CooperatorNews NY July 2022
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July 2022                                              COOPERATORNEWS.COM  long we’re waiting for necessary parts, equipment, etc., to be de-  livered. In addition to costs having risen, appliances are delayed   and building materials don’t come on time. Asphalt, for instance,   is much more expensive because it’s petroleum-based. Finding   materials in general has become tricky.”   Labor Shortage  Staffing is another problem facing vendors, managers, and   NEW YORK  THE CO-OP & CONDO RESOURCE  COOPERATORNEWS  205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED  For the first time in decades, serious inflation has reared its ugly head. Costs for   nearly everything—including the goods and services needed to operate and maintain   multifamily properties—are up an average of 10 percent. Some sectors, particularly   energy, are up nearly 20 percent. Co-op corporations and condominium associations   are in the same boat as individual households, just at a larger scale. Everything is sud-  denly more expensive. The question is, how to pay for it?  Inflationary Pressure Cooker  “Inflationary pressures affect many aspects of the real estate industry, and it’s top   of mind for co-op and condo owners, board members, and managers,” says Ajo Ku-  rian, a senior vice president with AKAM Management, a real estate management firm   based in New York City and Florida. “The results of inflation and rising costs are seen   everywhere, from basics such as cleaning supplies, to labor costs—consider the recent   32BJ contract for building workers in New York City—and equipment and materials   for capital projects.”   Price pressures are amplified by ongoing global supply chain issues caused by the   pandemic. Despite governmental efforts, those issues have been difficult to mitigate,   and have been even further exacerbated by the war in Ukraine. “Frankly,” says Scott   Wolf, CEO of Boston-based BRIGS Property Management, “we’re seeing more issues   caused by the broken supply chain and the lack of available staff at vendor firms than   with pricing increases due to inflation. Everyone is aware of inflation now, so it’s not a   big surprise when you get the bill. Most are expecting it. The bigger issue for us is how   continued on page 8   Even  though  2022  started  off  with  a   backlog of court proceedings and legis-  lative sessions after months of COVID   closures and related scheduling issues, a   number of cases and bills of interest to   the multifamily housing community have   gone through or are in the process of be-  ing decided. Here are some that boards,   managers, owners,  and residents  should   follow:   NY Co-op’s Procedural Choices    Hinder Its Damages Claim  Attorneys Deborah Koplovitz and An-  drew Freedland, partners in New York   City law firm Herrick, Feinstein, write   in the   New York Law Journal   of a recent   ruling in a case involving Brooklyn co-op   Trump Village Section No. 4 and a share-  holder it claims made misrepresentations   on his purchase application that caused   the co-op to waive its right of first refusal   and thus incur monetary damages.   Koplovitz and Freedland point out that   the substance and procedure of the claims   that the co-op proffered might have played   a role in the April 20, 2022 judgment for   the defendant in the matter of    Trump Vil-  lage Section No. 4 v. Gene Vilensky a/k/a   Gene Vilenskiy   by Justice Ingrid Joseph of   the Supreme Court, Kings County.   The case alleges that the defendant   listed himself as the only occupant of the   apartment he was applying to purchase in   2014, agreeing that any false information   or omission of material information in the   application could result in its rejection,   revocation of its approval, or termination   of the proprietary lease after closing.   After approving the application, there-  by waiving its right of first refusal, the co-  Americans are a particularly litigious   lot, believing as many of us do that we are   endowed with the inalienable right to life,   liberty…and  the pursuit of  recompense   for any slight or wrong done to us, real or   perceived. This tendency is unfortunately   common in the nation’s co-ops, condos,   and HOAs, where the ideals of communal   living and  shared  ownership sometimes   get overshadowed by grievance and strife.    It’s no wonder, really; these are com-  plicated properties containing multiple   households with  shared walls,  common   spaces, and governance—including an   established set of rules, regulations, and   covenants that are often selectively fol-  lowed, unevenly enforced, or both. An   array of entities contribute to their op-  eration and upkeep, including managing   agents, service providers, contractors,   insurers, utilities, real estate brokerages,   and miscellaneous vendors to name just   a few, all overseen by a volunteer board—  and all with a potential axe to grind.   Above all, these are people’s homes, and   often their largest investment, making for   an especially edgy environment.    Emotions Run High in a High-Rise   Attorney David Hartwell, with the law   firm of Keough & Moody in Chicago, has   seen the personal toll that lawsuits can   have on a community. “There are a lot of   emotions surrounding lawsuits,” he says,   “especially when a resident names in-  dividual board members instead of just   suing the association as a whole.” Asso-  ciations and co-op corporations are not   nameless, faceless entities like other busi-  nesses that might find themselves on the   wrong side of a subpoena. When a resi-  dent sues the board, notes Hartwell, they   are bringing a legal action against their   neighbors—neighbors who have volun-  teered their time and energy to govern   the community.   “If there is litigation between a resident   and the board,” says Alison Phillips, vice   president of  multifamily and  commer-  cial for national property management   company FirstService Residential, “that   Inflation, the Supply Chain, &   Your Monthly Charges  Co-ops & Condos Feel the Pinch  BY A. J. SIDRANSKY  The Year in    Co-op, Condo,    & HOA Law  How Courts & Legislatures Are   Shaping 2022—and Beyond  BY DARCEY GERSTEIN  The Impact    of Litigation in    Co-ops & Condos  Do Lawsuits Damage a   Community?  BY DARCEY GERSTEIN  continued on page 12   continued on page 9 

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