Page 24 - CooperatorNews New York Expo 2021

24 COOPERATORNEWS — OCTOBER 2021 COOPERATORNEWS.COM be when mandated to obtain agreement not of the potential cost to residents.” Indeed, the loans?) and how to help boards decide how to just from a majority of the board, but from Foundation for Community Association Re- a majority—or even a supermajority—of the search (FCAR) found in its 2020 report about that minimize the impact on their wallets association’s entire voting membership. Nev- ertheless, legislators have proposed a number underlying cause of the problem was known; owners. of bills that actually aim to increase the con- trol that shareholders or unit owners have the actual cause because association decision- over board decisions, even though, according makers wanted to attempt a minor repair to contingent of folks who are adjusting their to Weisberg and Degenshein, “it is the board control the damage or they needed time to practices and parameters in the aftermath of that has the fiduciary obligation to act in the develop a financial plan for the repairs. Either Surfside. Real estate agents in South Florida best interests of the entity, and not in the in- terest of a particular owner’s pocketbook.” The costly for the community.” attorneys say that under the guise of encour- aging transparency, “bills like the Cooperative and higher fines for noncompliance—are Shareholder Protection Act in the New York not going to solve the financial shortfalls or vera Real Estate, a luxury brokerage repre- Senate would give shareholders or unit own- ers—none of whom owe a fiduciary obliga- tion to the entity—control over, if not a veto just such conditions that contributed to the Downtown Development Authority, tells of, board decisions.” The attorneys argue that rather than fur- ther delaying or obstructing boards from making essential decisions for their commu- nities, the law should move toward removing or invalidating bylaws that restrict a board’s authority. Moreover, co-op, condo, and HOA boards should be encouraged—if not required—to obtain and follow input from professional advisors. But the responsibility for effective leadership ultimately lies with the electorate: All owners in multifamily commu- nities should stay informed and engaged, and elect proactive board members who will make ers in Surfside this June. The building was due ing inspections.” decisions in the interest of the common good, for its mandated 40-year inspection; qualified even if those decisions are unpopular with engineers had recommended structural fixes luxury commercial and residential projects certain constituencies. Building Better Bureaucracy Legislators across the country are also re- sponding to Surfside with laws intended to observed—“While homeowners will toler- strengthen or increase requirements for build- ing inspections and repairs. In Jersey City, gency, evidence in this study suggests that it’s structed”—concerns that did not surface as New Jersey—the state’s municipality with the often hard to convince them to contribute to much before the Surfside disaster. most high-rises—Mayor Steven Fulop an- nounced just a few weeks after the Champlain assessments. Substantial special assessments assumed a property was planned and built Towers collapse new laws that will do just that are particularly unwelcome”—the owners at properly,” Wolf continues. “Now, I have had in his city. “Our goal is to strengthen our poli- cies in order to provide the best protection for balked at the $15 million price tag. our residents and the community at large,” Fu- lop said at the announcement. The new law applies to residential and effective move for legislators looking to pre- non-residential concrete buildings that are vent another catastrophe like the Champlain given that the laws and awareness around more than six stories tall, and requires prop- erty owners and condominium associations such event is extremely unlikely, say the ex- to hire—and pay for—a licensed architect or perts, the country’s housing stock is aging, ings of a certain age, administrators need to engineer to conduct a visual structural inspec- tion every 10 years, and façade inspections ev- ery five years. The structural inspection must And costly. examine all foundations, balconies, structural members, and waterproofing conditions of a be avoided,” says Robert Nordlund, PE, RS, acceptable.” building. The façade inspections must assess founder and CEO of Association Reserves, a all exterior walls and appurtenances, and ap- plies to masonry-constructed buildings over advises community associations and coopera- four stories as well. Building owners must tives throughout the U.S. “It’s an issue facing not just about building buildings—it’s about then submit a written report to the city’s Di- vision of the Construction Code and make associations need to get ready for higher ex- any repairs indicated in the report. Another penses, which will likely mean higher reserve owners and buyers. inspection must take place within 30 days of contributions, special assessments, or loan re- completion of the repairs. “Since the sad news from Florida,” says Fu- lop, “we’ve had Jersey City residents in several laws should consider how to help associa- buildings reach out with the knowledge that tions and corporations pay for these essential their condo boards are delaying work because repairs (low- or no-interest infrastructure aging infrastructure that “In many cases, the while not entirely kicking the can to future however, the community delayed correcting