Page 12 - CooperatorNews New York January 2022

ARCHITECTURE & ENGINEERING SERVICES: - Structural - MEP - Interior Design BUILDING ENVELOPE / RESTORATION / FACADE INSPECTION SAFETY PROGRAMS CONSTRUCTION DEFECT TESTING / INVESTIGATION ENERGY CONSULTING FORENSIC TESTING / LITIGATION SUPPORT NYC SPECIAL INSPECTIONS 5 YEAR CAPITAL PLANNING 350 7th Avenue, Suite 2000 New York, NY 10001 (646) 292 - 3515 info@falconengineering.com www.falconengineering.com ENGINEERS, ARCHITECTS AND ENERGY CONSULTANTS 12 COOPERATORNEWS — JANUARY 2022 COOPERATORNEWS.COM ten sacrosanct—very little can be changed.” can run from basic, ‘no-frills’ type contracts She explains this to her clients when they to all-inclusive. Fees for management are seek her expert advice before entering into a generally fl at, and not based on percentages management agreement. “Like any contract, of any kind. As mentioned earlier, some con- though, the standard management contract tracts allow for certain services outside the should contain start and end dates and fi - nancial considerations, as well as the role corporation or association additional fees and duties of the manager.” Th e expectations for those services. Th e legal pros we spoke of the client—in this case a co-op corpora- tion or a condominium association—should visions should defi nitely be included in any be clearly delineated. What’s Typically Included Th e scope of the managing agent’s or fi rm’s work, including their compensation and any caps on decision-making author- ity they may have, must be included in the says Hakim, “we always suggest having a contract. “Management agreements are used frank conversation with the upper manage- to exclusively appoint the agent to run and ment of the company, and perhaps even hav- operate the building,” says Hakim, “from ing the property manager reassigned. How- payroll, to transfers and sales, to repair mat- ters, to the supervision of employees. For ex- ample, many boards will allow agents to enter into contracts— for repairs and sup- plies costing up to $2,500, say—without the board’s involve- ment, though that fi g- ure may vary depend- ing on the size of the building. Not having to stop and revert back quite rare in a management agreement for a to the board for small decisions facilitates co-op or condominium to see any penalties, more effi cient and eff ective operations.” Greenstein recommends that a contract “designates the individual to be assigned to terms of the agreement, such as the agent the building by the management company,” acting outside the scope of their author- along with “a provision giving the board the ity under the contract, mismanagement (or right to demand a change if it is not happy worse) of funds, or willful default of the with that person aft er \\\[they’ve had\\\] a reason- able time and chance to correct any defi cient or condominium to dissolve a management behavior.” Piekarsky agrees. “You will be assigned or fi nancial penalties might be incurred, a specifi c manager,” he says, “and you will “someone can always assert a claim against like or hate that manager—so you want to another person or entity,” Greenstein says. include in your agreement the ability to in- terview your replacement manager, not just breach or default and then damages. And if simply be given one—especially if there was successful, then they would have to seek to a poor relationship with the previous one. enforce a judgment if obtained.” It’s also important to consider that managing agents leave companies, and if your building nation of an agreement upon 60-day notice, is faced with that situation, you want to re- tain the right to interview a replacement as nation is for cause, there is a 10-day notice well.” “Another essential provision,” says Green- stein, “is requiring the managing agent to broken management contracts rarely end up notify the board of violations placed on the in court. “Ninety-nine percent of the time, property, and of any condition in the build- ing or property which is known to be unsafe, management and the condo board would or would be a violation if noted by any gov- ernmental agency.” Also, “a board should be very specifi c as to what they want and need, particularly with respect to inspections and site visits,” adds Piekarsky. “You won’t get more prop- erty visits than what the contract dictates.” Th e length or term of property manage- ment contracts is usually one to three years. Shapiro notes that in Massachusetts, the state limits the length of management agree- ments to no more than three years. Services contract to be rendered, but may charge the to for this article all agreed that renewal pro- management contract, but should defi nitely not be automatic. Parting Ways Breaking a management agreement is never an easy decision. “Before doing so,” ever, when it becomes necessary, the exit agreement must be reviewed to ensure that a timely termination is sent. Generally, a building will have a right to terminate upon 30- or 60-days’ notice without cause. Th e building is gen- erally only liable for the costs to the date of termination. It’s but again, the agreement must be reviewed.” Greenstein points out that “breach of the agreement,” can lead the board of a co-op agreement before its end. As to what legal “Th e board would have to prove there was a Massachusetts regulations provide termi- explains Shapiro, adding that “if the termi- requirement with an opportunity to cure.” Piekarsky notes that disagreements over there can be a negotiated resolution. Both have to hire lawyers to go to court. Litiga- tion isn’t cost eff ective.” Proceed with Caution When changing managing agents or fi rms, say the pros, keep in mind that you’re seeking a seamless—or near seamless—tran- sition. Hakim relates one not-so-seamless example that demonstrates why it’s impor- MANAGEMENT... continued from page 1 “Imagine a condominium unable to pay its bills.” —Mark Hakim