Matthew

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

Years ago, when someone visited a friend or relative in many New York apartment buildings and were too impatient to wait for a response, they would push all the buzzer buttons in the vestibule. There was no voice intercom or video and people had less fear of strangers.

Fast forward to today and what it takes to get into high-rise buildings. In many, there are doormen who, depending on the building and its regulations, ask for the guest to sign in and then call up to be certain they are expected.  In addition, many buildings have acquired more sophisticated technology to increase security.

Security has been a concern in residential buildings for a long time. It increased dramatically after 9/11 as managers, boards and insurance companies realized more could be done and residents demanded an increased sense of safety. Spurred by the attacks on the World Trade Center and advances in technology, a new industry of residential security was born.

Prior to 9/11, much of the security in many properties involved the old closed circuit TVs with their time-lapse, grainy pictures that someone had to monitor and were more useful in trying to identify unwanted visitors after they had left than being useful in stopping an intrusion.  Some buildings required building staff to accompany a delivery person to an apartment or have the resident come down.

Now, new high-definition cameras provide increased photo clarity, hard drives have more capacity, motion-sensors that can eliminate viewing in dead times and longer recording times. With some systems the images can be downloaded to a smart phone so superintendents on their rounds can view the cameras when alerted to someone entering an unmanned door.

Almost all high-rise co-ops, condos and luxury rentals, have full-time doormen and even concierges.  Increasingly, buildings are adding computerized systems that keep track of all visitors, and provide information on who is allowed into the apartment when the resident is out such as housekeepers, contractors or relatives.

In addition, many buildings have added package/messenger rooms where a delivery is left and then taken up by staff or picked up by the resident, who can be alerted that the package has arrived.

Buildings without doorman, such as one we manage on lower Broadway, have advanced camera and voice intercom systems.  Built in 1915, the co-op, has 44 loft units on eight floors. To upgrade the system, we had to retrofit the building to handle the advanced technology.

Some buildings have installed an electronic offsite doorman that uses the internet for video security, electronic access control and alarm monitoring.

Although set up like a video intercom, the system is staffed by real people who monitor the door remotely. If at home, the resident can see who the visitor is and choose whether to let them in.  If the resident is not home, a live person speaks to the visitor.  If the visitor is authorized to enter the apartment or is a delivery man leaving a package, they can be let in.  If not approved, they are denied entry. The system’s cameras can follow a person while in the public areas of the building.

A more recent high-tech approach uses facial recognition software. The system unlocks the door for residents and approved visitors by identifying their faces. If the resident is not at home, they can be notified of visitors who can be let in by the resident using their mobile phone. (A similar system works by identifying the iris of one’s eyes.)

Some properties we manage have begun using key fobs which provide access, security and a record of use.  The fob permits entry to the building, can activate the elevator and if programmed can designate the specific floor, plus provide access to the apartment.  The system maintains a record of whose key fob is used and the time. If, for example, a housekeeper or nanny, who has a fob, enters the building or apartment at a time when they are not authorized, there will be a record of it.

Doormen would seem to be the preferred route for security in a building, but some residents prefer buildings without them for both financial and privacy reasons.  For example, they don’t want a doorman to know when they come and go, what deliveries they get or who visits them.  Additionally, some residents dislike the increased use of cameras and other technologies for the same reasons.

We are cognizant of the various preferences of residents, but, above all, our goal is to make the buildings and their homes as safe as possible.

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

In the frantic rush to purchase their dream home, co-op buyers often fail to review carefully the building’s proprietary lease. This can lead to problems down the road.

For instance, does the co-op’s proprietary lease permit a buyer who is a consultant to use a second bedroom in the apartment as an office? Maybe. Some buildings allow business uses if it does not involve significant traffic.  Non-permitted uses could include a daycare center or a psychiatrist’s office.  Other buildings restrict all businesses, even those of a self-employed graphic designer or a writer.

