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Employee Vaccination Mandates

Employee Vaccination Mandates 1080 720 Matthew Adam Properties

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

Deadline Extended for New Gas Lines Inspection Law

Deadline Extended for New Gas Lines Inspection Law 1080 720 Matthew Adam Properties

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.

Lessons from Champlain Towers

Lessons from Champlain Towers 1080 720 Matthew Adam Properties

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.

Lessons Learned from the Pandemic

Lessons Learned from the Pandemic 1024 721 Matthew Adam Properties

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

So, what have we learned in the more than two years of the pandemic? It’s been a time when we had to quickly adopt new systems and procedures to fight Covid-19, analyze what we had in place and move forward. In doing so, we saw that many of the established procedures helped and we found areas where we could improve. The result: property managers found innovative ways to manage and upgraded systems to help keep residents and staffs safe and healthy.

Initially when the pandemic hit, a supply drought created supermarket shelves bare of toilet tissue and paper towels as well as many cleaning and disinfectant products. Those were the days when it was thought the virus could spread by touching a surface. Matthew Adam Properties represents many institutions which have protocols to maintain sufficient supplies. This contrasts with many properties that utilize just-in-time deliveries. We had sufficient supplies on hand for these properties. Importantly, we also had relationships with suppliers of the products and the supply chains, so we could ramp up orders faster than most. We were experienced in ordering and getting the essentials to the buildings as rapidly as possible.

The institutions also had procedures in the event of an emergency, such as elevator protocols that we were able to immediately adapt to our other properties. We quickly established requirements for masks, screening guests based on rules established by the board, and significantly increasing the cleaning of all public areas, including gyms, meeting rooms and children’s playrooms. We are continuing this increased cleaning. In adopting procedures, we followed recommendations from the NYC Dept. of Health and the CDC.

By the way, as part of our green initiative to help maintain a healthy environment for residents and staff, several years ago we adopted the use of non-toxic products in many of our buildings. Residents and staff have overwhelmingly supported this effort.

Going forward we must remain vigilant as we may not have seen the last of Covid-19, with the possibility of unknown new variants. I believe that in the future we will manage Covid as we now manage the seasonal flu, always aware of its presence and taking the necessary steps, including vaccinations, to prevent serious illness and hospitalizations. This requires us, and everyone, to be proactive.

Another area where we learned much is with zoom meetings. We find them more productive than in-person sessions and easier to have a quorum. Now, rather than requiring attendees to be physically present, those who are away on business or personal trips can join the meeting. This reduces the need for postponements. The meetings, interestingly, have become more businesslike with reduced chatter adding a new level of professionalism and fewer interruptions. We email the board package prior to the meeting, giving board members an opportunity to review the material prior to the meeting.

We have also successfully held multiple annual meetings via Zoom for many of the same reasons we made the switch for board meetings. Attendance is greater, as it is more convenient for residents to join via Zoom rather than leave their apartments to go to a meeting, often not held on site. Again, this allows people who are out-of-town to participate and increases transparency.

One final note. We are grateful to the staffs of our buildings and to the employees of Matthew Adam Properties for their performances in this most trying of times. From the beginning, staff at our properties adjusted and went the extra mile with the new guidelines for visitors and residents as well as helping those who were homebound and needed assistance. The years of ongoing training along with the relationships built up with individual employees contributed to the overall quality and caring performances. There were many examples of individual staff going beyond their normal duties to assist residents. Our staff at Matthew Adam Properties, back-office, administrative and our asset managers all met the challenges of the pandemic as we were able to keep building operations functioning.

Ira Meister
President and CEO
Matthew Adam Properties, Inc.
375 Pearl Street – 14th Floor
New York, NY 10038
212-699-8900
imeister@matthewadam.com

 

COVID-Related Legislation Affecting Boards & Managers: When the Law Meets a Pandemic

COVID-Related Legislation Affecting Boards & Managers: When the Law Meets a Pandemic 1200 803 Matthew Adam Properties
BY DARCEY GERSTEIN 14 MAY 2021

Even as businesses, schools, and even entire economies shut down at the start of the coronavirus pandemic last year, the task of running residential buildings and communities never ceased. In fact, it could even be argued that as people were more or less confined to their homes for weeks and months, the decisions made by co-op, condo, and HOA boards and managers had even more impact on their communities than in the Before Times.

