Thursday, November 30, 2006

Façade Upkeep Proving Costly Surprise for Many Homeowners

New York Sun
BY GABRIELLE BIRKNER - Staff Reporter of the Sun
November 30, 2006
http://www.nysun.com/article/44383

Amid the slew of cheerful cards and letters being sent out this holiday season, thousands of New Yorkers stand to receive at least one mailing they'd rather return to sender — a "Dear Homeowner" letter comprising a hefty bill.

With an approaching deadline to comply with a local law requiring mid- and high-rises to maintain their façades, many city cooperatives and condominiums are undergoing extensive exterior renovations. Often picking up the tab for that work, which commonly exceeds $1 million a building, are shareholders of co-ops and owners of condominium units.

A film producer and entrepreneur who six years ago bought a studio apartment on East 84th Street, Adam Riemer, recently received a letter from his cooperative board informing him that he'll be subject an assessment to cover extensive brick replacement work. "If the value of an apartment increases, and it keeps things safer for people walking below, I think it's fair — as long as it's not outrageous," he said.

Still, Mr. Riemer, 34, said he's dreading the forthcoming assessment bill, which he expects will be slipped under his door any day now.

Local Law 11 of 1998 requires all structures six stories or taller to commission architects or engineers to inspect their facades, and then file detailed reports to the New York City Department of Buildings every five years. The next deadline is February 21, 2007. This statute, which applies to about 12,000 residential and commercial buildings, superceded a less-comprehensive Local Law 10 of 1980 — passed after part of a Morningside Heights apartment building fell off, killing a Barnard College student.

The engineering reports can be labeled "Safe," "Unsafe," or "Safe With A Repair And Maintenance Plan." Buildings that are "Unsafe" must immediately erect scaffolding. Structures called "Safe With A Repair And Maintenance Plan" five years ago must have completed the planned façade amelioration by the February deadline.

"All year, buildings have been doing this work, and trying to finish it up before the cold weather, and before the reports are due," a senior vice president of the Real Estate Board of New York, Marolyn Davenport, said. "Millions and millions of dollars are going into façade restorations right now." Ms. Davenport, who is also the board president of her Brooklyn Heights cooperative, said architects, engineers, and construction managers already have a so much work that it has been hard for buildings to secure even a handful of bids.

In apartment towers that don't have adequate rainy-day reserves, governing boards can choose to finance the project, which can drive up monthly common charges, or to levy "assessments" on homeowners. The assessments can range from a one-time payment of several hundred dollars to monthly installments totaling tens of thousands of dollars.

Assessments depend on a variety of factors, including the size of the building, the extent of the necessary repairs, the cost of the materials needed to fix the damage, and how much contractors charge for labor.

"Since so many buildings are doing work at the same time, I wonder if contractors are overcharging, because they know they're not going to lose business," an owner of a two-bedroom condominium on West 100th Street, Jeremy Caplan, said.

Mr. Caplan, 31, has been subject to two assessments in as many years — the first assessment was levied about two years ago to repair the pre-war building's plumbing system; the second was imposed just recently to pay for façade work tied to the 1998 law. Letters placed under doors notified unit owners of forthcoming assessments, he said.

Combined, these charges are costing Mr. Caplan, a magazine writer, $300 a month in addition to his monthly maintenance. "It's definitely an added expense, and there's little you can do about," he said. "It seems like this is just part of owning an apartment in the city."

The president of a cooperative on East 67th Street, Bruce Lee, said exterior maintenance would likely force the board to assess tenants in the 80-unit building early next year, adding: "We know that there is going to be a charge, but don't yet know how much."

Mr. Lee, a 75-year-old author, said that leading up to the last five-year deadline, shareholders in his building owed an average of $6,000, which could be paid off in installments over three years. He said the law was a "necessary evil" because so many buildings would otherwise put off making major repairs to keep down costs for its residents. "If you're going to cut the budget, building maintenance is often the first thing to go," he said.

Apartment owners who are not able to afford the assessments may be able to negotiate a less-formidable payment structure with their building's board or management company. "If an elderly person on a fixed income came to us, we might let them pay it out over a longer period of time," a board member of a West 55th Street cooperative Iris Shorin, 64, a real estate broker with DJK Residential, said. "We'd certainly be kind, but we couldn't waive it altogether."

A shareholder of an Upper East Side cooperative, Albert Weil, 64, said the cost of exterior maintenance seems to have nearly doubled in the past five years. "Essentially, there are very few contractors who do this kind of work, and we're really at their mercy," Mr. Weil, an insurance broker whose building is drawing on its reserve funds to pay for the required work, said. "It's one of these situations, where if you don't like their bid, there are five or 10 other buildings that need work. These people have enough business."

The president of the Council of New York Cooperatives and Condominiums, Marc Luxemburg, told The New York Sun that the city's one-deadline-fits-all approach drives up labor costs. "It's called the law of supply and demand," he said. "There's no statutory limit to how much a contractor can charge."

To ease the burden on contractors facing a bottleneck of work, and on property owners picking up the tab, the council has been lobbying the New York City Department of Buildings for a staggered filing deadline. That has not materialized, but the buildings department did grant an extension of up to nine months for finishing façade work — provided that the delay won't cause a threat to public safety, and that the necessary paperwork was filed by November 21.

Buildings that have not requested extensions face code violations that could lead to fines and even imprisonment if they do not complete their façade work and file their reports.

There is a two-year filing window for reports, but a spokeswoman for the buildings department, Jennifer Givner, said she expects a "significant portion" of buildings to file very close to the deadline. "It doesn't seem like it should come as a surprise," Ms. Givner said. "It's not a new law, and we've done a lot of outreach, but still buildings tend to wait till the last minute."

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