The proprietary lease, required in all co-ops, in effect establishes a landlord-tenant relationship between the co-op corporation and the shareholder. It is important to remember that in a co-op the buyer is purchasing shares in the corporation and not actually buying the property as in a condominium, which does not have a proprietary lease, but has other documents. This article focuses on co-ops.

What is included in the proprietary lease?

The proprietary leasecovers maintenance and repair obligations along with such issues as permitted uses, subletting, alterations and transfers. For instance, what are the requirements for subletting an apartment?  Does the co-op permit it, does it require board approval and does the board need to approve the sub-tenant?

Without a well-crafted proprietary lease covering a myriad of regulations and circumstances, a co-op can find itself on the losing end of lawsuits with individual shareholders.  Some argue that the initial proprietary lease is often weak because it was drafted by the sponsor who wanted as few restrictions as possible. Whatever the reason, cases abound where a shareholder obtained judgement against the co-op because the proprietary lease did not contain, or was not sufficiently specific about, an issue.  This has included such basic matters as who is responsible for damage caused in the apartment from a leaking pipe in the walls or an upstairs apartment, the fee policy for sublets, evicting a shareholder or subtenant for excessive noise, and payment for an ancillary service, such as a storage bin.

Boards should review the proprietary lease to be certain it is up-to-date and includes protection for the co-op and its shareholders. With the advances in technology, the changing ways of doing business and increased government regulations, many proprietary leases are obsolete.  Additionally, financial institutions often will not provide financing for buildings whose proprietary lease expires in less than 35 years.  If the proprietary lease expires, the building ceases to be a co-op.

Items that should be included include shareholder repairs, who is responsible and for what; damage to the apartment from leaks from outside; terrace and roof damage; late fees; house rules, is there a mechanism to enforce them; who can live in the apartment; subletting, does the board limit sublets; transfer fees and a flip tax, there must be specific provision; alterations, do they require board approval; insurance, what type is the shareholder required to have; and access to the apartment if the shareholder refuses to provide a key to the building.

To ensure the proprietary lease contains wording that protects the co-op, and also individual shareholders, the board should ask its attorney to review the lease and propose changes.

If desired, a board committee can be formed to work with the attorney.  In recent years, there has been a proliferation of lawsuits involving a board and also between shareholders. The board should consider including a format for arbitration as a way to more quickly settle these disputes and at less cost.

Once the board has approved the changes, the amended lease goes to a vote of shareholders.  If the vote includes changing the term of the lease, a super-majority (which could range from 66 to 90 percent depending on the expiring lease) is required for approval.   Otherwise, it’s a simple majority. While it would seem that all shareholders would favor updating the lease, there often are objections to provisions regarding the flip tax, subletting policies, alterations and repairs.  For instance, if several shareholders are contemplating subletting, they would argue for the most lenient requirements, while a shareholder with a family might argue for the most stringent rules.

We advise the board and its advisers to maintain transparency and provide informational updates.  Having an opaque process and then handing the revised lease to shareholders demanding a positive vote can result in a negative reception and extended fight for approval.

The board should authorize periodic reviews of the proprietary lease so it stays current with recent court decisions and changing government regulations.

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

Most of us tend to think of winter as chillingly cold with frigid winds, snow-clogged streets and in recent years snow-caused delays in mass transit.

Not many think of the impact winter has on buildings.  Few, that is, except experienced property managers.  Our responsibility is to see that the buildings operate smoothly and efficiently during blustery and frigid December, January and February days and the possibility of damage is minimized to the structure, both the interior and exterior.

While our asset managers and building staffs are vigilant throughout the year to ensure all systems are operating properly and necessary repairs are made when problems arise, we pay special attention during the fall to make certain that we are prepared for the winter days.  There are numerous items on our checklist.

One essential matter is to bring in a professional boiler company while the heating systems are down during the summer.

