Sunday, January 24, 2010

New Model Alteration Agreement for Co-op Renovations

Apparently the most recent Model Alteration Agreement is one created by REBNY. The NYC Bar Association is releasing a new version, for co-op attorneys to use in representing their boards, next month. A condo version will be available within a year. These new versions are in response to the glut of complex renovations which have been driving boards during the real estate boom.

While having clear rules, with some teeth behind them (i.e. fines), are important, boards probably don't want fees to be so high that they discourage renovations. Renovations are great for buildings, and should generally not be discouraged, because (1) they decrease the number of users of resources, e.g. water, which helps ultimately decrease the building's expenses, and (2) increase property values throughout the building because when these renovated units eventually sell, they tend to sell for a higher price per square foot. But then again, fees are a great way to supplement a building's income, to help reduce assessments and maintenance increases.

I do like the idea of having an engineer or architect review the plans and the renovation progress. I prefer this to having the building's super do it because the super (1) may not be as qualified (i.e. he doesn't see these renovations frequently enough to have developed expertise) and (2) is already busy enough.

The New York Times
Real Estate
New Guidelines Could Make Co-op Renovations Tougher
Published: January 21, 2010
The new co-op renovation guidelines from the New York City Bar Association are in many respects a bill of rights for neighbors.

Sunday, May 3, 2009

Bronx-based service cleans out hoarders' cluttered homes

Sunday, May 3rd 2009, 4:00 AM

Catharine harvests rainwater for bathing and uses a litter box as her toilet. She has had no plumbing for seven years. The Georgetown University alumna sleeps on massive rubbish piles next to her 10 cats.

Cleaning out her cluttered three-bedroom house in New Jersey was not an easy task, even for professional declutterer Don Tagatac. Five tons of paper, rotten food, mattresses and clothing took five days to remove.

Catherine, a 55-year-old former psychiatric nurse, suffers from a little-understood mental illness: compulsive hoarding.

She is not alone. There are 300,000 hoarders in the metro area, according to Randy Frost, a hoarding expert at Smith College. Catherine's putrid residence is not even the messiest that Tagatac's Bronx-based Trauma Scene Cleaning Management Inc. has tidied.

Tagatac serves as a mediator between the victims of the psychological disorder and the landlords, bureaucrats, social workers, psychologists and family members who struggle to contain the problem.

Compulsive hoarding is defined as the acquisition of, and failure to use or discard, a large number of seemingly useless items. The storage of these items often precludes activities for which spaces were designed. This renders homes unlivable if the condition goes untreated.

Tagatac's 20 hoarding cleanups of the past year have confirmed his entrepreneurial instincts.

"I'm in a strange line of work. It's a specialty job," admits Tagatac, who manages 11 employees.

Tagatac betrays a caretaker's concern that runs in his family. His mother is an emergency room nurse, and his stepfather is a physician.

Tagatac took over management of the cleanup enterprise two years ago. While the company initially did only biohazard and crime-scene cleanups, an October 2007 trauma case involving a decomposed body at a hoarding scene gave Tagatac a bold idea - to concentrate on hoarder sites.

The business is now about three-quarters hoarding cases and one-quarter trauma scenes, said Tagatac.

"Hoarding is a misunderstood issue," said Patricia Petersen, a geriatric social worker at Hartley House in Hell's Kitchen. Petersen, who has worked with Tagatac, added, "Most people think that all hoarders are pigs, but it's an illness. It's about control, and every item represents their attachment to things."

All of Tagatac's hoarding clients live alone, and 90% are female. Most are elderly.

"Ultimately, you can't go to sleep in a comfortable bed after you've just seen 10 potential hoarder clients," said Tagatac, who hopes that city government will subsidize hoarder cleanups in the future.

During one cleaning job in the Bronx in September, Tagatac's six-man crew struggled for two hours just to enter a junkaholic's residence.

After wiggling the door open, they thought they were in the clear. But after each bag of junk was removed, more stuff would fall down toward the door, and the team resumed their task.

"It may be a blurry line between the Collyer brothers [the infamous siblings who died in 1947 with more than 100 tons of junk packed into their Harlem brownstone] and people who just keep taking stuff in and get overwhelmed," said Ann Schongalla, an upper East Side psychiatrist.

