NYC Gyms Re-open September 2d

NYC gyms and fitness centers are permitted to re-open  September 2, 2020, provided they meet the NYC and NYS Department of Health guidelines, which may be found here.

Co-ops Must Do Their Part for the Census!

Julie Menin, Director, NYC Census 2020 and Executive Assistant Corporation Counsel, NYC Law Department reminds us that, “It is critical that all property managers, building workers, as well as co-op and condo boards, grant access to the vetted, trained, and trusted census door-knockers who are out in the streets right now, attempting to count the 1.6 million households that have not yet responded to the census. . . .”

The Census Bureau’s carefully trained and vetted workers who visit households in person to collect census information from those who have not yet submitted by mail or online at https://my2020census.gov/ — must be allowed to enter buildings.

Regrettably this has not always been the case.  Darcey Gertstein addressed this urgent issue in the August 26th issue of The Cooperator.  Read it here.

You can also learn more about the census at https://www1.nyc.gov/site/census/index.page

The Scaffold Law and Building Insurance

. . . What’s happening in the city now more than ever due to . . . antiquated laws called Labor Law 240 and 241, also known as the Scaffold Law – is that companies insuring buildings and contractors have come up with broad exclusions and limitations that are designed to protect them from having to defend and indemnify co-ops, condos, and building owners as additional insureds. There are certain exclusions that exist both on the buildings’ policies and on the policies of contractors doing the work in co-ops and condos. This is because the Scaffold Law holds building owners and general contractors liable for any gravity-related injury to a worker, even if the worker is at fault.  READ MORE.

Co-ops May Want to Consider Refinancing Right Now

With COVID-19 infections and deaths rising to terrifying levels across the nation, it’s a consolation to co-op boards to know that one number has fallen to historic lows. With interest rates now around 3%, a growing number of co-op boards are approaching banks seeking to refinance their underlying mortgages. But if your board is considering joining the stampede, it needs to know that the lending landscape has changed in ways that go far beyond today’s enticing interest rates.

Just published in Habitat magazine is an article entitled, There Has Never Been a Better Time for Co-ops to Refinance that addresses this issue.

Co-ops & Condos Have Responsibility with Regard to their Employees

As we should all be aware by this time, there are a wide variety of rules and regulations that govern our day-to-day co-op and condo operations while we struggle to meet the challenges posed by COVID-19.

The Equal Employment Opportunity Commission (“EEOC”), the federal agency which enforces certain federal workplace anti-discrimination laws, including the Americans with Disabilities Act (“ADA”), recently provided employers with guidance to help navigate employee return-to-work issues during the COVID-19 pandemic. The laws, regulations and governmental guidance have been in flux and will continue to adapt to the developing circumstance.

As such, ARC is pleased to remind you of certain important aspects of the return to work process in the face of the coronavirus.

• Under New York State’s requirements and recommendations for reopening, all businesses must implement mandatory daily health screenings of employees.
• New York State requires employers to screen employees on a daily basis before employees enter the workplace by having the employee complete a questionnaire that asks, at a minimum, whether the employee has
  • knowingly been in close or in proximate contact in the past 14 days with anyone who has tested positive for COVID-19 or who has or had symptoms of COVID-19;
  • tested positive for COVID-19 in the past 14 days; and/or
  • experienced any symptoms of COVID-19 in the past 14 days.
• All New York State businesses must screen employees and maintain a record that they have completed the screening each day.
• If an employer is performing temperature checks, the employer is prohibited from keeping records of employee health data (e.g. temperature data).
• All information collected during the screening process, including positive test results or employees’ statements indicating that they suspect they have the virus, must be kept confidential under the ADA, State and City laws
• During this pandemic, the ADA allows employers to ask employees if they are experiencing symptoms of COVID-19.
  • Employers should only ask employees about symptoms recognized by the CDC and NYSDOH.
  • The screening should be done in a confidential setting or over a confidential medium, and all information obtained as a result of the screening must be treated as a confidential medical record in compliance with the ADA.
• If an employer is having employees fill out the survey on paper before starting their shifts on-site, NYC Health prohibits the surveys from identifying the employees by name.
• But, New York State’s reopening guidance requires an employer to immediately notify the local health department of a positive test result in the workplace to facilitate contact tracing. As such, the employee’s name must be disclosed.

The Association of Riverdale Cooperatives & Condominiums is grateful for the guidance for this article provided by

attorney Robert Sparer of the firm, Clifton Budd & DeMaria, LLP .

Virtual Shareholder Meetings

One of the many new challenges facing co-op and condo boards during the time of COVID-19 is the issue of continuing lines of communication and maintaining legal responsibilities usually addressed via public (in person) meetings.  On June 29, 2020 the law firm Armstrong Teasdale published some valuable advice regarding virtual meetings in co-ops and condos in its article entitled:  Holding a Virtual Shareholder Meeting in New York

NY Co-ops Might Still Be Able to Collect Legal Fees

Frustrated after commencing numerous eviction proceedings against a shareholder who repeatedly falls into arrears?  Under the provisions of the Housing Stability and Tenant Protection Act of 2019, attempting to collect legal fees during eviction proceedings has become difficult if not impossible.  But, there may be a way to deal with nuisance residents who like to play the “catch me if you can” game.

An article published in Habitat magazine explains how co-ops may be able to collect arrears and legal fees.  Read the article by attorney Marc Schneider of the law firm Schneider Buchel.

COVID-19 Phase Two Re-opening Guidelines

As we continue to recover from the insidious COVID-19 pandemic, New York has instituted a phasing-in process for us all to return gradually and sensibly to our normal activities, as the medical and scientific information may dictate.  As described by the Governor of the State of New York, the process embraces guidance for all industries and social activities, and applies in many specific ways to all businesses engaged in real estate and commercial building activities.

It is strongly recommended that each Board of Directors should consult carefully with its building manager and building attorney to review every detail of this guidance in order to ensure the health and safety of all residents, employees and visitors to each building.  ALSO, IT IS IMPORTANT TO UNDERSTAND AS YOU READ THE (unabridged) GUIDELINES THAT THEY ARE WRITTEN FOR THE ENTIRE INDUSTRY AND PORTIONS MAY CERTAINLY NOT APPLY TO ALL BUILDINGS.

On June 8, 2020, New York City entered into Phase One of New York State’s four-phase reopening plan, known as “NY Forward”, which has published industry-specific guidance for businesses explaining the mandatory requirements related to COVID-19 that businesses must implement as well as its recommendations for safe operations.

On June 22, 2020 New York City entered Phase Two of NY Forward.  The Phase Two guidelines provide requirements and recommendations in a variety of areas, which include: physical distancing, personal protective equipment, hygiene and cleaning, employee communication, screening and testing, tracing and tracking, and safety plans.  Knowing the specifics of the guidance, and appreciating the vital importance of each of its many aspects is crucial to the preservation of health and safety, and should be taken very seriously by every Board of Directors.

We are grateful to attorney Robert Sparer, Esq. of the law firm Clifton Barr Demaria, LLP for providing  GUIDANCE FOR RE-OPENING IN PHASE TWO which can be found in its entirety here.

Co-ops Supported in Washington

The recently enacted Coronavirus Aid, Relief and Economic Security and the Paycheck Protection Program acts that were designed to provide some financial support to those battling the COVID-19 pandemic did not specifically include co-ops and condos, and so many of our local residents in need were, by default, excluded from the resources they should have been due.

The Association of Riverdale Cooperatives & Condominiums, along with other similar organizations, has been steadfast in its mission to correct this wrong.

Many of our elected officials have singly, or in group, accepted the challenge we posed and have brought the issue to those in power in the Administration.  Congressman Eliot Engel was the first to accept the torch from ARC and carry it forward into the halls of Congress.  Engel’s May 4, 2020 letter to Members of Congress can be found here.

ARC’s reaction to Engel’s support can be found in a Letter to the Editor published in the Riverdale Press, which can be found here.

On May 22, 2020, New York Senator Charles Schumer broadcast his support of co-ops and announced his sponsorship of a new bill that would specifically make them eligible to receive support through the Paycheck Protection Plan (PPP).  As published in Habitat magazine, Schumer’s announcement can be found here.

The plight of co-op housing, currently excluded from provisions enabling proper federal funding, was brought to the attention of Treasury Secretary Mnuchin and SBA Adminstrator Carranza by the entire New York City Congressional delegation on May 26, 2020.  The letter from the New York City delegation can be found here.

On June 1, 2020, Treasury Secretary Mnuchin and SBA Adminstrator Carranza were again petitioned, this time by ARC as part of a consortium of organizations representing co-ops around the country.  The letter from the National Cooperative Business Association can be found here.

