New York's Cooperative and Condominium Community

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The Business Judgment Rule and an Unreasonable Board

Written by Richard Siegler and Dale J. Degenshein on January 12, 2015

New York City

Some proprietary leases have provisions stating that when a shareholder has died, the apartment can be assigned to a member of the family who is financially responsible, and when considering such an assignment, the board "shall not unreasonably withhold" its consent.

But what does that really mean? And how much input can a court have into the board's determination under such a standard? 

The issue was addressed in Estate of Helen Del Terzo, Michael Del Terzo and Julius Robert Del Terzo v. 33 Fifth Avenue Owners Corp.

Ask the Engineer: How Do We Fix the Garage Without Losing Revenue and Our Tempers

Written by Stephen Varone and Peter Varsalona on January 13, 2015

New York City

A READER ASKS: I'm on the newly elected board of a 29-story co-op with a two-story below-grade parking garage. The garage has been in disrepair for years. There's cracked concrete with missing chunks and possible structural damage, leaks, and puddles throughout. We would like to undertake a much-needed repair program, but we on the board and the garage operator are concerned about the loss of revenue from closing the garage for a long period of time. In addition, residents who park their cars in the garage, which has 190 spots, are worried they won't be able to access them when they need to. What's the best way to do the work with minimum inconvenience?

A READER ASKS: I live in a co-op located in a historic district in Brooklyn. The building still has the original terracotta cornice, but at more than 100 years old, it has steadily deteriorated. Over the past few years, we’ve patched the particularly bad spots, but it's not really cutting it anymore. It looks like we have to replace some sections of it, if not the entire thing. Ideally, we'd like to replace it with terracotta and maintain the cornice’s decorative features as much as possible, but the costs may be beyond our budget. We've since found out that although there are replacement materials available, we may be limited to what types we can use because we're in a historic district. What are our options for a cornice replacement that meet the Landmarks Preservation Commission’s approval yet are still relatively affordable?

When's the last time you reviewed your building's pet policy? Co-ops and condo boards, take note, because wherever you fall on the great ferret debate, you may need to do some revising soon. On January 21, there will be a public hearing on the proposal to lift the ban on ferrets in New York City before the Board of Health. So what's the deal with ferrets? Well, we have to delve in a bit of New York City history for this one. About ten years ago or so, says The New York Times, Rudolph W. Giuliani instituted a ban on ferrets, and totally flipped his lid about them on a radio show wherein he not only confused ferrets with weasels (they are similar, to be fair) but also told a "ferret enthusiast" he was "deranged." Ferrets, explains the Times, are legal in the rest of New York State, not to mention other areas in the country. Fast forward to last spring and Mayor Bill de Blasio's administration — it has "proposed removing ferrets from the city's banned-pet list, a zoological rogues' gallery that also includes rhinoceroses, bats and poisonous centipedes." Consider that even if you don't think they're pretty adorable, ferrets are small and quiet — certainly quieter than dogs. At an average of two pounds, these little guys fall somewhere between house cat and old dog, sleeping for about 18 hours a day, according to one ferret owner who talked to the Times about why they make such ideal pets in the city. As for ferret owners being a little bit nuts, well, it's not like they are trying to keep pet rhinos.

It’s rarely easy to pass a bylaw revision in a cooperative, but it can be twice as harder in a condominium.

Why? Well, first, all of the condo's board members have to agree on the need for change. Then they have to get the unit-owners to agree. And if that weren't enough of a challenge, condo boards have to garner a supermajority in support of the revisions, either at a special meeting or an annual one.

If you see dead people, try to get them to pay. It's a fruitless task. "Dead men tell no tales," goes the pirate mantra, and, as boards have discovered, they don't pay bills, either. That could be a problem, especially if the case goes to probate court.

This particular difficulty starts when residents die, leaving no direct heirs. Cooperative and condominium boards find they are no longer dealing with a neighbor but with a byzantine judicial system.

The estates have been passed on to the courts and the judges who run them. This can tie up money needed to pay maintenance and usage fees, which could end up — as the months it takes to settle the estate drag on — placing previously solvent units in arrears.

Why should that make you worry? 

A fire escape is a critical part of a building's emergency plans. You hope you never have to use it; but if you do, it needs to be ready and reliable. When's the last time you took a look at yours?

A fire escape is exposed to the elements. Because it is typically made of metal, it rusts and deteriorates. That's why it's important to develop a maintenance game plan to keep it in good, safe working order. You want to avoid replacing the whole kit and caboodle.

However, if your fire escape is starting to look dilapidated, it's time to bring in an engineer to assess whether it's structurally sound.

Speaking of condos, they may be heading to Greenpoint in the nearish future. Brownstowner reports that the New Warsaw Bakery Company, located at 585 Manhattan Avenue, has sold for $8.7 million. Although no demolition permits have been filed for the two-story brick building, "plans call for a seven-story, 14-unit building with two towers." Brownstowner guesses it may be condos. Although this is more good news to potential condo buyers, it's a little sad to that it's at the cost of losing "a piece of Polish Greenpoint" — indeed, part of what makes the neighborhood so charming in the first place. But you know what they say. Location, location, location — and it's little wonder that Chatham Development Company snapped up the 10,000-square-foot piece of prime real estate that stretches all the way through to Lorimer Street between Nassau and Driggs avenues. 

Even if you've never had bedbugs, you know how difficult they are to eradicate. Never mind the stigma of having rats in a building, having bedbugs is downright mortifying. Even if you successfully get rid of them, the horrible little bloodsuckers haunt you — if not for life, then certainly for a long, long time. After all, the experts all caution you that they can lie dormant for up to a year, that they can survive even in something as inhospitable as a printer or an air conditioner… What if, when you were told to pack all your things to protect them from fumigation, you inadvertently packed away a survivor? Itching yet? Well, there's hope in the horizon, thanks to Simon Fraser University biologist Regine Gries, who endured 18,000 bedbug bites in five years for science. According to an article on Business Insider, Gries and her husband, Gerhard, teamed up with chemist Robert Britton, also of Simon Fraser to try to find the secret to trapping them. "Like humans and other animals, bedbugs produce and detect distinct smells… [and] use these odors to communicate." Recreate the scent, and GOTCHA! Business Insider reports that the key ingredient in this bedbug perfume, if you will, is histamine, "which could freeze the bedbugs in their tracks … the same chemical produced by our white blood cells as part of our immune response." The trio is still working on their solution, so we have to wait a little more yet. But isn't that something? Science: It works.  

Paul Vercesi has been living in his apartment on Gramercy Park for more than half a century and is now president of the co-op’s board of directors. After all those years, he thought that he knew everything there was to know about the 81-unit post-war building and its systems. Then one day he got a watery surprise.

A doctor who used a ground-floor apartment as his office decided to move out. When the new shareholder started renovating the space, she discovered an outmoded water-cooled air conditioner inside a closet. 

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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

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