawned at the announcement, while others shivered and one called it a “witch hunt.”

Aaron Shmulewitz, a real estate lawyer with Belkin Burden Wenig & Goldsmith, told Habitat: “The newly announced test regulations are likely to have an immediate adverse impact on Manhattan real estate, although probably not as severe as feared. While some foreign buyers who want to ‘park cash’ in luxury Manhattan apartments will be leery of doing so, sophisticated, well-advised foreign buyers will still be able to find ways around the disclosure requirements.
 
“However,” he added, “if these regulations stay in place...their long term impact will actually hurt City and State governments – and their citizens – who have grown dependent on the healthy money flow. Foreign investors who want to park cash will find other parking spots for it, in other countries. Killing a golden goose, anyone?”

Michael Graves, a broker with Douglas Elliman, tells The Read Deal that the bulk of his deals above $8 million are all-cash transactions through limited liability companies – the very deals the feds are targeting.

“The vast majority of these transactions are simply people who want to protect their identities for the safety of themselves and their family,” Graves said. “By and large, the feds will find it’s a witch hunt.”

We all have second thoughts from time to time. But if your co-op or condo board holds a formal vote on an issue and then one or more board members have a change of heart, there are right ways and wrong ways to go about changing the original vote.

Let’s suppose a board has voted, 5-2, to hire Zenith Management Co. But after the meeting, the board president, who voted with the majority, decides the board should have hired Acme Management instead. He approaches another board member who voted with the majority and persuades him to change his vote. Now the vote is 4-3 in favor of Acme Management.

In fact, nothing has changed – yet.

During January, Habitat Weekly will advise boards on how to deal with a quartet of natural-born killers. This week: asbestos.

It's a busy time in your co-op. The couple in apartment 4B is knocking out a wall to open up their kitchen. Meanwhile, crews are replacing the floor tiles in all of your prewar building's hallways. And finally, your boiler is being removed. Warning bell time: your co-op or condo board should be prepared for the possibility that such demolition and renovation projects could unleash lethal asbestos, both inside apartments and in common areas. Failure to do so can lead to any number of unhappy endings, including sickness, lawsuits, even death.

If ever there was a time to be prepared, this is it.