Elected Officials in D. C. Advocate for Co-ops

Almost immediately upon the passage of the Payroll Protection Program, co-ops and condos were faced with the all-too-familiar problem of ambiguity in legislation.  Were co-ops and condos meant to be included in the PPP or were they not?  Some housing corporations were able to acquire some assistance provided by the program, while most did not.

Over time, our legislative representatives heard from ARC and many others representing co-ops and condos throughout the City of New York asking for clarification and specific inclusion in the government relief plan.

In response to our concerns, many of New York City’s elected officials have appealed to the Administration in Washington D. C. for relief for co-ops and condos.  Their joint letter can be found in its entirety here.

COVID-19 and New Building Protocols for Co-ops & Condos

As we slowly begin to recover from the COVID-19 menace, boards of directors are faced with the challenge of remodeling the way that residents enjoy their buildings.

We are grateful to the law firm of Armstrong Teasdale for putting together an excellent set of guidelines that boards can use, at their discretion, in order to model new building protocols.

The Armstrong Teasdale publication begins, “As New York begins to transition from a nearly complete lockdown to less stringent rules, each condominium and cooperative Board should consider compiling protocols to preserve good health and order in their buildings”. 

“Under all circumstances, Boards should comply with law and any Executive Orders in place”.

“But, every Board should recognize that even if governmental agencies allow certain activities to resume, the Board does not have to allow the activity immediately. Each Board must take the actions they believe best serve their residents within their authority as a Board”.

You can read the entire, comprehensive set of recommended protocols here.

Virtual Annual Meetings during COVID-19

Recognizing that even as we individually face the unprecedented challenges posed by the COVID-19 pandemic, many of us have accepted responsibilities as members of boards of directors that we must continue to fulfill.

Annual Meetings and elections are a regular way of life for co-operatives and condominiums, and the current restrictions on large gatherings of people obviously prohibit adhering to normal protocols.

Some boards are exercising their right to postpone meetings.  Others are venturing into the world of virtual meetings and elections.  A broad “how-to” discussion about holding these functions is presented in a recently published article in Habitat Weekly.  

Buying & Selling Co-ops and Condos during COVID-19

“Among those watching the markets and trying to keep transactions moving while protecting themselves against infection are buyers, sellers, brokers, banks, appraisers, and other parties crucial to the processing of mortgages for co-op and condo units. They’re all navigating a profoundly altered landscape without much of a roadmap”.  Read more in an article published in The Cooperator.

‘Tis the (COVID-19) Season for Annual Elections

At this moment we all are focused primarily on trying to survive the insidious coronavirus, even as we are aware of our obligations as elected directors of co-operative and condominium residences.

Annual elections to boards of directors are often held in May and June; and hence, questions currently abound regarding what to do about mandated and previously calendared annual meetings and elections in each individual building while we are under the Executive Orders that restrict public gatherings.

During the COVID-19 pandemic the following guidelines may be helpful:

• Annual meetings may be delayed, despite any fixed date in the by-laws for a meeting.
• The Board may either amend the by-laws, or decide to notify shareholders that the meeting will be delayed due to current health-related conditions.
• The Business Corporation Law allows an annual meeting to be held by reasonable means, which may include audio webcast or other broadcast of the meeting and voting may be conducted electronically via internet voting.
• Each building’s by-laws should be reviewed to determine the best method for postponing the annual meeting or holding it via electronic means.
• (Note that if a meeting is not held within 13 months of the previous annual meeting, a shareholder has the right to petition a court to order a meeting. The reality is that such proceeding would take many months before an order was obtained, given the current status of the court system, so it is an unlikely remedy to be followed).

PPP Update

Once they received information about certain government COVID-19 relief programs, some co-ops and condos were quick to apply for the support that was offered.  Others believed they were not qualified and so they did not apply.  As we have become increasingly aware, our legislatures often fail to recognize co-ops and condos, one way or another (think: FEMA after Hurricane Sandy or the recent Housing Stability and Protection Act, as examples).  And so we often find ourselves in grey areas where we are not specifically included and nor are we excluded from new regulation or support.

Recently we have heard of cases of attorneys and banks that say co-ops and condos, as employers, are not eligible for Washington’s COVID-19 financial relief.  We also know of at least one bank that is accepting and processing applications from co-ops under the provisions of the federal PPP / SBA provisions.  So, our best advice is to review the qualification details for each program and if your think you qualify, then push forward with the application process – you really have nothing to lose.   No doubt attorneys and courts will ultimately need to hash things out.

In the mean time, we are pleased to offer the following update.

The floodgates on the $349 billion SBA guaranteed, forgivable, loan program slammed shut last Thursday morning (April 16, 2020) when the SBA’s guarantee authorization ran out.

Congress may be about to increase the amount of loans that the SBA is permitted to guarantee, and the U. S. Treasury has already (on April 23, 2020) issued a new guidance which may be found here. Once the authorization is enacted, we anticipate that the SBA will be flooded with hundreds of thousands of loan guarantee requests almost immediately. (There may even be reason to fear that much of the funding may be diverted away from the “small” businesses for which it is nominally intended).  Therefore, we strongly urge those who are eligible for the loans but have not yet received complete approval to be prepared to submit their applications immediately.

There are many misunderstandings regarding the application process, which have quizzically led to people believing that they are much further along than they actually are. Some of the largest banks have accepted applications, but those applications are still being reviewed. Although some banks are sending out polite, “we’re sorry” emails, many banks do not tell applicants whether they are first in line or last in line. In many cases, the bank does not tell you whether it has even completed its own review of your application. If you are in this situation, you should contact your personal banker immediately to determine your status.

You should not accept vague platitudes instead of an honest answer from your bank. If you are unsatisfied with the response from your own banker, you may want to contact your attorney.  Your building’s attorney or perhaps your building manager may be able to help you find an alternate source of the funds if you have an application requesting a loan for only payroll costs that are strictly authorized by the rules (which means, among other things, no 1099 employees and no compensation over $100,000 per person).

Congress is also expected to increase the authorization for the Economic Injury Disaster Loan program, known as the EIDL. If that happens, the SBA should reopen its direct application portal, and you may want to apply for an EIDL loan if you qualify. The loan should be accompanied by a $10,000 EIDL grant that you are not required to repay even if your loan application is not granted. You can find more information from the SBA here.

As always, ARC is deeply appreciative of the professional advice we receive, and specifically recognize and thank Jay L. Hack, Esq. and Marc Luxemburg, Esq. of Gallet Dreyer & Berkey, LLP for the information in this report.

COVID-19 Update for Co-ops & Condos as Employers

New OSHA requirements on COVID-19 cases

Federal Families First Coronavirus Response Act

During these uncertain, dangerous and often maddening times, those of us who have taken on the responsibility of overseeing the safety, management and perpetuity of our co-op and condo corporations are faced with increasing challenges, beyond those that individually impact our families, friends and neighbors — those brand new issues confronting employers.

NYC Provides Relief for Certain Small Businesses Adversely Affected by COVID-19

As we complete the first month of New York State’s PAUSE response to the COVID-19 pandemic, many small businesses, particularly including certain cooperative apartments buildings are now beginning to feel the “pinch” of decreased revenue resulting from laid-off or furloughed residents who are not able to meet their monthly obligations.

Arguably, there are many paths to take when considering the financial obligation of a cooperative corporation while maintaining required fiduciary responsibility. Certainly board treasurers, building managers along with corporate attorneys and accountants should all be part of a corporation’s coordinated response to the current and unprecedented crisis, and they may wish to consider the following:

• The Federal government recently passed the CARES act which may be the source of some relief through the Paycheck Protection Program or from an Economic Injury Disaster Loan.
• Corporate mortgage payment deferrals may be offered by some banks upon appropriate application and qualification during the current crisis.
• Existing board policies may need to be revisited, with late fees and penalties due to just cause considered on a case by case basis.

New York City is offering grants up to $27,000 to businesses with fewer than five employees, and zero interest loans up to $75,000 to businesses with fewer than 100 employees, that have suffered a decrease in revenue of 25% or more due to the COVID-19 pandemic.

• The New York City Employee Retention Grant program provides a grant to certain small businesses to help retain employees.
• The New York City Small Business Continuity Loan Fund provides a zero-interest loan to businesses that have seen a significant decrease in revenues.

Information about these two New York City programs can be found here.

Coronavirus Aid, Relief and Economic Security Act (The CARES Act)

On March 27, 2020 the $2 trillion Coronavirus Aid, Relief and Economic Security Act enacted to confront the devastating effects of the COVID-19 virus global pandemic went into effect. The Act provides immediate and sizable cash and economic relief for citizens, businesses and hard-hit industries. An initial overview of  the Act’s relevant labor, employment and employee benefits provisions may be found here.

