July 2022

Published in MANN REPORT

By
Ira Meister,
President and CEO,
Matthew Adam Properties, Inc.

We read about it daily. Whether it’s a political campaign, bank, corporation, department store or municipal government, computer hacking is a major crime issue. To combat its growth and force corporations to take appropriate steps to protect their data and that of individuals, New York State passed the Stop Hacks and Improve Electronic Data Security (SHIELD) law which went into effect March 1, 2020. With the laser-like focus on the outbreak and spread of Covid-19, attention to this law has been pushed down in our priorities, though it is in effect.

Included in the corporations covered are co-ops and condos which are now subjected to stricter penalties and fines. It is incumbent on every board and management company in the city to actively take steps to comply. This includes establishing procedures to protect the data, selecting an administrator to oversee and implement the program — whether it is the managing agent or an outside service — and reviewing insurance policies to be certain there is sufficient cybersecurity coverage. At Matthew Adam Properties, we work with third-party vendors to administer the cybersecurity of the buildings we manage.

As we have learned, even the most sophisticated computer systems are vulnerable to attacks. Having a basic security program and firewall doesn’t do the trick.

The law requires all businesses handling personally identifiable information to implement reasonable administrative, technical, and physical data safeguards. Failure to comply and if information is compromised can lead to fines, investigations, and lawsuits. Previously, the maximum fine for failing to notify those affected by a data breach was $100,000; under the new law the number balloon to $250,000. And enforcement is expected to be more stringent.

Until now, real estate systems have not been prime targets of hackers. But the systems of co-ops and condos can be a rich loadstone for criminals with detailed information including social security numbers, bank accounts as well as credit history and financial statements. Included in the information to be protected are security codes, access codes, usernames and passwords and even bio-metric information such as fingerprints, voice prints or ocular images. In effect, any information that would permit criminals to gain access to individual accounts or information.

The first step to comply is to review what data is stored, what procedures are in place to safeguard it (are there hard copies that must be destroyed?) and what safeguards are needed.

The Shield law mandates the implementation of a data security program and requires the business (co-op or condo) to include measures such as risk assessments, workforce training and incident response planning and testing.

Steps should be taken to limit the access to data to office computers and not having information on laptops or tablets that can be taken offsite and used in public WIFI areas.

Other areas in the security program include establishing technical safeguards to assess networks, software design, information processing, transmission and storage and measures to detect, prevent and respond to incursions. Businesses of fewer than 50 employees and less than $3 million in gross revenues in the last three fiscal years or less than $5 million in total assets may scale their program based on the size and complexity, the scope of activities and the nature of the information collected.

If the information is disclosed either intentionally or unintentionally, the organization must provide expeditious notices to any individuals affected. This can be done through written or electronic (such as email) notice, or via phone.

With the possibility of expensive litigation and costs if there is a breach, boards should explore adding cybersecurity insurance, which can drastically reduce exposure. Such insurance, which is not expensive, can cover hiring an attorney to defend against lawsuits as well as costs to notify potentially affected parties.

Other expenses that can be covered include crisis management to set up a call center to provide information on specific questions, paying the cost for credit monitoring for those affected, and public relations to assist the co-op, condo or management company to rebuild its reputation. The insurance will also help cover the cost of fines. Compliance with the law is essential, without this insurance companies may not cover the losses.

As technology becomes increasingly complex and criminals more sophisticated in their ability to hack systems, it is essential that boards not only follow the dictates of the new law, but also explore what additional steps may be necessary to protect the valuable information the co-op or condo possesses.

Published in MANN REPORT
By Ira Meister, President and CEO, Matthew Adam Properties, Inc.

I am writing this column at the beginning of May when it is difficult to foresee what will happen in the following months. Will the curve continue downward or will we have a relapse with cases increasing? What and how many businesses will open and at what level? How will restaurants cope? And finally, and probably most important, how will we as residents of this great city respond to the government strictures and the restricted movement.

