New York's Cooperative and Condominium Community

Habitat Magazine Insider Guide



Rising insurance rates might be unavoidable, but there are steps condo and co-op boards can take to keep control of runaway rates and prepare for the unavoidable increases. Here are three simple steps every building should contemplate.

A bill has been introduced in New York's City Council that would substantially impair a co-op board's rights to approve prospective apartment purchasers. 

On very short notice, a hearing on the bill — Int. No. 188 — has been scheduled for Tuesday, April 30, at 1 p.m. We understand that the bill is being strongly supported by the real estate broker community. However, we recommend and encourage you and your fellow co-op board members and managers to promptly reach out to your City Council representatives and express your views in opposition to the bill.

Portions of the New York State Labor Law were enacted to protect workers injured on construction projects. They allow an injured worker to sue the owner and general contractor even if they did not cause the accident. (One part of it is Labor Law 240, colloquially called "Scaffold Law.")

Under the provisions of Labor Law 240, if a worker injures himself in a fall the cooperative (but not the shareholder) may face liability for a claim. Accordingly, all construction projects at co-ops should anticipate a personal injury lawsuit and devise a plan. Proper planning involves adequate insurance coverage and indemnity agreements. These obligations should be set forth in the contracts entered into with the contractors, and in the alteration agreement.

Most co-op boards know about Labor Law 240 in the context of renovations on buildings. This is the law that makes owners, contractors and their agents liable for injuries to workers who fall from a height. It is also known as the "Scaffold Law." However, falling from a height can include a wide range of causes. It can include when a worker stands on a box to install a light fixture and falls. Most shareholders would be surprised to learn that it can also apply in some instances to renovations in their apartments.

Leaks are not a minor issue in New York City. In 2010, field crews for the New York City Department of Environmental Protection responded to 4,403 total leak complaints citywide, nearly 80 percent of which were deemed to be private service lines. In response, the DEP and the private company American Water Resources (AWR) recently launched of the Water and Sewer Service Line Protection Program for smaller residential properties throughout the city.

One piece of the insurance puzzle that hit many co-op and condominium boards hard in the aftermath of superstorm Sandy was business interruption coverage. Some residents balked at the idea of paying maintenance fees while their building was rendered uninhabitable. In some cases, insurance policies covered maintenance fees for the displaced residents. In other cases, the policies provided no such relief.

To try to avoid unethical behavior by co-op and condominium board members, attorney Steve Wagner, a partner at Porzio Bromberg & Newman, suggests the board create and make members aware of its code of conduct or code of ethics. This includes a series of ethical promises: no kickbacks, full disclosure of any connection with the vendors, no self-dealing, and so on.

Condominium and co-op boards can require residents to carry homeowners insurance. In two earlier articles, we looked at reasons for that and at ways to help enforce that requirement. So exactly what type of homeowners insurance should they carry? There are different types, and a unit-owner or shareholder buying the wrong kind won't have all the coverage he or she might expect — and if a severe issue hits, then the board may well find itself drawn in to patch up problems and then sue to recover the damages. And that's never fun.

Many co-op and condo boards require its shareholders or unit-owners to carry homeowner insurance. It makes for a smoother-running building by, for instance, not having to have the building pay for repairs when an uninsured resident damages a common area, and then having sue the resident to recoup the outlay. Or if a contractor hired by an uninsured resident hurts himself due to the resident's negligence, leading the contractor to sue the building. So, yeah, lots of scenarios you could think of make it good to have your homeowners be insured. But enforcing that requirement? Good luck. Fortunately, there are ways to help you do that.

Ask the Experts

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Learn all the basics of NYC co-op and condo management, with straight talk from heavy hitters in the field of co-op or condo apartments

Professionals in some of the key fields of co-op and condo board governance and building management answer common questions in their areas of expertise

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