COVID-19 Bronx Realty Advisory Board Agreement with SEIU 32BJ

While the COVID-19 continues to ravage the entire human population, those who are responsible for maintaining building operations have become increasingly concerned about the welfare of their employees, while struggling to deliver expected to services to their residents.  An inextricable part of this conversation is the question of labor relations and the impact any disease-related absences and reductions in operational staff will have on co-ops and condos (read: employers).

The Bronx Realty Advisory Board (BRAB) entered into an agreement with the union on March 27, 2020 that will have direct and immediate impact on all 32BJ employees and the buildings that employ them.  The full text of the Memorandum of Agreement can be found here.

Coronavirus in the Workplace — What Co-op & Condo Boards Need to Know

During these difficult times, we are all concerned about our health and safety.  There are also many issues regarding COVID-19 that co-op and condo boards, as employers, must consider beyond their personal safety and the health of their residents.

• How must we respond to an employee who appears ill at work?
• Should boards test their employees for the virus?
• Can an employee refuse to come to work because a resident is quarantined?

Many legal and contractual questions should be reviewed by all boards of directors and building managers.  Find out what you need to know, here.

The S.H.I.E.L.D. law

The application packages that co-ops (and to some degree, condos) require from prospective buyers include a great deal of private information.  Last summer, Governor Cuomo signed into law the Stop Hacks and Improve Electronic Data Security (SHIELD) Act, which requires all businesses and organizations in possession of electronic personal information about any resident of New York State to safeguard that information by March 21, 2020.  You should read more about the implications and requirements of this new law in an article posted in the New York Cooperator.

Who Is In Charge of Your Building’s Money?

By definition, fiduciary responsibility refers to the obligation that one party has in relationship with another to act entirely on the other party’s behalf and best interest.  Read more here: Fiduciary Responsibility.

To protect itself, the Corporation, its physical property and all of its shareholders’ interests, the Board traditionally designates at least one resident-shareholder officer, usually called the Treasurer of the Board, to lead it through its fiscal duties.  Read about the duties and responsibilities of the Board Treasurer here.

New Facade Inspection Rules Take Effect

NYC Property Tax Reform

You may be interested to learn of some of the recommendations recently proposed in the New York City Advisory Commission on Property Tax Reform’s Preliminary Report.  An excerpt follows:

Local Law 11 Changes Will Affect Co-ops and Condos

The city Department of Buildings (DOB) is considering imminent changes to the Facade Inspection and Safety Program (FISP), also known as Local Law 11, which requires owners of buildings taller than six stories to inspect and repair their facades every five years. If approved, the changes are sure to increase the cost of maintaining building facades, beginning as soon as February 2020. But before the DOB approves the changes, it will hold a public hearing at which co-op and condo board members – and any other interested parties – can offer comments . . . .

Read more about the proposed changes and how you can become involved in the process in excerpts from a recent article in Habitat magazine.

Albany Still Not Listening

It’s been about four months since the sweeping Housing Stability and Tenant Protection Law (HSTPL) was passed by the New York state legislature and signed by the governor.

Now that sufficient time has passed to fairly judge its impact, we can pointedly highlight several of the shortcomings in the law and earnestly encourage everyone who lives in a co-operative building to closely consider the effect the law is beginning to have on their financial stability and way of life.  Read more, as published in the Riverdale Press.

Because of the serious financial upheaval that the HSTPL has foisted upon co-ops and their individual shareholders, the Association of Riverdale Cooperatives & Condominiums has taken the extraordinary step of coordinating a petition effort to bring the urgent need to revise or amend the law to the attention of New York State lawmakers .  A copy of the petition can be found here.

While the primary thrust of ARC’s initiative is to show the unified dissatisfaction with the law among co-op boards acting in the name of the buildings they represent,  shareholders and other concerned individuals are welcome to join the effort by signing the petition and ensuring that it arrives in the hands of the Governor and their other elected representatives in Albany before the legislative session begins in January 2020.

The full, original text of the law can be found here.

Reducing Greenhouse Emissions in Your NYC Co-op or Condo

Last year the New York City Council passed Local Law 84, also known as the  NYC Benchmarking Law which requires owners of large buildings to annually measure their energy and water consumption in a process called benchmarking. In general, if a property is subject to that law it is subject to the new Greenhouse Emissions Legislation also known as the Building Emissions law or the Climate Mobilization law, which was amended in April 2019. This law (Intro. No 1253) sets emissions intensity limits (metric tons of CO2e per square foot) — with science and technology-oriented language that can be confusing to many.

Urban Green / Metered New York provides a wealth of easier to understand information, including disaggregated data regarding your specific building. To find your (or any) building’s GHG Emissions, Energy Star score, or water and energy use, you can consult your Metered New York Report Card

Most lofty dreams, including cleaning up our environment often come with equally lofty price tags.  The New York City Council approved the use of  Property Assessed Clean Energy (P.A.C.E.) in NYC which offers financing tools that offer building owners up to 100% funding for energy efficiency and renewable energy projects that can dramatically reduce energy use and utility bills. Click here for information about P.A.C.E.

New Tenant Protection Law Forgot About Co-op Owners

In June 2019 the Governor Cuomo signed the Housing Stability and Tenant Protection Law.  Its stated purpose is to address certain abuses in the rental market, but we believe that the law will potentially, perhaps unintentionally, harm many tenant shareholders.  The new and increased costs, and new prohibitions suggested by the new legislation may ultimately make their apartments unaffordable.  Read more here.

Does the Warranty of Habitability extend to common areas?

As revealed in a recent article published by Habitat magazine, “the warranty of habitability (§ 235-b of the Real Property Law) applies not only to the premises rented, but to ‘all areas used in connection therewith in common with other tenants.’ It provides that all such areas must be fit for human habitation, and are free from ‘dangerous, hazardous, or detrimental’ conditions.  As the article implies, it may be prudent for boards of directors to carefully re-examine areas such as bicycle rooms, playgrounds, laundry rooms and storage areas.  Read the entire article here.

Home Owner Insurance

Should all residents in co-ops and condos be required to carry a level of insurance set by the board and have the managing agent check everyone’s insurance?  Read why Boards Need to Crack Down on Homeowner Insurance and assist residents in obtaining the insurance coverage they need.

New Tenant Protections Likely to Be Felt in Co-ops and Condos

On June 14, Governor Cuomo signed the Housing Stability and Tenant Protection Act of 2019. While this controversial law’s primary focus is the residential rental market, it might also have repercussions in housing cooperatives and, to a lesser extent, condominiums. So co-op and condo boards would do well to familiarize themselves with it.  Read more about the possible impact of the legislation here

Changes in S.T.A.R.

Changes in the S.T.A.R. (School Tax Relief) program which provides eligible homeowners in New York State with relief on their property taxes could bring now you more savings.

According to the NYS Department of Taxation and Finance, “due to recent changes in the law, beginning this year, the income limit for the Basic S.T.A.R. exemption is now $250,000”. 

Hiring Military Service Veterans

Among the duties and responsibilities shouldered by Boards of Directors and building managers is the selection and hiring of new employees.  Often faced with a pool of candidates, the proper choice is critical to the well-being of a building.

Many people may present similar skills and abilities, immediate availability, etc. and one area that can be too often brushed aside is the value of one’s prior military service and the resultant level of maturity and responsibility that should be added to the mix when reviewing applicants.

You should read more about the The Benefits of Hiring Military Service Members.

Maintaining Adequate Reserve Funds

When a newly elected co-op board is suddenly confronted with an exhaustive amount of major renovation and repair that is urgently needed and predecessor board members had not maintained a sufficient Reserve Fund, the new directors can be in a serious quandary about what to do.

2019 Contract Agreement with Local 32BJ

A new contract agreement with SEIU Local 32BJ, which represents most building workers throughout our membership area, has been  reached.

Board Decisions Are Protected Under the Provisions of the Business Judgment Rule (or are they?)

We are all aware of the extensive responsibilities shouldered by Boards as they run the day-to-day affairs of the co-op/condo, and that they therefore must also have broad powers in decision making. Generally, when they make decisions that are in the best interest of the cooperative lessees they represent, Boards of Directors are protected under the guidelines set by the Business Judgment Rule.  But, that may not always be the case.

It has been the opinion of Courts for decades that so long as the board acts for the purposes of the cooperative, within the scope of its legal authority and in good faith, their judgment is usually final and unless a resident challenging the board’s action is able to demonstrate a breach of this duty the judgment cannot be challenged in the courts.

It is important to recognize exactly how “breach of duty” may be established, and the Courts have determined that a reasonableness review can require the board to demonstrate that its decision was sound, fair and sensible. And, although deference is most times accorded to board decisions, reasonableness review also (and importantly!) permits courts to evaluate the merits or wisdom of a board’s decision.

Such was the case recently when a board of directors was shown to have failed to act in good faith. The full details may be read in a February 28, 2019 article published in Habitat magazine.