"Tagatac should have a lot of business," she added, "if only he can get in the door."

Friday, May 1, 2009

Condo Tax Rebates — Divvying Up Money, Stepping into a Minefield

Habitat Magazine
By Frank Lovece

Good news! Your condo association is getting a real estate tax rebate following a successful "tax certiorari" appeal, which many condo boards routinely file on behalf of unit-owners. It's a rite of spring, when co-ops and condos alike challenge the often too-high assessments that the New York City Department of Finance (DOF) places on buildings in order to calculate how much real estate tax each building or condominium unit must pay.

Now what? With co-ops, each shareholder pays his or her share of the tax as part of the monthly maintenance charge. Rebates go to the corporation, benefiting each shareholder proportionally. But condo associations are different and more difficult — hitting legal and ethical issues of which even many professionals have been unaware.

More at:

Sunday, April 5, 2009

Tax increases spark rise in co-op fees

April 5, 2009
Co-op Fees Go Through the Roof

CO-OPS across the city have raised their maintenance charges by as much as 15 percent in recent months, and one of the main causes is rising property taxes.

Board members and building managers say that while maintenance increases averaged only about 5 percent last year, many co-op buildings are now dealing with double-digit increases.

“Operating costs have gone up, but property taxes have skyrocketed,” said John Janangelo, the president of Bellmarc Property Management, which manages about 50 apartment buildings in Manhattan. He said that taxes for some of his buildings had risen by as much as 35 percent in 2009. “It comes at the worst time,” he added, “because financially everyone is suffering. You don’t want to pass through these huge increases because people can’t afford them, but you have no choice.”

Property taxes went up at the start of the year when the city eliminated a 7 percent homeowner tax cut initiated in 2007, when the city was on better financial footing. But there is another reason for the increase. Buildings whose property values soared in recent years are experiencing even bigger tax increases because the assessed values of their buildings have gone up.

Co-op boards routinely challenge their assessments and if the city’s Tax Commission does not reduce the assessments, boards can appeal in court. Because the process is lengthy, a building that has received a series of big assessment increases may not get relief for years.

“Assessments have gone up based on last year’s market,” said David Kuperberg, the president of Cooper Square Realty, which manages about 200 co-ops and condominiums. “And that’s like kicking homeowners while they’re down,” he added, noting that assessments often take a while to catch up to the market.

Marty Hoffman, the board treasurer of a 106-unit co-op on West 89th Street, said that the assessed valuation of the building had gone up every year in the last five years for a total increase of 107 percent. The property tax bill has gone up 55 percent, from $369,000 in 2004 to $574,000 in 2009. Taxes this year alone went up by $83,000, or roughly $783 more annually for each tenant shareholder.

Because each year’s higher assessment is phased in over a five-year period, Mr. Hoffman’s building faces at least four more years of hefty assessment increases as the increases that were issued when the market was booming continue to kick in. Mr. Hoffman said that even though the tentative assessment increase for 2009-10 was only 1 percent, the building may have another tax increase of about $83,000 next year because of the phase-in of previous assessment increases. “Aside from the run-up in oil prices,” he said, “nothing has gone up as fast as real estate taxes.”

Mr. Hoffman said cheaper fuel was the only reason his building had been able to limit its annual maintenance fee increase to 7.2 percent. “If oil prices hadn’t dropped, we would have been faced with a 15 percent increase.”

Some operating costs have risen, however. Richard Montanye, a partner with the accounting firm of Marin & Montanye in Uniondale on Long Island, which works with hundreds of buildings in the city, said that water and sewerage charges went up 14.5 percent last year. “Housing costs in the city in the past four to five years have far outpaced inflation,” he said.

At the same time, some revenue sources have been drying up for many buildings. Those with commercial tenants, especially retail outlets, have been hit hard by the recession, with many tenants asking for rent reductions because their sales volume has dropped off significantly.

“Retail tenants are all hurting,” said Richard Siegler, a lawyer who represents about 150 co-ops, “and they’re all coming to boards and asking for relief. If the economy improves, then a lot of this will go by the by, but if not, then boards will have to contemplate losing tenants, even though they’d rather not have a vacancy.”