The companies clean the boiler, inspect to see what repairs, if any, are required and then test the systems. Failure to do this can lead to a breakdown during a frigid day and increased expense, and dirt build-up in boilers can significantly reduce their efficiency adding to the gas or oil bill.  In recent years many of the properties we manage have converted to gas, which is a cleaner fuel and reduces both maintenance costs and the possibility of dirt build-up.  Fuel usage is monitored during the winter months to see if there is a non-weather related significant increase. This often is a sign of problems with the boiler or the delivery system and can be an early alert system to make repairs.

We also check insulation on pipes and the heating equipment to reduce the loss of heat and maintain maximum efficiency.

The basement is another vulnerable area in winter. Along with damage to frozen pipes and strain on the boiler, winter can cause havoc on brick and mortar. A small hole in the exterior can burst open from winter temperatures and wind, wasting energy and causing expensive damage. Building staffs inspect the basement for even minor damage to bricks and mortar.

Another important area we inspect is the roof.  We make certain all debris is removed and the drains are clear.  Often during cold spells, snow and ice freezes on the drains and when they thaw, the drains can’t handle the flow and it can seep into the roof or units and cause damage.  It’s similar to roads when potholes form after water seeps into a crevice and ice forms, expanding the hole. The ice then thaws and more water seeps in weakening the surface. This pattern can be repeated eventually causing leaks and causing leaks and weakening the structure.

Another high up area to check is terraces.  Residents should follow the same procedures to see whether drains are clogged and barriers need repair.

Many buildings have roof-top water tanks. These should be monitored. If any controls that operate the wood tanks and the piping aren’t properly insulated or protected, water can freeze within the tank.  Slight leaks on the tank can freeze and expand the wood leading to damage when the ice thaws.

If the building has window air conditioning units that stay in year-round, we work with the residents to be certain they are properly sealed during the winter to prevent draughts and the loss of heat. If the units are removed, we ask residents to notify building staff so we can check to see if there is damage to the casement which would also lead to draughts and loss of heat.

Exterior water lines exposed to the cold are shut down and drained to prevent the pipes bursting during extreme cold.

Units with working fireplaces need to have them professionally inspected and cleaned prior to the winter when they receive the most use.  The flew damper should be checked to be certain it is open and operating correctly to prevent a backdraft that can cause serious smoke damage to walls, furniture and paintings.

Winter preparation includes checking supplies so the building is prepared for a snow storm.  We want to have adequate sand and sidewalk ice melt to last through a heavy snow season and not have to scurry around to find more when it is needed.  We check to insure there is sufficient snow removal equipment.

From experience, we understand the importance of taking the steps discussed above, and others, to ensure that the residents of properties we manage have a warm and safe winter.

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

Many residents of co-ops and condos as well as boards of the properties are unfamiliar with all the intricacies of homeowners’ insurance.

There are many misconceptions about what is covered and for how much. Boards, in particular, need to be aware of new types of coverage.

For residents, I am reminded of a recent discussion with Robert Owens, president of the insurance broker The Owens Group.  He told me about meeting a couple whose co-op suffered severe water damage from an overflowing bathtub in an upstairs apartment.  The family needed to move out of their home while repairs could be made. This is where their real problems began.

As Owens related the story, the couple lacked sufficient insurance to cover their out-of-pocket expenses, replace furniture and other items and to repair the damage.  The insufficient coverage combined with the house rules of their building created numerous problems.  Their policy did not cover the cost of staying in a hotel if the damages could be repaired fairly quickly, or the rent for an apartment if they faced an extended period as well as other expenses related to their temporary relocation. Some luxury buildings allow construction and extensive repairs only during a three or four-month period during the summer when many residents are away.

Many people, Owens pointed out, try to save on their premiums by underinsuring their personal property and improvements.  In addition, many fail to insure for replacement cost and rather than having the insurance cover the cost of replacing the items at current value, they get only the initial value less depreciation which, depending on the age of the item, can be a significant difference.

Others also assume that the party at fault will be responsible for the cost of the repairs.  This is not the case in many properties, especially those at the high-end. Many co-ops and condos have subrogation clauses preventing the injured party from suing the responsible neighbor for accidents such as flooding caused by a broken pipe or an overflowing bathtub.