Negotiations with Local 32BJ Continue

Negotiations between the Bronx Realty Advisory Board (BRAB) which is the bargaining agent for buildings throughout the Bronx, including the cooperative residences and condominiums represented by the Association of Riverdale Cooperatives & Condominiums (ARC), and SEIU Local 32BJ have been continuing through the month of February.

The expiring contract between BRAB and 32BJ can be found here.

It is likely that any agreed upon settlement will closely mimic the recently settled contracts between the union and Manhattan owners (Realty Advisory Board or RAB), and between the union and Co-op City, which negotiates alone, outside of the rest of the Bronx.  While the settlements already signed by our neighbors in the region may serve some academic interest, they must not be taken as an accurate indicator of what may await BRAB and 32BJ.

Realty Advisory Board Agreement  (Manhattan)

Co-op City Stipulation of Agreement

New York State Mandates Parking Garage Assessments

A new rule requires parking garage condition assessments to be performed by a qualified professional engineer at least every three years. With the first assessment due as soon as next fall for most of the buildings represented by the Association of Riverdale Cooperatives and Condominiums, Boards of Directors and building managers have little time to waste in meeting this new mandate.

According to the new rule (full text available here) parking garage owners must retain a qualified professional engineer, experienced in structural evaluation, to conduct an on-site inspection and evaluation of the parking facility. The purpose of the inspection is to identify deterioration and evidence of any unsafe conditions. Once the engineer completes the Condition Assessment, he or she must prepare, sign, seal and submit a Condition Assessment Report. The engineer must provide an evaluation and description of:

• Deterioration and distress that could result in unsafe conditions,
• Conditions that should be remedied immediately to prevent them from becoming unsafe,
• Conditions that are already unsafe,
• Problems that are leading to deterioration and unsafe conditions,
• Corrective options available, including recommended time frame for remediation,
• Risks of not addressing the deterioration and/or defects,
• Recommendations for preventive maintenance, and
• Recommended timing of the next Condition Assessment.

Following the initial Condition Assessment, parking garages must undergo Condition Assessments at least every three years. If recommended by the professional engineer, or if new or increased deterioration warrants, then the property may need to be evaluated again even sooner.  Every parking garage Condition Assessment Report will be reviewed by the authority charged with oversight and may be followed with an appropriate enforcement action, such as issuing an Order to Remedy, imposing a fine, or suspending or revoking an operating permit.

With the first assessment deadline less than a year away, it is important to begin planning parking structure Condition Assessments now — and anticipate the considerable cost of the assessments and the repairs. Given the large number of parking structures in New York State, qualified professional engineers with appropriate experience will be hard to come by once deadlines approach.  ARC strongly suggests that if your Board of Directors or building manager has not already done so, an architecture/ engineering firm familiar with the newly adopted code and with the qualifications specifically delineated in the new New York State rule be contacted soon.  (It may even be wise to engage an engineer to conduct an informal assessment in advance!)

Right now, all garages originally constructed prior to January 1, 1984, which includes most of the buildings represented by ARC, must have the initial condition assessment completed by October 1, 2019.  BUT, this deadline MAY NOT ultimately apply to New York City buildings.  The City Council will review the State mandate and may adjust the effective date. (Stay tuned!)

Trust Transfers for Shareholders in Co-ops

By Stephen J. Budihas

Shareholders, Directors and building managers often have inquiries as to their options when it comes transferring shares to family members.

First and foremost, when considering transferring one’s shares in the Corporation, shareholders should always seek professional counsel since individual circumstances vary considerably; the process may be an intricate one involving much legal preparation and review; and in almost all cases the Corporation’s consent is required and the Corporation’s attorney will be asked to review the application in order to protect the Corporation’s interests. Further, attorneys categorically remind us that issues of transfer to family members are not simple and do not lend themselves to short summaries. That said, we can attempt to provide some basic information and reminders, which should only serve as groundwork for beginning the personal research that remains every individual’s responsibility:

First, shareholders need to focus on the reason for the transfer and decide whether they are trying to save on estate taxes or on probate costs involved with their will and administration of their estate. While some trusts and other devices may avoid probate costs, in most cases they don’t save on estate taxes and the assets, such as the apartment, are still in their estate for estate tax purposes but can be transferred without going to the Surrogate’s Court to probate the will. These estate planning and tax issues are pretty complex and should be done only in consultation with a trained attorney.  The professional should also be familiar with Elder Law issues and requirements for Medicare and Medicaid eligibility and planning.

Second, the transfer to a relative by will and its executor after probate, or by a trust through its trustee to a beneficiary family member, both require an application to the co‐op’s Board of Directors and approval of the family member, unless it is a spouse (per the provisions of many proprietary leases). The lease provision for board approval usually states that this approval  shall not be unreasonably withheld to a financially responsible member of the shareholder’s family. If the bequest under the will or transfer to a beneficiary under a trust is not to a family member, then board approval is required and no reasonable standard is involved ‐‐ just like a transfer to any purchaser and the board can approve or reject the application in its sole discretion (subject to the prohibitions on discrimination).

The fact that this type of transfer by will or by the trust is subject to approval by the Board may be surprising to many and can cause some confusion unless it is taken into consideration when doing the planning.  So, while shareholders can make provisions in wills and trusts for transfers of their apartments to a family member, board approvals and applications are needed just like in any other sale or transfer.  Although shareholders can undertake to use these possible tools as part of estate planning (either for tax purposes or to avoid probate) the Board approval process cannot be avoided.

There is one method by which a transfer to a family member can usually avoid Board approval after the death of a shareholder and that is to ask to transfer the apartment prior to the death of a shareholder. This may be accomplished by a direct transfer or by adding the family member or other person as a joint tenant with right of survivorship. If this joint ownership is done, then the transfer would be outside of the probate proceeding, if any, involved with the estate after the death of one of the shareholders and no application would be needed at that time since the board had already approved the transfer. (Of course this has other issues for the shareholder regarding co‐ownership of the apartment at the present time that should be considered and dealt with during the consultation with an attorney).

These comments are meant to only provide some basic information and make you aware of some of the issues involved in thinking about a transfer of the ownership of apartment (shares) to a family member. Nothing stated herein should be taken as legal advise.  It is simply hoped that the information is helpful;  and once again, it cannot be strongly enough underscored that a qualified attorney should be consulted if  you are interested in this type of planning.

You may be interested in learning more about the complexity of trust transfers.

Examples of some of the documents that your attorney may prepare and provide you with are:

Trust Transfer Guaranty

Trust Transfer Inducement Agreement

Trust Transfer Maintenance Agreement

Local Law 84 Deadline Approaches

NYC buildings over 50,000 square feet have until December 31^st 2018 to submit 2017’s energy and water consumption. Buildings over 25,000 square feet have until February 1, 2019, to do the same. However, after this year, all buildings over 25,000 square feet will need to comply by May 1^st each year.

(Benchmarking submissions are based on the energy and water use for the previous year).

Proper benchmarking of your building is more important than ever before because starting in 2020, Local Law 33 will require owners of all buildings over 25,000 square feet to post their energy grade at public entrances. Grades will range from A-F and will be based on your benchmarking score, and therefore, it is critical to properly report usage.

If you haven’t already done so, now may be the time to make simple heating, air sealing and lighting upgrades that can boost your grade, improve building performance, lower operating costs, and enhance tenant comfort.

You can get the information you need about Local Law 84 and Benchmarking at Local Law 84 (Benchmarking)

The NYC Retrofit Accelerator offers free, personalized advisory services that streamline the process of making energy efficiency improvements to your building that will reduce operating costs, enhance tenant comfort, and improve our environment.

You can contact the NYC Retrofit Accelerator Program at https://retrofitaccelerator.cityofnewyork.us/contact or 212 656-9202 or via e-mail to info@nycretrofit.org for free assistance in improving your energy consumption.

To Hire or Not to Hire (building staff, after hours, that is)

Many building managers and boards of directors hire their building staff to perform work in the building and on their building’s grounds after hours.  And why not?  The workers are known to the management, and they are often seeking opportunities for additional income.

It sounds like a win-win situation.

But wait! There may be serious issues and entanglements that should foreshadow hiring building staff beyond their normal, contractual work hours.

A recently published article in Habitat magazine spells out some of the problems.  Read the article here.

Local Law 33

Starting in 2020, Local Law 33 will require owners of all buildings over 25,000 square feet to display their Energy Efficiency Grade at public entrances. Grades will range from A-F and will be based on your buildings’ annual ENERGY STAR® scores calculated from annual benchmarked energy use.

Your 2020 grade will be based on the building’s performance in 2019 so the time to make improvements may be right now! Efficiency Advisors from the NYC Retrofit Accelerator program are available to work with you to identify your options, access incentives to lower your costs, and connect you to qualified contractors to do the work.  Simple improvements to your existing heating system and lighting can boost your scores and save you money.