action deferred the maintenance and turned and elsewhere have observed that buyers of Stronger and more frequent inspections— deliberative impasses that many boards are senting multiple large South Florida devel- facing. In fact, it has been argued that it was opments, and a board member of the Miami delayed repairs that cost 98 people their lives real estate publication and destroyed the homes of hundreds of oth- and opined on their urgency; the board had based in Fort Lauderdale, sees similar scrutiny priced out the cost of the work and commu- nicated it to the owners. But, just as the FCAR that “some high-end property buyers must ate a modest special assessment in an emer- long-term maintenance, i.e., higher regular Champlain Towers South understandably more than one conversation regarding a cli- Laws focused on reserve requirements and building.” regular capital assessments seem like a more Towers partial collapse. Although another building guidelines and regulations have and and predictable repairs and replacements— not to mention emergencies—are inevitable. he adds, “those with owner-run condo asso- “Getting old is expensive, and cannot get ahead of potential issues now deemed un- California-based reserve study company that do well to take the Surfside tragedy as a lesson every association with common areas. Older building strong, cohesive boards; beneficial, payments.” Rather than adding cost and red tape, new pass these costs on to the ownership in ways Building Better Buyers Speaking of future owners, this is another co-op and condo homes are now giving due time to due diligence. Alicia Cervera, managing partner of Cer- Mansion Global that she sees more buyers investing themselves in discovering the construction history and maintenance in a given building. “The lesson learned from this horrible tragedy is that closer attention needs to be made to the maintenance of these build- ings, and condo associations have to make sure they’re properly funded to meet the maintenance needs,” says Cervera. “I think that we will emerge stronger and safer as a result of this since there will be stricter guidelines and more caution around build- Ricardo Wolf, a broker and developer of being paid to new developments. He contends have concerns on how a given development was designed, planned, engineered, and con- “In the past, many buyers might’ve simply ent’s comfort level of moving into a high-rise While Wolf stresses that the concern about new construction can be seen as premature, will continue to only get more strict, in build- step it up. “When discussing older buildings,” ciations will be pressured like never before to The multifamily housing industry would and a warning. Building these communities is effective laws; and informed and engaged n Darcey Gerstein is Associate Editor of Co- operatorNews. BUILDING BETTER... continued from page 23 “Getting old is expensive, and cannot be avoided.” —Robert Nordlund, PE, RS A generation ago, that would be a non-issue, Beauchamp continues. “When \[these buildings were\] originally con- structed or converted to co-op or condo ownership, there wasn’t extreme weather or major flooding to worry about, so lit- tle thought was given to this problem. We have never seen before what we have seen over the last couple of years. We didn’t know we needed to be prepared to make accommodations for this; there were lots of discussions, but nothing was imple- mented, because it didn’t feel urgent.” Beauchamp goes on to say that “for a co-op or condo, this problem is similar to capital improvement projects. We can’t put off addressing them the way we did in the past. From the perspective of a board, the question is, ‘What can we do to pre- vent a disaster? Who do we bring in to do the work, and how do we pay for it?’ A likely concern for boards is the possibil- ity of a maintenance increase or special assessment resulting from a flooding in- cident, so they should consider a finan- cial plan to address the problem.” One community that saw the writ- ing on the proverbial wall is Rockaway Beach’s Shore View Condominiums. The grouping of seven townhouse-style buildings with a few apartments in each and shared walls suffered massive flood- ing of its basements during Superstorm Sandy back in 2012. The 20-unit com- munity didn’t have flood insurance, and when they tried to repair and rebuild, they faced multiple hurdles. Fortunately, a local landscaper and resiliency expert worked with the association pro bono to design a storm mitigation plan, and brought in an engineering firm to design a “resiliency garden.” The design includes protective sand barriers with native flora and flood doors that can be closed dur- ing storms, preventing water from reach- ing the buildings. According to one Shore View board member, “We came back, and rebuilt our building better.” Along with financial and long-term planning, Andy Leight, senior vice presi- dent of operations at AKAM Living Ser- vices, a management firm with offices in New York and Florida, also advises being ready for the immediate challenges. “You know what the potential ramifications are,” he says. “No power, loss of elevators, etc.—so be as prepared as you possibly can ahead of time with materials that will mitigate the storm. Do you have genera- tors? Make sure sump pumps are oper- ating. \[Have\] glow sticks, bottled water; make sure you’re staffed appropriately, stationing managers there, providing water and then making sure you follow through on that.” FLOOD RISK... continued from page 1 continued on page 26