Now that widespread vaccine distribution and a federal administration that takes the matter seriously is beginning to flatten and even ebb transmission of the virus in many parts of the country, lawmakers (who themselves were sidelined for a time last spring) are starting to put legislation on the books relating to—or motivated by—COVID-19 and its effects on lives and livelihoods.

Virtual Governance

In New York, a change to the Business Corporation Law (BCL) went into effect just before coronavirus was declared a global pandemic. “This [change] amended section 602 of the BCL to allow for annual shareholder meetings in business corporations to be held virtually,” explains Margery Weinstein, an attorney at law firm Ganfer & Shore in Manhattan. Subsequently, in response to COVID, she continues, “executive orders further amended that you actually didn’t need to have a location specified for a meeting. So the question is: Is the legislature going to codify the executive orders going forward to dispense with the need to have an actual location [in the announcement of a meeting and] some form of in-person meeting?”

In Massachusetts, the state legislature is considering such a bill. House Bill 1416, “An act relative to electronic meetings and voting in condominiums,” addresses the need that boards and owners of condominium units have had over the past year-plus to conduct community business electronically and/or virtually. Matthew Gaines of Braintree, Massachusetts-based law firm Marcus, Errico, Emmer, and Brooks, P.C. indicates that most governing documents of housing associations were drafted decades ago and refer only to in-person meetings of boards and unit owners.

“There’s some question about all these Zoom meetings that boards and unit owners have been having for the last year,” says Gaines. “Are they really valid? So because of that, [the New England chapter of the Community Associations Institute (CAI)] proposed this legislation that basically says, notwithstanding any provisions in your documents that may require in-person meetings, the association is permitted to have Zoom or any type of remote electronic board meetings, electronic unit owner meetings, and electronic voting.” Partially in response to adaptations made during COVID, and partially to modernize governing documents to reflect current realities, this bill “is trying to bring the condominium world here in Massachusetts into the 21st century,” Gaines says.

Nevada is also considering a bill that would provide for electronic voting in homeowners association elections. Assembly Bill 313 has gone through amendments and passed out of committee, advises certified property manager Barbara Holland in her weekly column in the Las Vegas Review-Journal. “If passed,” she says, “this will be an interesting regulation and potentially a difficult regulation as associations will need to protect the integrity of the voting.”

COVID Immunity

In addition to the Herculean effort to achieve COVID immunity through mass vaccination, another type of COVID immunity is being sought by state legislatures in the interest of community association leaders: immunity from liability for COVID-related claims.

In the New Jersey Assembly, according to community association lawyers from the Morristown office of law firm Becker & Poliakoff, there is pending legislation in the Garden State “that would, essentially, offer community associations immunity from legal action regarding any illness, injury, or death from or related to exposure to or transmission of COVID-19 on the premises of a planned real estate development.”

This bill, supported by CAI New Jersey’s Legislative Action Committee, arose from the actions—not all of them popular—that boards and property managers had to take to mitigate the spread of coronavirus on their properties and through their communities. Closure of amenities, mandatory masking and social-distancing rules, suspension of community activities, and strict policies related to elevator capacity, outside guests, and renovations were some of the measures instituted to slow or stop the viral spread in housing communities. But these actions were met with resistance from residents in some cases, and even the threat of litigation. Equally concerned about being sued if they did not enact such measures and a resident became infected on the property, boards and managers found themselves in very tricky legal waters.

So far, as CooperatorNews has previously reported, insurers are not covering for claims related to COVID, so even with Directors & Officers (D&O) insurance, boards and board members can be held financially responsible in the event that a resident, visitor, or staff member succeeds on an action against them claiming negligence or breach of fiduciary duty. They would be responsible for their own legal defense as well. “There are always liability concerns,” says Scott Piekarsky, an attorney with Phillips Nizer, a law firm with offices in Manhattan and New Jersey. “People may get injured due to the pandemic through infection. … A condominium association is a business, and boards have a fiduciary duty to protect the members. We are hearing now that if someone gets COVID and sues the association, insurance will not defend or indemnify. No defense and no payout, until this is adjudicated.”

Passage of the COVID Immunity Bill (A4979/S3584) would alleviate these concerns, and perhaps encourage boards to reopen amenities sooner, advocates argue.