From the perspective of a managing agent, we need to be adaptable to the changes, but maintain as a priority the safety and heath of the residents and staffs of the properties under management. Until there is a proven and widely available vaccine, we will continue with the rigorous cleaning of all public areas along with many of the procedures we have adopted for delivery of food and other items as well as the access of visitors.

On this we will follow the direction and procedures established by the boards as well as the recommendations of public officials and medical professionals.

Those who are infected with COVID-19 must quarantine in their apartments and should notify the superintendent, asset manager or resident manager. Their identities will be kept confidential, but this will permit us to provide more assistance for food shopping and picking up garbage left outside the apartment door. In addition, if an infected person is going to a doctor or the hospital, we can provide a route for them that will not put others in danger of infection.

We encourage residents to help each other either through organized groups or individually with shopping and checking in on residents living alone, particularly the elderly, even if they are not infected.

As we slowly get back to the new normal, we will be able to begin non-emergency maintenance, but we have asked residents to be patient as in most properties we have delayed most of this work during the lockdown.

One thing that’s been emphasized in this frightening episode in our nation’s history is the importance of planning. While so much is uncertain, we are working with our boards to look ahead. Most boards have a calendar year budget cycle. It is not too early to look at the current budget to see where there might be revenue shortfalls and continue to review policies for non-payment of monthly charges and commercial rent. It will also be helpful to consider options in the event the association requires additional funds.

Another area is construction. Have projects been suspended? What is the impact on these, as well as upcoming projects, whether roof work or rehabbing of public spaces? Which ones can proceed and which must be rescheduled? The same holds true for other capital improvements. What is planned for the current year and which projects should stay on schedule and which should be pushed into future years?

To assist the residents of our buildings, we send a weekly newsletter identifying ways to cope with the lockdown such as links to websites for take-out, exercising, cleaning cell phones, making masks, how long the virus lives on various surfaces and health sites. We also remind them of protocols and general procedures.

The past few months we’ve lived through a script we only thought possible in a sci-fi movie. Who would have envisioned a comatose New York City with restaurants closed, little traffic and TV scenes of Times Square where the number of pedestrians could be counted on two hands? Through it, New Yorkers have risen to the occasion and exhibited the discipline, grit, diligence and true neighborliness that help make our city so great.

Our ability to overcome this unthinkable tragedy shines a spotlight on all New Yorkers. The doctors, nurses, hospital staffs, EMS personnel, police, and firefighters have given their all, and in some cases their lives, in their efforts to save the lives of many. Our asset managers, staffs, superintendents and resident managers, have provided service to enable the residents of our buildings to adhere to the guidelines that seek to keep all of us safe. The essential service workers in food markets, pharmacies and other vital services deserve our great gratitude.

Published in MANN REPORT

By
Ira Meister,
President and CEO,
Matthew Adam Properties, Inc.

Masks, testing and….contact tracing according to most scientists provide the firepower to help defeat the coronavirus. Amidst the often confusing and contradictory information emanating about Covid-19, there is overwhelming agreement that contact tracing is a key tool. As part of our efforts to combat the pandemic, Matthew Adam Properties has created its own tracing system to protect residents, guests and staff in our buildings.

What are our procedures? We maintain a ledger at the front desk with the names of all visitors, vendors and others who enter the building listing who they are visiting and their cell phone number.  We also log which staff have entered an apartment, such as handymen. If a resident is infected with the virus, we know who had been in the apartment.

Currently, we are working to upgrade our efficiency with software to perform the same functions with a system that protects people’s privacy, while providing the necessary information. We are close to finding one.

Our strategic Covid-19 plans include having ready back-up for emergencies.  When a visitor or resident tests positive, we bring in a professional sanitation company that can respond in hours. They use the highest-grade materials, exceeding basic guidelines, and making certain to eliminate residue in the air or on furniture, doorknobs, etc.

This is one of many steps we have taken since the coronavirus charged full throttle into our lives last winter.  We follow CDC guidelines and, as in the case of the ledger, we expanded in certain areas.