So, what about suing the building. Not viable. The condo or co-op association is responsible for occurrences outside the walls of the apartment in the public areas. It is not responsible for damage in the units unless the building was a direct cause of the problems and that varies from building to building depending on the house rules.

From experience, I know that boards need to stay current on new coverages and those that have become important in recent years.  Here are two examples.

Pollution coverage, which is a separate policy taken out by the co-op or condo board, has become more popular in recent years. This coverage provides protection in the event of an environmental accident or problem such as oil overflowing into the basement during a delivery because the deliveryman overfilled the tank. The coverage would pay for cleanup, any health issues caused to staff or others and any other problems related to the accident or from vapors.  Other incidents include oil burner leaks and the release of carbon monoxide

In the wake of the vast destruction caused by Super Storm Sandy has come an increased emphasis on flood insurance.  Buildings in areas close to the ocean such as in the Rockaways and Coney Island have experienced large increases in their flood insurance premiums.  The storm has caused properties in many other areas which never considered flood insurance to re-evaluate and look to obtaining the coverage. Why?  A vast number of buildings and their residents suffered losses from the extensive loss of electricity when a Con Ed substation flooded and knocked out power in a wide swath of Manhattan. As the buildings and residents lacked flood insurance, they couldn’t collect. In addition, numerous buildings in Lower Manhattan suffered severe flood damage and could not collect.  While Sandy has been called the once in a century storm, with the increase in global warming and rising sea levels insurance brokers and agents are now taking a closer look at whether to recommend the coverage to clients. Flood insurance is excluded from basic policies and must be added on.

My advice for co-op and condo owners is to meet with their insurance agent or broker every year to go over coverages and see if theirs is sufficient.

Insurance is a cyclical business with premiums influenced by many factors including major occurrences such as Super Storm Sandy or devastating hurricanes such as Katrina which ravished the Gulf Coast a decade ago.  These major occurrences have an impact on insurance premiums throughout the nation.  In recent years, Owens said, rates have been fairly flat though the rates can go up if there have been several occurrences when the homeowner or building filed claims.

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

Over the past decade, New York City has become more vigilant in enforcing building elevator codes and requiring additional safety steps.

Several factors have come into play including widely publicized elevator accidents, a movement by the Department of Buildings (DOB) to upgrade codes and inspections, and increased awareness by residents about elevator safety and demands for assurance they will have a safe, unimpeded ride.

There is less tolerance of elevator problems, particularly in older buildings. Breakdowns, which force residents to climb stairs, and poor elevator service can have a negative impact on a property’s value.  Formerly, the expected useful life of an elevator system was 25 years, but that had been reduced to 18-20 years as buildings want to take advantage of new solid-state computerized technology, comply with the increased DOB safety requirements and satisfy residents’ requirements for safe, reliable service.

New building codes that became effective in 2009 completely revamped the inspection and testing procedures for elevator and escalators. The revised codes required annual rather than bi-annual inspections, frequent tests and third-party witnesses.

As part of the continuing DOB program to improve elevator safety, the city in recent years instituted several new requirements. The first, which went into effect on January 1, 2016, involves brake maintenance.  The new regulation requires annual maintenance and inspection of the brake system by a licensed elevator repair company.  This includes all the hardware components of the brake system as well as any devices and/or controller software to monitor the system.  Records must be kept of the maintenance performed and a metal tag must be placed on the controller indicating the company that performed the maintenance and the date of service.  Needed repairs must be made and tested prior to attaching the metal tag to indicate the elevator has passed inspection.

A second change, which may have been motivated by an accident in 2011 when the elevator suddenly lurched up with the door open fatally trapping the victim between the car and the wall. The new regulation requires an upgrade in the door-contact monitoring. This involves installing software/hardware to the existing controller.  In effect, the requirement calls for an additional safety feature that would prohibit the elevator from moving until the hallway and cab doors are firmly closed. This is a significant upgrade over the previous regulations and for the most part involves all elevators installed prior to 2000. The estimated cost would be approximately $15,000 to $20,000 per elevator depending on the work and controller required. The regulation applies only to automatic doors, not those manually operated. The change must be completed by January 1, 2020 and requires a permit from the DOB and certification of work completed satisfactorily by a third-party licensed elevator consulting company.