Florida condo and HOA leaders might have less to worry about in this regard now, says Donna DiMaggio Berger, Board Certified Specialist in condominium and planned development law and shareholder at Becker’s Fort Lauderdale office. According to her, SB72, which Governor Ron DeSantis signed into law on March 29, “[Provides] civil immunity to business entities, not-for-profit corporations, hospitals, nursing homes, government entities, schools, and churches for COVID-19 related claims as long as the alleged negligence doesn’t involve gross negligence or intentional misconduct.”

Florida condominiums, cooperatives, and homeowners’ associations are classified as business entities that this bill protects. “However,” continues Berger, “the new law is not a protective blanket under which all associations can take shelter regardless of how they handled this crisis. … The association boards who took steps (and continue to take steps) to comply with local, state, and federal guidelines should be able to rely upon this new law for protection.”

Berger stresses that the law does not provide or imply license for community leaders to completely abandon health and safety protocols in attempts to get back to “normal,” especially as the majority of Floridians remain unvaccinated and viral variants continue to spread. “It is not only reasonable, but prudent for boards to continue to exercise due caution when operating and opening common amenities and enforcing COVID-19 safety protocols,” she concludes.

Planning for the Next Disaster

Although not necessarily a direct response to the pandemic, Rep. Jerry Nadler (D-NY) has committed to introducing federal disaster assistance legislation this year in the U.S. House of Representatives, according to CAI. The Disaster Assistance Equity Act (DAEA), as the legislation is called, would streamline the approval process for the Federal Emergency Management Agency (FEMA) to reimburse local governments for the cost of removing debris from community association roads, and would allow condominiums and housing cooperatives to use FEMA disaster assistance payments to fund critical repairs for common elements.

One thing this year has taught us is the importance of acting quickly, intentionally, and informedly when a disaster threatens the health and safety of our homes and our neighbors. Helping community associations plan for disasters and improving recovery coordination with local emergency management officials will go a long way toward resilience, restoration, and recovery in the face of ever increasing threats from natural and biological disasters.

Managing Exterior Repair Projects; Advice from a Legal Pro

Managing Exterior Repair Projects; Advice from a Legal Pro 1000 1003 Matthew Adam Properties
BY C. JAYE BERGER, ESQ.

Leaks are a common problem in multifamily buildings, including co-ops and condominiums. It’s not unusual to see watermarks and dampness on plaster near or below interior widows, but since such infiltration usually stems from an issue on the exterior of the building – including the roof, cornice area, and other locations – repairs are neither easy nor quick, and are often left unaddressed until there is Local Law 11-related facade work being performed from the outside.

Homework Ahead of Time

Organizing and coordinating these repair projects requires a lot of time, energy and funding. In order to run smoothly, exterior work also requires a lot of planning in advance. Let’s say a building has leaks on the roof and cracks in various other locations. The building will need to first retain engineers to survey the building and ascertain the extent and scope of the work that needs to be done. In addition to a contract, plans and specifications will need to be drawn up, and bids will need to be obtained from contractors for pricing. The final plans will also need to be approved by and filed with the New York City Department of Buildings before work can legally commence.

Even after all of this advance work is done to prepare, it’s still quite common to find ‘hidden conditions’ on a project that require additional work – and money – that’s not accounted for in the plans or the budget. Therefore, when money is allocated for a project, additional funds must be set aside for these inevitable contingencies. Sometimes securing those funds means refinancing an underlying mortgage. In those instances, the advance planning may take over a year – which is why you sometimes see a building in obvious need of repair, and may wonder why no work has been done. The answer may be that the owner or board is still trying to arrange for the financing – though that’s not really an excuse for delaying needed maintenance or repair.

A Necessary Inconvenience

Since exterior repair work is by its nature hazardous and will take a while to complete, most buildings will need to have a sidewalk shed and other protective measures in place to protect the public and workers from any falling debris. Sheds are part of the overall cost of a project, and usually extend 20 feet or so past the building being worked on, onto the adjacent property or properties.

Despite the obvious need to ensure the safety of passers-by and work crews alike, sidewalk sheds are often met with hostility by neighboring buildings and commercial tenants who may claim that the structures block their view and/or signage, and discourage foot traffic.

Sheds are sometimes left in place for long periods of time while a board tries to obtain funding for the needed repair work, or sort out other administrative or bureaucratic issues. For example, in one case a sidewalk shed was interfering with the installation of a handicap access ramp by a commercial tenant – a mandatory safety measure conflicting with a mandatory accessibility measure. Sometimes disgruntled neighbors threaten to take such issues to court, but given the balancing of the issues and the need for such repairs, it’s doubtful a court would order the removal of a scaffolding until the exterior work is fully completed.