Those infected with Covid-19 should quarantine in their apartments and notify the superintendent, asset manager or resident manager. Their identities are kept confidential, but this permits us to provide assistance for food shopping and picking up garbage left outside the apartment door.  In addition, if an infected person is going to a doctor or the hospital, we can provide a route for them that limits danger of infection to others. We encourage residents to help each other either through organized groups or individually with shopping and checking in on residents living alone, particularly the elderly, even if they are not infected. These can be lonely times.

While we impose certain requirements to protect everyone’s safety, final decisions on procedures are made by the boards of the properties we manage. We mandate doormen, concierge staff and all employees to wear masks and gloves. Doormen and concierges also wear face shields along with masks to provide greater protection and protective shields have been installed at desks. Hand sanitizers are stationed throughout the lobby and public areas.

Elevators are cleaned on a regular basis with occupancy limited to three persons.  Public areas are cleaned and sanitized throughout the day using top-grade materials. Whenever possible, we maintain our policy of using non-toxic cleaning materials for the safety of residents, guests and staff.

Staffs are checked every day when they report to work for any symptoms.

We maintain a very conservative policy on deliveries. Except for perishables, we recommend that holding deliveries in our package rooms for about three days. I like to compare this to getting a gift for Christmas or Hanukkah and holding it for the holiday. If it is not perishable or essential, why not be very safe?

While many buildings opened gyms and pools, we follow city guidelines on opening and closing. One issue with indoor health facilities is air quality and having sufficient clean-air intake. Most fitness centers are in enclosed basement or first-floor areas increasing the importance of having an effective air-filtration system.

Boards and residents are encouraged to make recommendations on safety improvements. As with most aspects of this pandemic, from gaining knowledge about the nature of the virus and its long-term impact on those stricken, to the use of masks, social distancing and size of crowds, we are learning each day. As we find and analyze new procedures and guidelines, we adapt those we believe will be useful always following our conservative policy. Even with positive news about vaccines, I believe a strong semblance of normal won’t return for at least a year, so we must be vigilant every hour of every day.

Published in MANN REPORT

By
Ira Meister,
President and CEO,
Matthew Adam Properties, Inc.

On January 1, 2021, a sweeping update of the city’s building codes went into effect covering plumbing, building and mechanical systems along with emergency response, and flooding regulations with a significant portion lifting requirements for elevator maintenance and upgrades.

According to the city’s Department of Buildings, this is the first holistic update of the entire set of NYC Administrative, Plumbing, Building, Mechanical and Fuel Gas Codes since 2014. The more than 600 major updates and thousands of smaller changes were drafted by technical committees composed of engineers, architects, attorneys, planners, tradespeople, representatives, of various industries and utilities, and many others.

One notable change is transferring the responsibility for conducting elevator inspections to owners of buildings as well as co-op and condo boards. The requirement requires the owner/boards to outsource periodic inspections to an approved elevator agency not affiliated with the company performing maintenance and repairs. The changes follow a state comptroller’s audit revealing elevator safety violations by third-party agencies subcontracted by the Department of Buildings when the DOB was responsible for the inspections. The inspection and testing procedures were previously revamped in 2009 requiring annual rather than bi-annual inspections, frequent tests and third-party witnesses.

The new code requires performing inspections during the calendar year at least three months after any Category 1 testing or a previous periodic inspection. For new installations, the initial test must be performed in the calendar year following the final acceptance test. Reporting of the inspections is required within 14 days, and all necessary work to must be corrected within 90 days followed in 14 days by an Affirmation of Correction.

The new inspections can provide boards with information about what upgrades are necessary to comply with a regulation effective in 2025 requiring the replacement of single-plunger machine brakes for traction elevators with a dual-plunger system which adds a second level of back-up prevention. About 10 percent of the elevators in the metropolitan area lack this. The equipment grips the elevator suspension ropes to stop the elevator in the event of a mechanical or electrical failure. If there is unintended movement in the up direction or if the elevator leaves the floor unintentionally with the door opened, the dual-plunger system acts as a vital safety device.