Buildings that in a stronger market relied on income from flip taxes — a sort of transfer fee for each sales transaction — may also struggle now that sales volume throughout the city has been reduced to a trickle.

Robert Berliner’s 277-unit building on Sutton Place has a 2 percent flip tax for outside buyers, which he said “was a pretty significant source of revenue in 2006 and 2007.” The building had used that income to meet operating costs, but because there are now so few apartments changing hands in the building, the board has shifted its flip tax revenue into its reserve fund. “We’re trying to be more realistic and more conservative in dealing with our budget,” he said.

Mr. Berliner said that because real estate taxes are so high for the building, the board may consider raising the flip tax to 3 percent. Property taxes were just under $3 million last year and represented the single largest expense in the building’s $7 million budget.

Mr. Berliner, who is the co-op’s board treasurer, said that the city raised the building’s assessment by 25 percent in 2008, but the building challenged the increase and got it reduced to 10 percent.

“But when you consider the state of the economy and what’s happening in real estate values,” he said, “how the city could have come up with any increase in assessed valuation is beyond me.”

This article has been revised to reflect the following correction:

Correction: April 12, 2009
An article last Sunday about a sharp rise in maintenance charges in many New York City co-ops gave an outdated location for Marin & Montanye, an accounting firm on Long Island that serves hundreds of buildings in the city. The firm is in Uniondale, not Port Washington.

Monday, March 30, 2009

More property owners filing tax appeals

New York Post
March 30, 2009 --

The city's Tax Commission has been swamped with appeals this year from major property owners hoping to lower their tax bills, The Post has learned.

Officials said 44,488 appeals were filed by owners of apartment, co-op, condo and office buildings, up 5.6 percent from the 42,106 filed last year.

"It's a substantial increase," said Tax Commission President Glenn Newman.

Typically, only the largest property owners have the resources -- and the financial incentive -- to file appeals.

Last year, for example, only 1,389 of 699,809 small-home owners challenged the assessments by the Finance Department, which form the basis for tax bills on the city's 1,015,968 properties. Comparable figures for small-home owners this year weren't available last week.

The odds of winning are long.

In Manhattan last year, just 2,500 of 18,830 challenges were successful. So the appeals numbers tend to stay flat from year-to-year.

The Finance Department's tentative assessment roll, issued in January, lags behind the market by a year, which explains why it increased the value of office buildings by an average of 7 percent even as prices were falling.

In an appeal, owners can present updated income and expense data through the end of the year.

"When the market is rising, most real-estate operators would not complain about that," said one official. "This year, it's a different story. If your tenant was Lehman Brothers, you probably have a good chance of getting a reduction."

One lawyer who handles appeals said owners of hotels and department stores, which have easy-to-document records of being caught in the economic downturn, have strong cases for reductions in their assessments.

Sunday, March 29, 2009

Seniors fined for talking in the lobby of their Staten Island condo are given a room to chat in

Staten Island condo moves chirping seniors to yap of luxury
BY Christina Boyle
Sunday, March 29th 2009, 4:00 AM

A group of Staten Island seniors really have something to talk about now - they won the right to kibitz after a condo tried to ban their evening chats.

The five retirees - who range in age from 66 to 90 and have two Purple Hearts among them - were slapped with $25 fines for shooting the breeze in their complex lobby.

They refused to back down, threatening legal action to protect their right to free schmooze.

"We didn't smoke and we didn't drink and all that jazz but they didn't want us in their lobby," said Leroy Tepper, 81, a member of the "Fined Five Seniors."

"We weren't going to stand for it."

The group argued they rarely gathered later than 8:30 p.m., were not raucous and mostly sat around reminiscing about friends, children and, sometimes, politics.

The condo said neighbors complained they were too loud.

"It clearly states in the rules, no loitering," Cheryl Ruiz, who manages the Elmwood Park II condominium, told the Staten Island Advance.

But after the men consulted a lawyer about the fines, managers at the upscale condominium building relented.

They agreed to give the guys a vacant studio to use as a meeting spot from 7 p.m. to 9 p.m. nightly

"We're satisfied. We would prefer to stay in the lobby but life isn't that way," Tepper said.

"We have a facility that is warm, we have a facility that is comfortable."