The full text of Local Law 33 can be found here.

Retrofit Accelerator advisors can be reached at NYC.gov/RetrofitAccelerator or by telephone at 212.656.9202.

The Question of Smoking in Co-ops and Condos

The Question of Smoking in Co-ops and Condos

By Stephen J. Budihas

With the availability of incontrovertible proof as to the cause and effect of smoking on one’s health; and further on the impact of second-hand smoke, there will probably always be a conflict between those who smoke in the privacy of their own apartments and others to whom smoke seeping through walls, ventilation shafts and miscellaneous cracks and crevices provides a genuine nuisance at the very least and a serious health concern at worst.

In New York City, the Smoke-Free Air Act of 2002 provides the following guidance:

Further, NYC.gov states,

“There is no law that specifically prohibits a neighbor from smoking in his or her home. . . . . However, some owners do prohibit smoking in residences, in which case smoking indoors could be a violation of a lease or rental agreement.”

Thanks to the expert summations provided by the ARC General Counsel, Marc Luxemburg, Esq., we can provide the following information from a number of recent court rulings so that you may better appreciate the issues involved, the diversity of the legal opinions and so that you can make an informed judgement about smokers’ rights and the rights of those impacted by individual smoking, especially including building corporations.

The most oft-quoted and precedential case is  Ewen v Maccherone, (2009), reversed, Supreme Court Appellate Term, May 26, 2011 – Plaintiffs commenced the instant action to recover damages for negligence and private nuisance against defendants, alleging that secondhand smoke from defendants’ “excessive smoking” “seeped in” through the walls into plaintiffs’ apartment, which condition was “exacerbated” by a building-wide ventilation or “odor migration” construction design problem.

In fact, the complaint expressly stated that “while a smoking neighbor may be a mere annoyance under normal circumstances, due to the odor migration problem, secondhand smoke fills [plaintiffs’] kitchen, bedroom and living room, causing them to vacate their unit often at night” and resulting in personal injuries.

“Not every intrusion will constitute a nuisance. ‘Persons living in organized communities must suffer some damage, annoyance and inconvenience from each other . . . If one lives in the city he [or she] must expect to suffer the dirt, smoke, noisome odors and confusion incident to city life’ ” (Nussbaum v Lacopo, quoting Campbell v Seaman, 1876). And, defendants’ conduct in smoking in the privacy oftheir own apartment was not so unreasonable in the circumstances presented as to justify the imposition of tort liability against them

To the extent odors emanating from a smoker’s apartment may generally be considered annoying and uncomfortable to reasonable or ordinary persons, they are but one of the annoyances one must endure in a multiple dwelling building (see also:Matter of Levandusky v One Fifth Ave. Apt. Corp., 1990; and Poyck v Bryant,2006), especially one which does not prohibit smoking building-wide.

Defendants did not have a duty to refrain from smoking inside their apartment or to avoid exposing their neighbor to secondhand smoke that unintentionally seeped into the neighbor’s apartment, [and so] plaintiffs’ negligence claim must fail.

READ MORE CASE STUDIES

The Question of Dogs in Co-ops and Condos

The Question of Dogs in Co-ops & Condos

By Stephen J. Budihas

The issue of dogs in co-ops and condominiums has always been and will probably continue to be a contentious one, and one that has frequently led to widely diverse and often contradictory rulings in the courts.  We can make certain statements with some certainty:

• The law requires a housing provider to reasonably accommodate disabled tenants, so they can enjoy the rights and privileges of the housing; but, there is ever the underlying issue of determining whether dogs are necessary to support an individual’s handicapping condition versus dogs that are merely helpful in providing comfort. Confounding the issue is the fact that today false accreditations are widely available through websites that offer fake “certifications” for dogs – no doctor’s note required.
• Boards should have a dog policy in place and take any requests from disabled tenants seriously. The issue of a Board’s authority to establish and enforce certain rules with regard to the possession of pets and dogs in particular presents less controversy and is generallyupheld by law.
• The means by which any Board expresses its rulings and proceeds to enforce them often serves as the fodder for litigation, overriding the “dog” issue. If a board is engaging in good faith in the interactive process, it’s probably not going to be held liable for its decisions — which are protected by the Business Judgment Rule unless the board is found to be discriminating against the disabled.
• Often, the precise legal manner in which attorneys represent the issue before ruling authorities determines the outcome – thereby avoiding the issues presented by either party, altogether.

It is difficult to offer guidance under these prevailing circumstances, and so a number of recent rulings are cited here for reference.  READ CASE SUMMARIES

The Question of Bedbugs in Co-ops and Condos

The Question of Bed bugs in Co-ops & Condos

by Stephen J. Budihas

Co-op apartments are governed by proprietary leases, which allow the residents to occupy the apartment under a typical lease and take ownership of stock in the corporation that owns the building. Because these documents are leases, residents are covered by the warranty of habitability (New York Real Property Law, Section 235-b), which requires rental building owners to maintain the property in a condition fit for human habitation and free of conditions that would endanger the health, life, or safety of the occupants. Therefore, it is the responsibility of the co-op board to provide extermination of any bedbugs found in a co-op apartment.

For tenants in New York, the right to a bedbug-free environment is specifically included in the city’s Housing and Maintenance Code, Subchapter 2, Article 4 (see: below), which specifically names bedbugs in the list of insects the landlord is legally obligated to eradicate. Further, the New York City Department of Housing Preservation and Development (HPD) lists bedbugs as a Class B violation, which means that they are considered hazardous and that the landlord has 30 days to eradicate the infestation and also keep the affected units from getting reinfested.

Under §78(1) of the New York Multiple Dwelling Law, landlords are responsible for maintaining their premises in good repair. In addition, the implied warranty of habitability set forth in New York Real Property Law §235-b obligates a landlord to warrant that an apartment is habitable and in a condition that does not adversely affect a tenant’s health and safety.  Both statutes are applicable to cooperative apartments.

Housing Court and Civil Court cases have relied on these statutes in holding landlords responsible for failing to properly address bedbug infestations by giving an abatement or awarding damages for property loss that is the direct result of a landlord’s failure to properly address a bedbug infestation. The New York City Department of Housing Preservation and Development specifically requires cooperatives to assume the responsibility for eliminating bedbug infestations. Therefore, boards of directors must assume responsibility for exterminating bedbugs in their buildings, specifically including infestations in cooperators’ apartments.

As an important side note, if treatment is not effective because a cooperator fails to properly prepare the apartment according to the selected exterminator’s instructions or because the cooperator failed to dispose of infested belongings pursuant to the exterminator’s directives, the cooperative would have a basis for charging the continuing extermination costs to the cooperator. The cooperative could then commence an action against the offending cooperator to recover these fees, provided the cooperative can obtain convincing evidence that the additional extermination costs are due to the cooperator’s conduct. (N.B.:  In dealing with a non-compliant cooperator, it is always important to work with the cooperative’s attorneys).

Further understanding of the situation and its legal bases, can be obtained by examining the provisions found in the New York City HOUSING MAINTENANCE CODE ARTICLE 4, entitled, “EXTERMINATION AND RODENT ERADICATION”:

1. §27–2018.1 Notice of bedbug infestation history.
   1. For housing accommodations subject to this code, an owner shall furnish to each tenant signing a vacancy lease, a notice in a form promulgated or approved by the state division of housing and community renewal that sets forth the property’s bedbug infestation history for the previous year regarding the premises rented by the tenant and the building in which the premises are located.
   2. Upon written complaint, in a form promulgated or approved by the division of housing and community renewal, by the tenant that he or she was not furnished with a copy of the notice required pursuant to subdivision a of this section, the division of housing and community renewal shall order the owner to furnish the notice.
   3. An owner of a multiple dwelling shall (i) provide each tenant, upon commencement of a new lease and with each renewal lease, or (ii) post in a prominent public location within such multiple dwelling the following:
      1. a copy of the most recent electronic form submitted pursuant to subdivision a of section 27-2018.2; and
      2. a notice, in a form promulgated or approved by the department of health and mental hygiene, that provides information about the prevention, detection and removal of bedbug infestations.

As one can imagine, there are many instances of the cited rules and regulations being tested in our courts.  Two cases in particular have set the bar of precedence and should be of particular interest.  READ THE CASE STUDIES

Local Law 154 Informs Residents

In the ever expanding world of City regulations and requirements, Local Law 154, which was scheduled to go into effect on December 31, 2017 but whose effective date was extended to July 18, 2018 ensures that residents are informed of certain construction via a new Tenant Protection Plan.