The final new regulation, effective in 2025, involves the replacement of single-plunger machine brakes for traction elevators with a dual-plunger system adding a second level of back-up prevention. About 10 percent of the elevators in the metropolitan area are involved. 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, this acts as a vital safety device.

Elevators involved are primarily Armor or Westinghouse systems installed in low rise buildings of six or seven floors and from the 1960s and 1970s.

Many would need to be replaced, if they haven’t already as the life span for such elevators is normally 25 years. The cost to upgrade the units to comply with the code would be about $15,000 for the new brake and about the same for the rope gripper.  Thus, serious consideration should be given to replacing the machine. Indicative of the changes in technology are recent rules from the Fire Department requiring new signage in the main lobby of a building. The new code requires that signs must indicate the location of the mainline disconnect switches for that elevator.  The rule is necessary as new elevator equipment technology and building design allow for controllers of different elevators to be in remote motor rooms.  Previously, the machines and controllers for each elevator were in the same room or adjacent to the hoistway. 

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

It’s something on the minds of most co-op or condo buyers.  What can they do to make their home fit their needs and living style?  Some renovate before moving in, while others wait. Either way, the road to a successful renovation is filled with barriers and potholes, particularly in New York City with its strict regulations and board requirements.

While requiring perseverance and planning, it is possible to bring a quality renovation in on time and within budget. To do so requires having a clear understanding of what is wanted, working with the right people, anticipating what is needed and a bit of luck.

Working with David Katz of Katz Architecture, a design/management/consulting firm who has more than 20 years of experience in apartment renovations, we have created a list of 10 steps that a homeowner should follow to try to ensure a smooth project without breaking the bank.

Top 10 Tips

1. Make sure what you want is possible. For example, can a bedroom be added legally as there are requirements for space between the window in a bedroom and an adjoining wall? Can a bathroom be added, the kitchen moved or two apartments combined?
2. Have the drawings for the project as complete as possible to avoid costly change orders and overruns and to show compliance with the building’s alteration agreement. Change orders, even seemingly minor ones involving the type of flooring or counter tops, can greatly jack up the cost.
3. Renovations by nature are unpredictable so it would be unusual not to find some surprises: hidden structural columns, pipes in unexpected places, long-forgotten wall finishes, the occasional extra pocket of space. Do your homework and speak to the super, make probes in the walls, find out if anyone in the building did what you want to do. These steps can prevent a number of costly shockers. But even the best foresight and preparation can’t preempt every problematic find. It is wise to assume a contingency of five percent of the construction cost to deal with the hidden situations.
4. Assemble the right team, including the architect, contractor and subcontractors and make certain to vet them thoroughly through references and seeing their work on completed projects. When soliciting and reviewing bids make certain the contractors have experience in the type of work you need as well as being familiar with city codes. You don’t want someone learning on your job.
5. Have a realistic schedule, including allotting sufficient time for the building to have an engineer and architect review the plans. Some high-end buildings have black-out periods when construction is not allowed. Failure to incorporate these dates and times, if applicable, can cause serious delays and added expense.
6. Understand what plans need to be filed and permits/approvals obtained. While the professionals hired should know this, knowledge of this by the homeowner helps prevent missteps that can cause significant delays and I repeat, delays cost money.
7. If the project is undertaken while the family is living in the apartment, they should consider moving out if the work is complex and requires moving walls or demolition. It is uncomfortable and unhealthy to live in a place with dust and debris and having the workmen work around the family’s living space can add time to the project and in the long run cost more than having a temporary residence.
8. Almost any renovation involving construction will cause noise and possible annoyance for neighbors. One way to try to forestall problems is to work though the building management to communicate with neighbors to explain the scope of the project, what they can expect and to listen to their concerns.
9. If the project is filed with the Department of Buildings, period inspections are required. The general contractor needs to maintain a schedule of these inspections.  One good method is to hold periodic job meetings with the contactor and subcontractors as well as the design people to be certain all are on the same page and the inspections are being conducted.
10. When the project is completed make certain all required inspections are completed and certificates are obtained before releasing the final payment. Certification requirements for a completed job can lapse after time causing additional paperwork, expense and delay when the apartment is sold.