Elevators involved are primarily Armor or Westinghouse systems installed in low-rise buildings of six or seven floors from the 1960s and 1970s. Many systems would need replacement, if they haven’t already done so, as the life span for such elevators is normally 25 years. The cost to upgrade the units to comply with this code would be about $15,000 for the new brake and about the same for the rope gripper. However, if the elevator is not electronically equipped to accept the rope gripper, the building could consider a full modernization, rather than a piecemeal approach.

Other provisions in the new codes for elevators include increasing the minimum dimension of the elevator emergency hatch; expanding the number of high-rise residential buildings requiring emergency voice communication systems; setting clear compliance criteria to ensure greater accessibility and usability for those with physical and intellectual/developmental disabilities; and amending the inspection timeframes for elevators to speed up their return to service.

The sweeping legislation also includes new provisions to reduce dangers at construction sites. These include allowing the use of netting, low barriers, and chain link fencing instead of requiring solid fencing that can create “blind tunnels” for pedestrians; creating a new type of license for advanced crane technology to ensure that equipment such as articulating boom cranes and roto-telehandlers are operated safely; and improved consistency for underpinning existing buildings.

The codes also clarify the documentation needed for a new certificate of occupancy and expands the types of allowed sustainable building materials such as cross-laminated timber and structural composite lumber. Also outlined is a slate of safety enhancements designed to protect tenants and emergency responders, such as greater fire department access and amending inspection timeframes for boilers.

Other updates focused on sustainability and resilience to include expansion of flood zone requirements for critical facilities such as fire, rescue and ambulance departments, police stations, and emergency shelters; new mandates for inspections of floodproofing systems; and added support for alternative energy production processes such as hydrogen fuel cells.

Published in MANN REPORT

By
Ira Meister,
President and CEO,
Matthew Adam Properties, Inc.

It’s been an unimaginable couple of years as a life-altering pandemic has engulfed the world with uncertainty, confusion and misleading information. During the time, we have struggled with overwhelmed hospitals, staggering deaths, questions about the safety of vaccines, perceived threats to individual liberties and conflicting messages about how to combat this battalion of viruses.

Our work lives are evolving, children losing out on vital interactions and stability and all of us suffering from fatigue and lack of control. We have been subjected to often conflicting mandates from city, state and the federal governments, creating battlegrounds between those who support them and those who fight them. It’s tough to sort this all out and as we get accustomed to one set of mandates they change, or we travel across the river to New Jersey with its own rules or north of New York City with others. How is residential management handling this? That’s what I want to discuss.

As I write in the middle of January, we are amidst a dramatic surge in reported cases, though with less severe symptoms but stricter rules on where we can go and what procedures to follow. Confusion reigns in many areas, probably none more than the requirements for employers and workers and their eligibility to continue working. What regulations should both groups follow? While the mission is to protect both workers and the public and keep businesses and other institutions open, there is still much turmoil.

In this light, what are residential buildings, boards, and management companies are doing to provide a hopefully safer environment for staff and residents?

After a series of discussions and negotiations, the Realty Advisory Board and Local

32BJ of the Service Employees International Union, which represents most staff in residential buildings, adopted a memorandum of agreement that set up procedures for buildings wanting a vaccine mandate. Most properties have instituted mandates, including just about all the buildings we manage. In addition, Matthew Adam Properties has adopted these procedures and our employees are fully vaccinated with required two- or one-shot injections. In addition, especially as the Omicron variant has spread, many of our employees wear masks, which are required in the public areas of the building where we have our office.

After the agreement was reached with Local 32BJ, we distributed a letter to staff in buildings wanting a mandate to collect information about the vaccination status of each employee and requesting proof. Those employees not fully vaccinated had to inform us whether an appointment was scheduled for a first or second shot; whether they are seeking an appointment and may need assistance; and if they are unwilling to be vaccinated the reason they are not getting a vaccinated if due to religious beliefs or health conditions.