Co-ops and Co-op Boards Again Under Attack in Council

Thankfully they failed to pass the New York City Council in 2017, but Intro’s 1458 and 1467 that are specifically designed to limit and control certain powers and responsibilities of co-op boards still languish on the floor of the New York City Council.  And, while there was insufficient support to pass these bills last year,  Council Member Lander has found an insidious method to attempt to breathe life into them by cleverly subsuming his attack in a few paragraphs deep within a sweeping 32-page report on desegregation.

The Association of Riverdale Cooperatives and Condominiums has voiced strong opposition to the misleading information contained in Lander’s report with letters to all of the Council Members on the Committee for Housing and Buildings.  ARC’s response can be read by tapping here.

Maintaining Your Building’s “Bella Figura”

Maybe we are not all experts at landscaping economically to preserve our assets.

The April 2018 issue of The Cooperator offered two excellent articles that can be of benefit to all board members and building managers who are duly concerned about their building’s landscaping.  Read about Choosing the Right Plants for Landscaping for your building; and Working With Your Landscape Architect

32BJ Contract Agreement for Manhattan, Queens, Brooklyn & Staten Island

On Friday, April 13th a contract agreement was reportedly reached between Local 32BJ, representing building workers in Manhattan, Brooklyn, Queens and Staten Island and the Realty Advisory Board (RAB).  The new contract is set to run for four years through April 2022 and now needs to be ratified by the union’s members.

Legislators (Again) Seek to Govern Actions of Boards of Directors

Once again there are those in the New York State Senate and Assembly who would seek to restrict and control the autonomy of the cooperative boards of directors.  Year after year they (and others in the City Council, as well) introduce similarly restrictive legislation in the hope that the unwary may allow the bills to slip through.

The new bills (A10084 and Senate Bill 7523) contend that new provisions are needed to, “ensure uniformity and predictability to the application processes” used when potential homeowners seek to purchase cooperative apartments.  A second provision of the proposed legislation would force restrictive timelines to constrain and control each individual board’s review of purchase applications. The bills impugn the integrity of our co-op boards and actually go so far as to state that, “the processes and conditions [currently employed by cooperatives] give the appearance and have the potential to be misused against a purchaser of cooperative housing . . . [and] because New York State strongly opposes all illegal discrimination . . . ” additional safeguards are needed.

Co-ops boards are already properly guided in their actions by existing laws at every level of government.  No further impositions are needed.  State legislators must be informed and guided to vote “NO” against these bills.

Read a copy of the letter to our legislators from the Association of Riverdale Cooperatives and Condominiums urging the defeat of these bills here:

Human Rights Commission Opposes Proposed Regulation of Co-ops, too!

While the City Council of the City of New York occasionally sees fit to continue in its efforts to impose more regulation on co-op and condo Boards (see: Intros 1458 and 1467), even the Human Rights Commission has said that new, additional regulation is not needed. Read more.

More Regulation: Gas Lines Must be Inspected

The City Council of New York passed a new law that will take effect on January 1, 2019.  LL152 provides that building gas pipe systems must be inspected at least once every five years.  All exposed gas lines from point of entry of gas piping into a building, including building service meters, up to individual tenant spaces shall be inspected for evidence of excessive atmospheric corrosion or piping deterioration that has resulted in a dangerous condition, illegal connections, and non-code compliant installations shall be inspected by a licensed master plumber. The inspection entity shall also test public spaces, hallways, corridors, and mechanical and boiler rooms with a portable combustible gas detector.  The full text of LL152 can be read here.

New Law Relating to Conflicts of Interest in Co-ops and Condos

New bill, presented in both the New York State Assembly and Senate were signed into law by the governor on September 12, 2017 and are effective January 1, 2018.

The law adds a new section to the Not-For-Profit Corporation Law requiring annual reports for cooperative and condominium housing to be submitted to the members identifying any votes on contracts that were subject to laws relating to related party transactions. The law also adds a new section to the Business Corporation Law requiring annual reports for cooperative and condominium housing to be submitted to shareholders identifying any votes on contracts that were subject to laws relating to related party transactions.

You can view the full text of the Assembly bill here.

You can view the full text of the Senate bill here.

New Heating Regulations

The City Council and the Mayor of New York City have passed new legislation that will impact all of us in many ways.

Beginning October 1, 2017, pursuant to Local Law 86 of 2017, the regulations regarding providing heat during the nighttime hours have changed.  Read the full text of the new regulation here.

Between October 1 – May 31 property owners must maintain an indoor temperature of 62° inside all apartments at all times — this means regardless of the outside temperature. More specifically, this means that the temperature inside apartments at night must now legally remain at 62° (up from 55°) even between the hours of 10PM and 6AM without any regard to the outside temperature (outside temperature formerly needed to be below 40°). The legal daytime temperature inside remains at 68° whenever the outside temperature is below 55°.

This change in the law will undoubtedly have an immediate impact on all buildings.

• Boilers will be working much more often, and oftentimes around the clock, without needed rest.
• Heating systems will require additional maintenance and surveillance.
• The loss of heat through improperly insulated pipes will become a greater problem than it now is.
• And, obviously, every building can expect to require more heating fuel — meaning an increased number of fuel deliveries (how will the already much-maligned fuel delivery industry respond?)
• Obviously too, these changes come with resultant increased demands on the operating budgets of every building.

These are all issues that need to be addressed now by Boards and building managers, before the cold weather is upon us and before the impact of LL86 is felt.

Service Dog Scams Abound

There are few issues confronting co-op and condo boards that are more emotionally charged by those on both sides of the argument than dog ownership.  Those who own dogs are adamant, vociferous and often deceitful in their passion.  Those opposing dog ownership in their buildings defend the “no dog” clause of their House Rules with equal fervor.

Each year “dog cases” are litigated in the local courts; and each year there seem to be conflicting opinions handed down.  Usually the judicial opinions reflect procedural issues that the plaintiff or the defendant followed or failed to follow, and prudently avoid the issue of dog ownership or the banning of dogs.

Much is written annually, too, and in an attempt to provide some guidance to Boards of Directors and to dog owners, as well, one can read more about Bogus Therapy Dogs in Co-ops,  Disability Dogs and  Disability Dog Certification.

Co-op Boards Must Establish Smoking Policies

1585-A passed the City Council and is now law.

Read the entire text of Int. No 1585-A here.

Here is a model Smoking Policy for your consideration.

Sidewalk Shed System is “Broken!”

Contractors dealing with Local Law 11 provisions or other building façade work are appropriately required to protect areas used by pedestrians, and they usually do so by sub-contracting the installation of sidewalk sheds.  The businesses that install the sheds generally appear eager for the work and upon contracting, usually do so very rapidly — often long before work on the building actually begins. Then they are required to leave them in place after the work is completed and after it is certified by a professional engineer, until a Department of Housing inspector comes out and OK’s the engineer’s approval and certification of the completed project.  Then, and only then can the sheds finally be removed — at the convenience of the shed contractor, of course.

During the entire time that sheds are up, landlords, cooperative apartment shareholders and condominium owners must shoulder the unnecessary burden of costs associated with the sheds outside of the time that work is being done on the buildings.  Read more

Co-ops Push Back Against Bills to Speed Application Process

For years, co-op boards have fended off legislative efforts to rein in their considerable powers – especially on the thorny issue of how they screen prospective buyers. This year is no different. Bills before the New York State Senate and New York City Council are looking to put time limits on co-op boards as they review purchase applications. And co-ops are pushing back. The battle has been joined.

“We are looking for people to move into the buildings who will be financially secure and can afford the mortgage,” says Stephen Budihas, president of the Association of Riverdale Cooperatives and Condominiums, which represents over 20,000 units in 130 buildings. “I don’t know of a single shareholder or condo unit-owner who lives in any of our member buildings who failed on their mortgage or monthly maintenance during the mortgage crisis in 2008-2009. That speaks volumes to the quality of review each of these boards of directors conducted.”

read more

Newly Proposed Legislation Strikes At Autonomy of Co-op Boards

By Stephen J. Budihas, February 12, 2017

At times elected officials are all-to-quick to address the complaints and concerns of a disgruntled individual or a fat-cat supporter by proposing a new blanket of legislation that would needlessly and unfairly cover thousands of law-abiding and already scrupulously governed citizens.   Such is currently the case, in both the State legislature and the City Council. Representing only the prurient self-interest of some few realtors eager to rapidly turn over the sales of apartments and perhaps even fewer resentful prospective purchasers of apartments who failed to meet the criteria for admission to a co-op here or there – bills have been proposed that would drastically hamstring, undermine and negate the best efforts of legally constituted co-op review committees throughout the City and the State.

Read the entire article here.