Papers, Please?

Among the key documents spelling out the scope, cost, and parameters of a facade project, there must of course be a fully thought-out, well-drafted and negotiated contract with the contractor hired to do the actual work. The contract should articulate the full scope of work, including plans and specifications, and the legal terms and conditions regarding the project. All too often, people show me what they are calling a ‘contract,’ but which is really only a list of the work they want to have done, and a payment schedule. More often than not, these schedules require payment at specific intervals – but don’t say a word about the amount or percentage of work that’s expected to be completed by that time. In a worst case scenario, payment could be due according to the contract, but the work itself could be way behind schedule. That should not be the case – and a competent, savvy consultant can catch (and hopefully correct) such discrepancies during the contract vetting process before the first worker sets foot on the property.

The documentation needed for a major exterior undertaking may also need to include an Access Agreement with neighboring buildings that might be affected by the project. Since this can take time to negotiate, the agreement should be part of the advance planning. The nature and location of the work may be such that materials may need to be moved up and stored on a neighboring roof for easy access. Permission for that type of access needs to be requested, negotiated by knowledgeable legal counsel, and obtained in advance in a written license agreement. Sometimes a fee may need to be paid to the neighboring building allowing the access; to encourage keeping the project on track, there may also be liquidated damages written into the agreement for each day the building needing access is late in completing the work.

Who’s in Charge?

Contracts and specifications for any type of exterior work should be prepared by legal counsel knowledgeable in this area, in conjunction with the project engineer. People need to know who is responsible for performing various tasks, by when, and who is responsible for payment. On one client’s project, the project engineer was supposed to obtain the work permit after the expediter filed the plans with the DOB. The engineer mistakenly thought the contractor was handling that, and valuable work time was wasted until the issue was resolved.

Another client once related that their contractor had failed to obtain a building permit – which the property manager did not realize until after the contractor had walked off the job. The client claimed they didn’t even know about the need for a permit until their new property manager pointed it out. There was also no electrical or plumbing inspection, which meant that the new contractors would need to open walls and perhaps redo already-completed work in order to pass inspection.

Along with vetting contracts, double- and even triple-checking permits and filing deadlines, consulting with your building’s insurance broker before an exterior project gets underway is a good idea as well. Having the right insurance in place that names the correct parties as additional insureds is essential. One building owner told me at a seminar I gave that just as work was ready to begin on their project, they realized they did not have an ‘action over’ insurance provision and had to delay the commencement to sort out obtaining it and who would pay for the additional cost.

The prospect of undertaking – planning, funding, and completing – a major exterior maintenance or repair project can definitely be daunting for any board, regardless of its level of experience. The above considerations are only a few of the many things that need to be kept in mind – but the guidance of experienced legal counsel can help formulate a game plan ahead of time, reduce the chances of something going wrong during a capital improvement project, and keep things on track for a timely completion.

C. Jaye Berger, Esq. is an attorney and Principal at the Law Offices of C. Jaye Berger, based in New York City and focusing on the areas of construction, real estate and co-op and condo law and litigation.

The Backyard Restaurants Are Coming. What’s a Co-op to Do?

The Backyard Restaurants Are Coming. What’s a Co-op to Do? 1920 1515 Matthew Adam Properties
From HabitatMag.com

A backyard restaurant can depress nearby apartment values by 20% or more.

As New York City continues to open up, restaurants are using every inch of available outdoor space to attract customers. The rear apartments in one co-op face a backyard that a restaurant wants to turn into a dining area. Residents in those apartments are worried about noise, odors, vermin and light pollution – as well as the impact on property values. What, a shareholder asks Brick Underground, can residents of such a co-op or condo do?

Options, it turns out, are limited. “A restaurant is always a concern,” says Deanna Kory, a broker with Corcoran. “Buyers don’t love living close by because of the noise and vermin, and it is not great for a building from a quality-of-life perspective. It’s OK if it’s an established place, but the value of a similar apartment without a restaurant could be as much as 15 to 20% higher, or more. The lower the floor, and if the windows face the restaurant, the more the apartment value is negatively impacted.”

This is likely to be a source of anxiety for more New Yorkers than ever, given the number of restaurants that opened new outdoor seating areas over the past year in response to pandemic restrictions on indoor dining. And while this change has helped to save a number of businesses, there are certain drawbacks.