Their new after-dinner chat spot has a bathroom, kitchenette, a table and foldup chairs.

The men had their first rendezvous there Friday and said they had no complaints.

"We enjoyed ourselves," Tepper said.

"We talked about when we played Johnny on a Pony when we were kids. We can't do it now because of our age and handicaps."

Some of the residents were happy to see the Fined Five have a room of their own.

"This is pure hogwash," Maureen Hernandez, 30, said of the ban on loose lips in the lobby.

"They're a lovely bunch of gentlemen," she told the paper. "There is no bad language. There are no boomboxes or beer. These are men who fought our wars for us, I don't know why they have to go through this."

Tuesday, March 24, 2009

Landlords firing doormen to cut costs

White Gloves Off?
By Oliver Haydock
March 24, 2009 | 2:54 p.m
The New York Observer

Manhattan doormen, ably trained as they are in the art of regulating traffic in and out of the city’s abodes, might want to start battening down the hatches: The economy … is … coming. In these troubled economic times, some residential building workers, who are members of the union 32BJ, are finding their services superfluous to requirements in the city, with some union members already losing jobs.

So add doormen, especially those working in rental buildings, to the list of luxury amenities that New Yorkers are no longer eager to pay for, along with rooftop decks, in-house recreational facilities, haute design fixtures and indoor swimming pools.

“Tenants are sacrificing living conditions,” Marc Lewis, the president of Century 21 NY Metro, said. “They are leaving doorman buildings and going into elevator buildings.”

Formerly the white-gloved vestige of an antiquated Upper East Side lifestyle, uniformed doormen spread during the boom to every corner of Manhattan, their most familiar habitat being the new-development building in Manhattan. But because of falling rents and increasing vacancies, landlords are looking at tighter balance sheets, and that just might mean a thinning of the ranks in the doorman brigade.

So far in 2009, 32BJ, which also represents cleaners, porters, supers and security guards, has implemented approximately 70 workforce reductions, which is roughly the same amount as in all of last year.

Troubles in the market for doormen rental buildings were evident as early as last February, when this very column noted that “Manhattanites are ditching doorman buildings.” A year and several economic crises later, and you can only imagine how things have worsened. From September 2007, around the time the rental market peaked, to February 2009, mean rents for apartments in doorman buildings plummeted faster than anything this side of Citi stock.

In the span of 17 months, rents on doorman-building studios fell by 15 percent; rent for doorman-building one-bedrooms dropped 13 percent; and rents for doorman-building two-bedrooms slipped 9 percent, according to statistics from the Real Estate Group New York.

According to that firm’s COO, Daniel Baum, landlords of doorman buildings are more vulnerable to a slumping real estate market. “At luxury buildings or doorman buildings, they have to take aggressive action,” Mr. Baum said. “Because of their added costs, they have more exposure to vacancy rates.”

It’s no surprise, then, that landlords and management companies might be looking for ways to cut costs, especially since the crashing rents are accompanied by a major reduction in demand and a startling rise in vacancy rates. (Or is it the other way around?)

If less people are paying rent at reduced prices, something has to give. According to Phil Whalen, a principal at Key Real Estate, a real estate firm specializing in property management, landlords are starting to negotiate staff reductions with 32BJ. One landlord, who wished to remain anonymous, has indicated that the union is more willing to negotiate staff levels than in the past.

Unlike non-union workers, the union salary is set in stone—at least until the next round of contract negotiations—so payroll cuts invariably mean job cuts. Members of 32BJ make $18.94 an hour, which translates into $757.60 for a 40-hour work week and a little less than $40,000 in annual salary; employers are also on the hook for about $1,080 in quarterly benefit payments, which include health care, pension payments and other expenses. And it’s getting harder to cover those expenses, according to Mr. Whalen, who is especially concerned about underwriting health care costs.

According to Matt Nerzig, the director of communications for 32BJ, the union is paying close attention to the situation. Unlike, say, the UAW, layoffs and staff reductions haven’t been a fact of life for 32BJ.

“We’ve been unaffected by layoffs for a long time, but they really seem to have started in recent months,” Mr. Nerzig said. So far, most of the staff reductions have been concentrated in Brooklyn and Queens, and whether they jump the river and start becoming prevalent in Manhattan remains to be seen.