The agreement gives unvaccinated employees three options:

• An unpaid leave of absence up to four months and within that timeframe the employee can return two weeks after being fully vaccinated with the second dose of the two-dose vaccine or one dose of the one-time type.
• Being placed on a recall list for six months after the last day of work into the same or similar position at their building to the extent a position is available after the employee has either been fully vaccinated and provided proof or the mandate has been lifted for that building.
• If the employee rejects the first two options, they will be separated from employment with a non-disciplinary termination that is neither deemed a voluntary quit nor a termination for misconduct.

Prior to implementation of a vaccination mandate, or in lieu of it, employers may require unvaccinated employees to have up to two PCR tests weekly on non-work time and submit the results to the employer.

Employees will receive paid time to obtain vaccination or booster shots and for any side effects.

The system has worked extremely well in seeking to protect the health and safety of both employees and residents. The Realty Advisory Board and Local 32BJ are to be commended for setting up a procedure that respects individual’s privacy and beliefs while providing for education and one-on-one discussions when necessary. While there was some resistance to it, overall, it was widely accepted and most staff at buildings have been vaccinate

Published in MANN REPORT

By
Ira Meister,
President and CEO,
Matthew Adam Properties, Inc.

The New York City Council has extended by six months the filing date for Phase 1 of compliance with the new gas lines inspection law. Reasons cited for the delay include Covid-19, uncertainty about requirements and lack of outreach by the Department of Buildings.

With the extension, buildings in community board districts 1, 3 and 10 in all five boroughs have until June 30, 2021 to file inspection reports. The previous deadline was Dec. 31, 2020.

The new law, Local Law 152, establishes a timetable for inspection of gas lines and a requirement to notify residents on procedures when a gas leak is suspected. Inspection of gas lines is required every five years for all multiple dwelling residential buildings in the city. For new buildings, the initial inspection would take place in the tenth year.

A master plumber must conduct the inspection and is required to submit an inspection report and certification to the building owner within 30 days. Certification from the plumber must be filed with the Department of Buildings and an inspection report must be submitted to the utility company within 90 days. The law requires the inspection of all exposed gas lines from the entry point of gas piping into the building to individual resident units. Inspections in public spaces, hallways and mechanical and boiler rooms should be conducted with a portable combustible gas detector. Only public spaces that have gas piping or gas utilization equipment are subject to scrutiny.

Failure to comply with the reporting requirements is a major violation and may lead to penalties and civil fines up to $10,000.

Unsafe conditions, gas leaks, non-code compliant installations or illegal connections must be identified in the inspection report. Regardless of submission timetables, all unsafe or hazardous conditions must be reported immediately to the building’s owner, the utility and the Department of Buildings and be corrected.

Local Law 152 was passed in the aftermath of a tragic explosion in the East Village several years ago caused by an illegal gas-line connection and focusing public attention on the lack of inspection requirements for these lines. While the city requires periodic inspections of many building systems, including boilers, elevators, water tanks, sprinklers, gas lines were exempt.

Co-op and condo boards should carefully vet companies to perform the inspections. I am concerned that companies have sprung up without the proper experience. This type of contractor abuse surfaced in the first round of inspections for Local Law 10. Many of us who had been through that sequence of events can work with clients to better understand the law and hire qualified companies. It is important to seek out experienced, licensed companies and not firms born with the new law.

The new law also requires building owners or boards to provide residents with information describing procedures to take when a gas leak is suspected. This notice must accompany a lease or lease renewal, be in English and Spanish and be posted in a prominent place in a common area.

The notice advices residents to quickly open nearby doors and windows and leave the building immediately. They should not attempt to locate the leak, turn on or off any electrical appliances, smoke, light matches or use a house-phone or cellphone within the building. Residents should call 911 to report the suspected gas leak only after leaving the building and from a safe distance. They are then advised to call the gas service provider, such as Con Ed, whose name and phone number is listed at the bottom of the information form.

The city has established a cycle for the inspections based on community board districts. The dates are Jan. 1 to Dec. 31 as follows: 2021, Districts 2,5,7,13 and 18; 2022, Districts 4,6,8, 9 and 16; and 2023, Districts 12, 12, 14 15 1st 17. The due dates for the ongoing inspections will be the five-year anniversary of the previous inspection.