“Unfortunately, vermin are often associated with food establishments,” says Gil Bloom, president of Standard Pest Management. “While proper restaurants have assorted health codes to adhere to, the outdoor dining concept is unstructured and without guidance.”

Shareholders and unit-owners may have the opportunity to state their concerns at the hearing for the restaurant’s liquor license, a legal requirement for new establishments that will serve alcohol.

“If the restaurant requires a variance or needs a liquor license to operate as proposed, you could look into attending the city hearing at which the variance or liquor license application is being discussed and state your objections,” says Jeffrey Reich, a partner at the law firm Schwartz Sladkus Reich Greenberg Atlas. “This information and some support may be obtained from the local community board or council person, but if the restaurant may operate ‘as of right,’ there is little that can be done.”

Note that the State Liquor Authority is now holding all meetings remotely via webcast; according to a spokesperson, members of the public can submit written letters in support or opposition to pending applications. These letters will be reviewed by SLA members before they make a determination on licensing applications.

If the restaurant is approved, boards can take steps to reduce the risk of pests. “The first step in defending your exterior is sanitation,” Bloom says, “followed by exterior pest exclusion with rodent-proof door sweeps and screens.”

City Conducting Surprise Sweeps of Facade-Repair Projects

City Conducting Surprise Sweeps of Facade-Repair Projects 1500 1600 Matthew Adam Properties
MARCH 04, 2021 | By BILL MORRIS

The sweeps are part of the ongoing tightening of DOB rules and fines following a recent string of fatal accidents. Last summer, the collapse of a suspended scaffold rig at an 11-story Murray Hill building left one worker dead and three hospitalized. A sidewalk shed prevented debris from injuring any pedestrians. In December 2019, a piece of debris from a 17-story building near Times Square broke off and tumbled to the street, hitting a pedestrian in the head and killing her instantly. The building had recently been fined by the city for its unsafe facade. The city’s facade inspection program was born in 1980, the year after a 17-year-old Barnard College student named Grace Gold was killed by a piece of falling masonry near the corner of Broadway and 115th Street.

The DOB has recently made substantial changes to strengthen FISP, including doubling the size of its facade-inspection unit, requiring more hands-on inspections of buildings over six stories tall, increasing the frequency of DOB follow-up inspections of known unsafe facades, and greatly increasing penalties to building owners for non-compliance. (cont. below)

NY Adds Building Workers to Vax Eligibility List

NY Adds Building Workers to Vax Eligibility List 1160 772 Matthew Adam Properties

Service Employees Can Get Jabs Starting March 17

BY DARCEY GERSTEIN 11 MARCH 2021 | COVID-19

On March 9, New York Governor Andrew Cuomo announced that beginning March 17, essential building service workers, along with nonprofit employees and government employees who have public-facing duties, are now eligible to receive the COVID-19 vaccine. New Yorkers over 60 are also included in the expanded eligibility starting March 10.

“New York is marching forward in expanding access to the COVID-19 vaccine, addressing underserved communities and getting shots in arms as we turn the tide in the fight against this virus,” Cuomo said in the announcement. “Supply is steadily increasing, and we’re opening new vaccination sites and expanding eligibility to match it.”

The announcement comes after weeks of ambiguity as to whether building service workers were eligible for vaccination by default, having been deemed “essential” under Governor Cuomo’s executive order from February 11, 2020.

But now the workers who service New York’s co-ops, condos, and other types of buildings—who have been on the front lines of the pandemic since the beginning—have definitive eligibility, regardless of age and health status. This is a huge win for those in the industry who have been lobbying for their inclusion. It’s also a win for the hundreds of thousands of residents who rely on these workers every day to maintain the properties they call home.

Kyle Bragg, president of the 32BJ SEIU, the union that represents many of the state’s building service workers, said of the announcement, “We applaud Governor Cuomo for adding building service workers to the vaccine eligibility list. Building service workers have protected the city during the pandemic, and will now get the protection they need to stay safe. Building service workers like door staff, supers, cleaners, security officers, resident managers, and porters helped New Yorkers to get through the pandemic and are vital to the city’s recovery. Their health and safety is tied to the city’s health and safety.”

Eligible New Yorkers can schedule appointments at the ‘Am I Eligible’ website or by calling the state’s COVID-19 Vaccination Hotline at 1-833-NYS-4-VAX (1-833-697-4829).

