CooperatorNews NY July 2022

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