New Rules for Balcony Enclosures

Recent balcony accidents highlighted that many balcony railings are uninspected and may be unsafe. Thus, the Buildings Department amended the Rules of the City of New York (RCNY) to require balcony railings and their connections on all buildings taller than six stories to be evaluated for structural soundness as a part of New York City’s Facade Inspection and Safety Program (FISP ­– a/k/a Local Law 11/98).

Read more

Business in Your Co-op or Condo? Probably NOT!

In New York City, there are various restrictions in place that apartment-dwellers must follow regarding what type of business they can operate and what they can sell.  New York City’s zoning resolutions strictly govern or prohibit many businesses and especially daycares.  Additionally, regulations don’t permit any home business with multiple employees or that require numerous deliveries. Recently the “The Cooperator” published an article that discusses this issue.

(Read more)

Co-op Shareholders Deserve Reverse Mortgages, If They Want Them!

The issues surrounding reverse mortgages are many and they are debatable.  For a certain segment of our population they may provide needed cash.  Home owners are eligible to apply them, but currently co-op owners may not.

We do not wish to argue the merits or shortcomings, but rather simply endorse the availability of reverse mortgages, replete with appropriate protections and sanctions and subject to the approval of Boards of Directors (just like any other mortgage), as may be afforded to our neighbors who own their private homes.

During the 2015-2016 legislative session in Albany, Senator Klein introduced a bill, s7844, that would simply amend the existing law to include cooperative dwellings, rather than exclude them as the law currently does.  This amendment needs to be reintroduced and passed in the legislature.

New Property Tax Classification for Co-ops and Condos Needed

During the 2015-2016 legislative session an important piece of legislation was introduced, but there was no final action on it.

Senate Bill s-893 would “amend the real property tax law, the administrative code of the city of New York and the real property law, in relation to classifying properties held in condominium and cooperative form for assessment purposes as class one-a properties.”  This would remove co-ops and condos from the same classification as commercial income-producing dwellings and bring their property tax rate closer to that enjoyed by owners of one- two- and three- family homes.

Needless to say is an important measure that would obviate the need to seek tax rebatements from the legislature every three years, as is currently the case, and properly treat co-op and condo owners as the “home” owners they truly are.

Bill to Restrict Autonomy of Boards

During the 2015-2016 session of the New York State Legislature a number of bills were sponsored, but not enacted.  One of them is of special concern to all co-operators and condominium owners throughout the state.  Operating from its stated premises that during the review of applications, a Board of Directors may “illegally discriminate against a purchaser of cooperative housing” and “that the process for purchasing a cooperative dwelling include additional safeguards to protect against illegal discrimination”.

As everyone who has ever served on a Board of Directors is fully aware there are many laws at all levels of government that protect against immoral discrimination and provide for sanctions against those who engage in such illegal activity.  Further, Boards operate under the close scrutiny of their shareholders, attorneys and managers and neither should any of those people should be assumed to be engaged in illegal activity (as the proposed bill suggests).

Nevertheless, there are a few outside of the City of New York and outside of Westchester county who would (perhaps unknowingly) seek to impose grossly unnecessary and unwarranted sanctions and limitations on the actions of Boards of Directors – as are detailed in last year’s proposed Bill (S-5644).  The full text of the bill can be found here.

It is fervently hoped that this bill, in any form or modification, will not be reintroduced.  ARC joins its sister organizations from throughout New York City and Westchester in a unified front to oppose the legislation.  It is hoped that you will review the text of the old bill and encourage your elected officials to strongly oppose any effort in its behalf.

North Riverdale Smart Growth Plan

A plan to markedly alter the appearance of several parts of Riverdale has been sponsored by a bloc of local individuals and businesses.  The proposition is still in its early stages and may be followed by a revision before any serious action will be forthcoming.  However, some if not all of the recommendations may be forthcoming with or without the input of the residents of our community.  So that you may fully review the plan and come to your own conclusions, a copy can be found here.

Directors’ Ethics

A director has a duty of good faith and loyalty to the cooperative. This means that:

• A director owes allegiance to the cooperative and must act in the best interests of the cooperative while acting in his or her official capacity.
• A director should be diligent to ensure that the cooperative’s interests are pursued during the meetings of the board of directors.
• A director may not use the position for personal profit, gain or other personal advantage over other member shareholders of the cooperative.
• A director is accountable to the member shareholders of the cooperative for his or her official actions and can be held personally liable for fraud or breach of fiduciary duty in the conduct of the cooperative’s affairs.
• A director who exercises honest and reasoned judgment and acts reasonably and in good faith for the best interests of the cooperative will not be held liable for violation of his or her fiduciary obligation to the cooperative.

Read “BoD Code of Ethics” which must define a Director’s service.

Duties of Co-op / Condo Boards

The charges for Boards are several: fiduciary responsibility; policy and operational
decisions; loyalty and reporting to the building’s residents; and long-term care for
the physical aspects of the corporation.

Learn more about the Duties of the Board of Directors

In response to ARC requests, Congressman Engel petitions HUD for Reverse Mortgages for co-ops

On July 27, just one day after he spoke with ARC’s president about the matter at the ARC Annual Dinner, Congressman Eliot Engel, called on Housing and Urban Development (HUD) Secretary Julián Castro to issue regulations swiftly to allow co-op owners to take part in HUD’s Home Equity Conversion Mortgage (HECM) program.

“While Congress extended the reverse mortgage option to co-op owners through the Housing and Economic Recovery Act of 2008, HUD has not issued the regulations needed to execute this section of housing law,” Engel said.  “I spoke to Secretary Castro last week, and followed up with a letter, urging him to issue regulations so that co-op owners can also take advantage of this program.”  Read the full text of the Congressman’s press release here.

Read the full text of Congressman Engel’s letter to HUD Castro

Senator Jeffrey Klein Introduces Legislation to make Reverse Mortgages Available to Co-op Owners

Responding to entreaties from ARC and other advocacy groups, New York Senator Jeffrey Klein introduced legislation in Albany that would amend the real property law to make reverse mortgages available to cooperators over the age of 70.  Known as S-7844, the measure is a simple one that would merely include cooperators in the universe of those permitted to apply for reverse mortgages, rather than allow them to be singled out and excluded from availing themselves of that potential resource.  Read the text of Act S-7844.  As the legislative session in Albany drew to a close at the end of June, Assemblyman Jeffrey Dinowitz indicated that the measure, already passed by the NYS Senate, had not reached the Assembly in time for action in this term, but that it would be high on his priority list come the fall of 2016.

Co-op Residents Deserve Reverse Mortgages, Too!

If you’re 62 or older and own your own private home or certain approved condominium – and want money to pay off your mortgage, supplement your income or pay for healthcare expenses – you may be able to consider a reverse mortgage. It allows you to convert part of the equity in your home into cash without having to sell your home. BUT, if you are co-op owner this valuable resource is NOT available to you. This is because of the current guidelines set by the Department of Housing and Urban Development and the concomitant New York State banking regulations do not include co-op owners in the classification of those who may apply.  Read more.

Proposed Changes in the Neighborhood

Living in a City as grand as our own, one is often faced with issues that are vast in scope and can at times appear to lose sight of the particular needs and interests of the citizenry it is empowered to serve.  Riverdale, and undoubtedly a few other neighborhoods in the City like it, are currently faced with local legislative action that may have great impact on the quality and character of those neighborhoods.  In addition, residential communities are continually faced with the onslaught of unwanted commercial development that also inevitably diminish the personality and stability of the areas.

An important change is being considered on at least one site in Riverdale; and that that change, if it occurs may simply be a harbinger of similar, undesirable changes to come.

The Association of Riverdale Cooperatives & Condominiums joins all of the residents of our community in expressing its concern about unrestrained and unwanted development that has the possibility of altering the way of life that has become so representative of our neighborhood, a way of life that has specifically attracted us to the area and contributed to its permanency for decades.

Read more here about the details of the prospective development, and to learn how several of our neighbors think about the proposals.

Problematic and Disruptive Neighbors

The vast majority of co-op and condo residents are decent folks who wouldn’t dream of disrupting life in their buildings by being verbally abusive to neighbors, by loading up board members’ phones and email inboxes with endless complaints and threats, or by filing lawsuits at the drop of a hat for every slight (real or perceived) that they suffer. Unfortunately, there are shareholders and unit owners who seem to thrive on these very things and they can make life miserable for neighbors, board members and managers alike. But, there are ways to deal with them effectively, and civilly. Read More

Fraudulent Service Animals

There are few people as passionate as pet owners, and for evidence look no further than condo and co-op
communities. The many health and aesthetic concerns that go with pets compel many boards to favor a ban
on pets altogether.  Federal law provides for exceptions to pet bans in the case of those who can demonstrate a need for a service dog.  But, very few laws have been abused as far as the reasonable accommodation statute.  Read more

Senators Introduce New Co-op / Condo Property Tax Bill

New York State Senators Jeffrey Klein and Tony Avila  have newly introduced a number of bills regarding co-ops and condos, especially including S893, which for the first time would recognize co-ops and condos as the unique forms of housing that they are and create a residential property taxation class separate from commercial residential properties (and, necessarily if the act is to have any chance of passing, also separate from one–  two– and three–family homes).