Some Co-ops Eligible for PPP Loans

Some Co-ops Eligible for PPP Loans 793 529 Matthew Adam Properties
BY MARC H. SCHNEIDER   1 FEBRUARY 2021

You may have heard that co-ops can now obtain loans under the federal government’s Paycheck Protection Program (PPP) as a result of their being included in the new Stimulus Bill. The rules governing the inclusion have finally been released by the US Small Business Administration.

First, the window for co-ops to seek a loan under the PPP is now open. In that regard, the Consolidated Appropriations Act, 2021 (the Act), signed into law on December 27, 2020 included a second round of PPP funding for those businesses that already got a PPP Loan (now known as a ‘First Draw’ loan) and also permits a First Draw Loan for any business (which now includes co-ops – but not condominiums or homeowners associations) which did not get a First Draw loan originally.

Under the program, First Draw loans can presently be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

You should note, however, the application form for a First Draw PPP Loan will require an officer of the co-op to swear and attest to the following representations:

  1. The applicant was in operation on February 15, 2020, has not permanently closed, and had employees for whom it paid salaries and payroll taxes;
  2. Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant, and;
  3. The funds will be used to retain workers and maintain payroll; or make payments for mortgage interest, utilities, covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures as specified under the PPP Rules.

You should not take this certification lightly, as any board member certifying the need for a PPP loan will be doing so in a fiduciary capacity, and therefore could possibly be held personally liable if certifying false information or representations. In that regard, the application form also requires the officer of the co-op who executes the application form to agree to the following statement:

“I understand that if the funds are knowingly used for unauthorized purposes, the federal government may hold me legally liable, such as for charges of fraud. I understand that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable under the law, including under 18 U.S.C. 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to $250,000; under 15 U.S.C. 645 by imprisonment of not more than two years and/or a fine of not more than $5,000; and, if submitted to a federally insured institution, under 18 U.S.C. 1014 by imprisonment of not more than thirty years and/or a fine of not more than $1,000,000.”

Based on the above, it is extremely important for co-ops – and the officers who may execute PPP loan application forms – to make absolutely certain that an application for a PPP loan is accurate, honest, and submitted in good faith. In that regard, if your co-op has experienced a drop in maintenance revenue, rent revenue from commercial tenants, and/or unexpected costs due to damage or the need for supplies, it would seem reasonable to apply. However, if you are not sure whether your co-op is suffering financially from COVID-related circumstances, or if you expect those circumstances to change, you should think carefully and consult with your co-op’s attorney and accountant before proceeding with a PPP First Draw Loan application.

It should be noted that just like last the first round of PPP loans last year, new First Draw PPP Loans will be forgiven – if during the 8- to 24-week period following loan disbursement, the following are true:

  •  Employee and compensation levels are maintained
  •  The loan proceeds are spent on payroll costs and other eligible expenses
  •  At least 60 percent of the proceeds are spent on payroll costs

If you believe your co-op qualifies, there is another important consideration.: If your co-op has an underlying mortgage (which nearly all co-ops do), the mortgage documents for that loan most likely contain a restriction on additional borrowing without your bank’s prior approval. This matters, because while a PPP Loan will likely be forgiven and not need to be repaid (provided the co-op follows all the rules and regulations regarding the use of the loan funds), a PPP loan is still technically a loan, and therefore constitutes additional debt – which will likely trigger a requirement to obtain your mortgage lender’s approval. For this reason, we believe it makes sense to contact the bank who holds your co-op’s underlying mortgage when applying for a PPP Loan.

You can usually process the PPP Loan application through that lender – which will enable you to address the aforementioned consent issue at the same time. If you decide to process your PPP Loan application through another lender (such as the bank where you have your operating or reserve accounts), you will likely need to obtain approval from your mortgage lender – again, depending on what your loan documents provide. You should also check your governing documents to make sure there are no other limitations or conditions on obtaining a loan.

Since the funds available for PPP loans are limited and given on a first-come-first-served basis, time will be of the essence to apply for and obtain your PPP loan. In that regard, borrowers can apply for a First Draw PPP Loan until March 31, 2021. As indicated above, unfortunately, this stimulus bill did not include condos and HOAs, who currently remain ineligible for PPP money.

Marc H. Schneider is a partner at the New York-based law firm of Schneider Buchel, LLP, specializing in the legal concerns of co-op, condo, and HOA communities.