New York's Cooperative and Condominium Community

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John W. Toothman, president of Virginia-based firm The Devil's Advocate, which advises housing associations nationwide on ways to lower legal costs, says condo and co-op boards should treat attorneys no differently than how they treat other contractors who are seeking employment: they should be subject to competitive bidding. That doesn't just mean getting a schedule of hourly rates for partners and associates (although that's part of it). You also want to examine the financial arrangements.

We represent a condominium on the Upper East Side of Manhattan. One of its units was unoccupied, with no common charges paid for more than a year and a mortgage that was for more than its market value. 

The first mortgagee — the lender — has a first lien on the unit ahead of the condominium (unlike with co-ops, and something the condo community should strongly lobby to repeal). So, if we were to foreclose the condominium lien for the outstanding common charges, the result would be that after protracted and expensive legal proceedings the lender would receive all of the foreclosure proceeds. That would leave no reimbursement for the condominium of either its arrears or its legal fees.

In a large co-op we represent, a shareholder purchased a penthouse unit and applied for the board's consent to gut-renovate it. All parties were aware that there were sporadic roof leaks into the unit at that time. The co-op board agreed to make repairs prior to the start of construction. The roof was patched and the unit-owner did the renovation. Then the rains came….

In what seemed to be a routine matter for the condominium board, it hired a mason to perform pointing and repairs on a brick façade. The president signed a contract prepared by the managing agent, who in turn secured the contractor’s signature. A deposit was paid to the contractor, and he began work.

Problems began shortly after the start of the project when homeowners complained that the contractor was not cleaning up at the end of the work day and that the sidewalks and walkways were filled with trip hazards. In addition, work progressed at a far slower pace than anticipated; some days the work crew was a single person.

Money is tight. Lawyers are expensive. Can you cut costs without cutting essential services? That's the question condo and co-op boards may be asking as they face the beginning of a new fiscal year. Many boards regard legal charges as a big cost that must be reduced. Yet is such cutting wise?

When superstorm Sandy struck in October, she left co-op and condo buildings scrambling for light, water and heat. Damage control was key, solutions slow. Yet many building managers and condo / co-op boards found creative ways to meet challenges. Here are just two, centering on the critical issues of water and electricity in the aftermath of a disaster.

A 40-year-old cooperative had a 10 percent sublease fee in place for over 30 years. One new shareholder, now subleasing to a high-paying tenant, challenged the propriety of the sublease fee in court. Among other things, he claimed that the cooperative could impose a fee of that size only through an amendment to the proprietary lease, but that the lease had never been amended.

There is no way around it: When a building's elevator breaks down, residents complain. But when that elevator needs to be modernized — a capital project that can take an elevator out of commission for several weeks — a temporary inconvenience turns into a major problem. Co-op and condo boards have to invent creative ways to ease the pain. Some solutions cost money, making an already expensive project even more costly. But these particular ones do not.

So, what steps can a board take to reduce the inconvenience during an elevator upgrade?

If your co-op or condo board hasn't given it thought before, superstorm Sandy brought home the point with hurricane-force winds: Buildings need to have an emergency preparedness plan. It's not just about stocking up on flashlights or buying a generator — it's also about going over documents such as insurance policies so that you know what is and isn't covered, and taking steps to avoid not just physical disaster but financial disaster. Here are three overview steps that condo and co-op boards should consider above and beyond laying in supplies.

The Americans with Disabilities Act Affects Your Building's Retail Spaces

Written by Steven D. Sladkus, Jeffrey M. Schwartz & Jeffrey S. Reich on December 06, 2012

New York City

One cooperative association that we represent owns commercial space on the ground floor of its building, and fell victim to a serial lawsuit brought under Title III of the Americans with Disabilities Act (ADA). Title III of the ADA allows disabled individuals to file lawsuits against co-ops and condominiums, forcing them to alter entrances to their storefronts to make them handicapped-accessible. Though monetary damages are not available under Title III, prevailing plaintiffs are entitled to recover their attorneys' fees. In recent years, a small group of ADA lawyers has capitalized on this by teaming up with a serial ADA plaintiff (one who is unquestionably disabled) and commencing hundreds of lawsuits based on technical or very minor ADA violations.

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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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