Following the above steps is no guarantee that Murphy’s Law will not apply at some point, but they provide a sound methodology to avoid the pitfalls that have hampered numerous apartment rentals.

Important Notes:

• Have a contingency of five percent of the construction cost for hidden situations.
• Assemble the right team including the architect, contractor and subcontractors.
• When the project is completed make certain all required inspections are completed and certificates obtained before releasing the final payment.

By Marianne Schaefer
for Habitat Magazine

A Co-op’s Long Flooding Nightmare Is Over

For years, a rainstorm meant one thing for the 235-unit York River House: the city’s inadequate storm drains would fill up, and the basement would flood. “It didn’t even have to be a torrential rainstorm,” says Jacqueline Stein, president of the co-op board. “Just a large rainstorm would flood the basement of our building. Depending on the weather, this could happen more than once a week, but it definitely happened multiple times a year.”

The York River House basement houses a laundry room, gym, playroom, bicycle storage, mechanical rooms, and a storage room. “When the water entered the basement, we had to shut down the elevators,” says the co-op’s property manager, Ira Meister, president of Matthew Adam Properties. “We had to shut down the boiler, and we had to move cars around in the garage. People were not able to use the facilities, such as the laundry room, sometimes for a week or so. It was very bad. Sometimes it was a few inches of water, sometimes a couple of feet, and I think this happened ever since the building was built in 1960.”

Board and management tried for years to get the city to fix the problem. City inspectors came and inspected, city workers came and seemed to do some work, but the water kept coming in.

The board hired plumbers, but nobody found a solution to keep the water out.

The staff at the 18-story building, located a block from the East River, had developed a time-consuming protocol. They constantly monitored the weather forecast, they employed alternative damming and draining methods, and they had equipment to clean up after storms.

Then one day, Meister happened to meet a crew from a private, New Jersey-based company called Municipal Water and Sewer. Workers agreed to visit York River House, and they discovered that, in addition to sitting in a low-lying area, the building had a drain that was inadequately pitched. The board brought in an engineer from Jack Green Associates, and the retrofit began.

The drain was reconfigured. The basement floor was opened up, and two large tanks were installed. Ejection pumps now force any water that accumulates in the tanks out into the city’s storm-drainage system, while backflow-preventer valves keep water from the sewers from entering the building. Problem solved.

The job cost about $300,000, which was paid out of the reserve fund. In addition to obviating constant outlays for post-storm clean-ups, the new system led to a reduction in insurance premiums. A win-win-win for the co-op.

According to Meister, similar systems are often installed in new buildings to avoid flooding, but such retrofits are rare in the basements of existing buildings. Adds Stein, “This solution involved a lot of work and was expensive. They had to go through the concrete [basement floor] in several areas. But we have not had a problem since.”

Many other buildings in this seaboard city are not so lucky. The city’s outdated infrastructure all too often cannot absorb heavy rainfall, and the problem is exacerbated by global warming and the rising sea levels that come with it. Costa Constantinides, chairman of the city council’s Committee on Environmental Protection and a major proponent of the new Climate Mobilization Act, recently told The New York Times: “Floods that are smaller but far more frequent than the catastrophic ones brought on by Hurricane Sandy are already overwhelming sewers, sluicing pollution into waterways, and damaging neighborhoods.”

PRINCIPAL PLAYERS :

ENGINEER: Jack Green Associates. CONTRACTOR: New York Plumbing, Heating & Cooling. PROPERTY MANAGER: Matthew Adam Properties.