Read the text of the proposed S893.

Riverdale: Home to Many Notable New Yorkers

Riverdale has always been a favored place to live.  Many notable New Yorkers have called the area, “home”  Click here to view a brief listing of some the past and present neighborhood celebrities.

Responsibilities of Directors

Eric T. Schneiderman, the Attorney General of the State of New York has published the guidelines governing the actions of Directors of all not-for-profit corporations.  Read more.

How is Your Building’s Property Tax Calculated?

The system that is used to calculate each individual property’s annual real estate tax assessment is complicated, but does not need to be mystifying. Read how its done here in the  Coop & Condo Property Tax Guide

ARC Urges State Legislators to Renew Tax Abatement

The Association of Riverdale Co-ops and Condominiums has contacted local State representatives in an effort to ensure that a new measure is sponsored and supported, and more importantly passed in a timely fashion, so that property owners are not hit with an unduly large tax bill this summer when the current legislation expires.  Read more, as published in the Riverdale Press 050715 

Sprinkler Disclosure Law Goes into Effect 12/3/14

We have been reminded by our General Counsel, Marc Luxemburg, that pursuant to New York State Real property Law, Article 7 Section 231-a and effective December 3, 2014, all residential leases must contain a notice in bold face type as to the existence or non-existence of a Sprinkler System in the Leased Premises.

For most of us, the Leased Premises are the apartment which is the subject of the proprietary lease. If there is no sprinkler system in the apartment, this Sprinkler Disclosure Notice may be used. If there is a sprinkler system in the apartment, this must be disclosed in the notice and the notice must state the last date of maintenance and inspection.

The notice must be inserted into and made part of every proprietary lease, including any amendments that may be made in the future.

If you have questions, please consult your building’s attorney or you may contact Mr. Luxemburg at Gallet, Dreyer & Berkey, LLP at 212 935-3131 or mjl@gdblaw.com

Thinking of Buying A Co-op?

The National Consumer Cooperative Bank, one of the areas largest lenders to co-ops and condominiums has published an informative guide that answers many questions regarding the purchase of an apartment.  Learn more by reading the Consumers-Guide-to-Buying-a-Co-op

Hiring a New Building Manager?

Here are some Questions for Prospective Building Managers

Negotiating Management Contracts

Drawing up a contract for management services looks at first glance like a simple task. Such contracts usually follow a particular format and outline similar services for both co-ops and condos, regardless of size.

But what about contract areas where there’s room for negotiation?

How can a board and a management company arrive at a contract that helps foster a cooperative relationship?

Learn about Negotiating Management Contracts.

32BJ Contract to Expire in March 2015

On March 14, 2015 the contract between local union 32BJ and the Bronx Realty Advisory Board shall expire.  The agreement between the two bodies describes and governs the working conditions and arrangements in most of the buildings in the Bronx, specifically including the co-ops and condos throughout Riverdale.  The Association of Riverdale Cooperatives and Condominiums continues to be the representative voice for the latter and has already begun meeting with BRAB officials regarding contract negotiations which will begin sometime in early 2015.  During the past year, a contract agreement with the local was reached with a separate bargaining unit in Manhattan (read about the 32BJ Building Agreement – 2014 (Manhattan)).  This agreement has historically served as the basis for negotiations in the Bronx.

All co-op and condo Boards should be familiar with the entire contract.  A copy of the entire BRAB-CONTRACT 2011-2015 is available to you here.  Boards of Directors should review the contract and note any exceptions or additions that they are concerned with, and notify ARC directly of their concerns.

Estate Planning

Many married cooperators purchased their apartments prior to 1996.  Those who did may be living under a misconception that since both he husband and wife’s names appear on the ownership documents that if either passes, the other shall automatically become the sole owner.  Such may not be the case!  Attorney Ronald A. Sher of the law firm Himmelfarb & Sher, LLP recently wrote an article that was published in the November 2013 issue of Habitat magazine.  Entitled,  An Estate Planning Primer, we are pleased to make the information available and strongly suggest reading it and then possibly consulting your own attorney.

Co-op and Condo Property Tax Guide

N.Y. State Law mandates that New York City value all Class 2 properties as income producing, based on their income and expenses. This means that when you see the Market Value that NYC assigns to your property, it may not look like what you would expect its sales price to be.

To get to your Market Value, NYC uses a statistical model as a tool to find typical income and expenses for properties similar to yours (in terms of size, location, number of units and age). Next,  a formula is applied to the income data to get to your Market Value.

All rental buildings, cooperatives and condominiums are valued as if they are income producing properties. There are variations in how  your Market Value is determined depending on whether you live in a larger condo or co-op with 11 units or more, or a smaller building with 10 units or fewer.

The rules, regulations and the system can all be very confusing, but NYC has published a guide to Coop & Condo Property Tax Guide that explains and may clarify the issues.

Property Tax Abatement – February 2014

You may have heard a number of conflicting or confusing statements regarding the property tax abatement for Co-ops and Condos.  To read and understand the City’s official position you can read all of the latest official information here.

Co-op boards are legally required to report changes or discrepancies in ownership or eligibility for the 2013/14 tax year to Finance by February 15, 2014. Changes must be reported using the Co-op Tax Benefit Change Form which is an Excel spreadsheet that should be downloaded for your use (if necessary).  Note that using this link will place the spreadsheet on your desktop for your use, but nothing will appear on your browser window!

To further clarify certain other abatement-related issues for you, the answers to many frequently asked questions are provided by New York City Department of Finance here.

Con Edison to Bring Gas Lines to Riverdale

More than three years ago the leadership of the Association of Riverdale Cooperatives & Condominiums visited with the Vice President of Con Edison and his leadership team to present the innovative idea of bringing substantial natural gas supplies to Riverdale.  Many of the co-ops & condos in our neighborhood were beginning to consider alternative heating fuels and natural gas could be a very fine alternative, were it available in quantity.  It was not, at that time.

ARC continued the conversation with Con Edison and about a year later, bringing natural gas to Riverdale was on the table, but the costs involved for any individual building were exhaustive and prohibitive.  ARC introduced the idea of grouping (later known as “clustering”) neighboring buildings to receive distribution lines in the plan so that each would not need to bear the full cost of digging and running the required piping through the streets.  ARC continued to lobby against charging individual buildings the full cost of bringing lines in from the main sources (which was at the time the operative plan).

On several occasions, ARC presented representatives of Con Edison (and others) to its membership to present the details involved in conversion to gas heating, and for the past several years, ARC continued to supply information both at our seminars and on its website to assist Boards and managers as they considered the conversion plans that became available.

While it is certain that the efforts of many groups and individuals combined to make the availability of natural gas in our area a reality, and it is certainly not our intention to gloat,  it is nevertheless with considerable pride that we have read the newly posted notices in our neighborhood, and note that our efforts to serve our community have been realized.

By now most of us have seen the announcement from Con Edison attached below for your convenience:

Work Notice Monday, November 18, 2013 Con Edison is installing a new gas main to improve service in your area. Work is already underway and will continue through mid-February. The excavation will impact on-street parking, and in some areas we may need to close streets to vehicular traffic to expedite this work. Excavated areas will be covered by road plates at the end of each shift, and the full width of the roadway will be open to vehicles and pedestrians. We will maintain storage areas along our route during this project. Work hours are weekdays from 7 a.m. to 6 p.m. and Saturdays from 8 a.m. to 6 p.m. Work will be performed in segments to minimize traffic disruptions. When work is completed on one segment, the road will be permanently restored before moving to the next segment. Work Areas: Knolls Crescent, Arlington Avenue, West 227th Street, Henry Hudson Parkway Palisade Avenue and Kappock Street Johnson Avenue and Kappock Street Independence Avenue between West 227th and West 230th Streets Douglas Avenue and West 236th Street Henry Hudson Parkway between West 235th and Johnson Avenue Netherland Avenue between West 236th Street and Henry Hudson Parkway West 238th Street between Johnson and Riverdale Avenues West 238th Street between Riverdale and Waldo Avenues   We apologize for any inconvenience. For more information, call Public Affairs at 1-914-925-6315 or e-mail Evelyn Oliver at olivere@conEd.com.

Hudson River Valley Greenway

The vast undertaking known as the Hudson River Valley Greenway that includes the development of green space and bicycle paths through Riverdale  will have a definite impact on our neighborhood.  The complete and comprehensive report issued by the New York Metropolitan Transportation Council is available here: Hudson River Valley Greenway Report