Buildings without gas piping systems are required to file a certification stating this. The reporting timetable follows that of the borough dates and must be resubmitted every five years.

Published in MANN REPORT

By
Ira Meister,
President and CEO,
Matthew Adam Properties, Inc.

The collapse of Champlain Towers in Surfside, Florida, has given rise to an increased focus on how buildings handle finances. For a long-time, management professionals such as myself as well as attorneys, accountants and others have been preaching the importance of sound fiscal practices. Unfortunately, these practices apparently were not followed at Champlain Towers.

These include proper budgeting, sound preventive maintenance procedures, building a solid reserve fund and having a capital improvement plan.

Behind the collapse is a scenario we often encounter in New York: the tension between long-time shareholders/unit-owners and more recent buyers. Often, long-time residents are older with some on fixed incomes. Recent buyers tend to be younger at the prime of their earning lives or wealthier. A board is challenged to determine strategies that satisfy the parties while keeping the building in good shape and moderating monthly charges and avoiding special assessments.

Not all buildings face this issue, but from media reports it was an issue in Florida.

Good fiscal planning starts with the annual budget. The goal is to realistically determine the services the building can afford and then determine a financial plan to cover these expenses, including the level of staffing, amenities or upgrading of certain areas. There must be integrity in the analysis of expenses and income. Underestimating expenses or creating phantom income can throw a budget out of whack. Above all is consideration of the monthly charge and if an increase is required. Poorly planned budgets can force the property to dig into its reserve fund to pay operating expenses, a path to significant problems.

Within this budget framework is the need to properly maintain all systems and equipment. Properties looking to limit the size of a monthly increase will often defer maintenance or look to save by using unqualified vendors or patchwork repairs. This short-term approach can lead to significant expenses down the road, a problem allegedly faced by Champlain Towers.

A key area for vigilance is the reserve fund, money that is kept for capital projects or major repairs. In the past decade or so, with low interest rates, many co-ops refinanced their mortgages releasing additional cash. The smart boards placed a portion of these funds into the reserve fund and paying for required system overhauls or renovations. Having a sufficient reserve fund limits the need for boards to impose heavy special assessments to fund capital projects. According to media reports, the board at Champlain Towers would have required a special assessment of upwards of $80,000 per unit to make all repairs, a figure that would have imposed financial hardship on many unit-owners or forced them to sell.

Some lenders look at the reserve when considering a mortgage for buyers. In fact, purchasers with solid financials have been turned down because the building lacked adequate reserves. This was particularly true after the Great Recession of 2008. A solid reserve fund also broadcasts that the building is well run which helps increase the value of the units. It also permits the board to make improvements to enhance the quality of life for residents.

One way to determine the size of the reserve fund is to prepare a capital budget plan usually covering five years. It is recommended that a professional engineer or architect inspect the building and determine the life span of the various systems and condition of the structure, the cost and a timeline. Included should be the roof, exterior, elevators, boilers and balconies. The capital plan should be updated annually to consider any work that has been done and changes in the condition of the buildings systems as well as changing costs and the balance in the reserve funds.

Some buildings that impose a transfer fee or fee for sublets direct these funds for capital and improvement projects. Other buildings use a small percentage of the monthly charges to replenish the reserve fund. Whichever method or combination a building chooses, it must stick to its plan and not follow the temptation to use these funds for operating expenses to keep a lid on monthly charges.

The second key component for the reserve fund is investing the money. Many properties work with a financial adviser, but they should follow some basic principles in their investment philosophy. Most important is being conservative and preserving capital.

With prudent planning and wise investment decisions, co-ops and condos can have the funds available when needed without putting the squeeze on residents.

While other mitigating factors may have contributed to the tragedy, what happened at Champlain Towers is a warning to all boards and residents of co-ops and condos of the importance of sound financial planning and execution. It’s the backbone of a well-run property.