Monday, March 31, 2008

Stimulus package and jumbo loans

If you haven't been reading the news lately, here's what you missed. The stimulus package that became law on February 13th, which is giving poorer taxpayers rebate checks up to $600, also increased the mortgage amounts that Fannie Mae and Freddie Mac could buy. A conforming loan is a loan less than $417,000, and Fannie and Freddie can't buy these big loans. A non-conforming, or jumbo loan, is a loan greater than $417,000, and Fannie and Freddie can buy these smaller loans. Typically, jumbo loans have higher rates than conforming loans because Fannie and Freddie can't buy them, thus decreasing the market for them. The new law was intended to drop rates on jumbo loans, because now Fannie and Freddie could buy these larger loans. But it hasn't really worked out this way.

So here's the news, it won't apply to co-ops, and it will only allow a loan-to-value ratio of 75%, and you'll have to pay 2-3 points, and you can't do a cash-out refinancing. Doesn't sound to stimulating, huh?

Thursday, March 27, 2008

Former Co-Op City board president gets 6 months in jail in plea deal

Daily News
Thursday, March 27th 2008, 4:00 AM

A former Co-op City board president was sentenced to six months in prison Wednesday for accepting $10,000 in kickbacks from a painting company she illegally granted a multimillion-dollar, federally funded contract.

Iris Baez, 59, also was ordered to return the $10,000 she accepted and was sentenced to one year of supervised release after her prison sentence.

Yesterday's sentencing in federal court marked the end of Baez's tenure of more than 20 years as the matriarch, behind-the-scenes powerbroker and, for a time, president and secretary of the massive Mitchell-Lama housing complex along the Hutchinson River Parkway in the northeast Bronx.

Baez originally was charged with one count of conspiracy and one count of bribery concerning a federally funded program for granting $3.5 million to Stadium Painting from August 2000 to July 2002.

Baez never submitted a proposal or created a formal contract for the job because the work was awarded on a "probationary basis," said the U.S. attorney's office. She had faced up to 15 years in prison before her plea deal.

Othelia Jones, current president of Co-op City's Riverbay Board, said that although she doesn't condone Baez's crime, she sympathizes with how much the woman has been punished for her corrupt deeds.

"She has suffered enough," Jones said. "She was the matriarch here. She wielded a lot of power here, and that's all gone. People that were involved with her don't want to be involved with her anymore. She's really suffered."

Jones said the 15,000-unit development needs to recollect itself and focus on its cogeneration plan to produce its own energy. She fears that elections for the board in May will be clouded by others trying to force out anyone whom Baez supported in the past.

"I'm sure they are going to milk this for all it's worth," she said.

Co-op City has had a history of corrupt leadership during the past decade.

In October, a former Riverbay employee pleaded guilty to delivering a $5,000 bribe to Riverbay officials in April 2002.

And last spring, Charles Rosen, the former executive director of the Gloria Wise Boys and Girls Club at Co-op City, pleaded guilty to stealing more than a million dollars from the charity.

Jones said she believes Riverbay has turned a corner, and promises she is only doing legal, honest work for the community, which is in need of repair.

"It's time for us to move on, and I hope the community just lets it be and doesn't keep stirring it up," Jones said. "We have things to do."

Wednesday, March 26, 2008

Partly Off the Grid, With a Mini-Utility in the Cellar

Good way for a building to lower its electricity and heating costs.

The New York Times
Square Feet
March 26, 2008

Astor Wines and Spirits went beyond the conventional notions of a wine shop two years ago when it relocated to the landmark Theodore De Vinne Press Building and added a cooking school and wine tasting area on the second floor.

Unbeknown to customers, the shop was also blazing another sort of trail. Deep in the basement, the company installed a complex mechanical system to generate energy for its businesses. The energy would be produced far more efficiently than the electricity that could be purchased from the local utility. Over the long term, the system is also expected to provide a cost savings.

“It was clear that we would need to consume a lot of energy for the proper temperature control of the wines,” said Andrew Fisher, who runs the company. “We also saw it as our civic responsibility to reduce our carbon footprint.” The Fisher family, which has owned Astor Wines and Spirits since 1968, had owned the eight-story building it moved into at 399 Lafayette Street, on the northeast corner of Fourth Street in the East Village, since 1983. At roughly the same time the wine store moved, the owners installed two microturbines, which are similar to jet engines and run on natural gas.

The two units combined produce around 120 kilowatts of electricity an hour. The heat energy that the units produce is used to run the boiler for heat and hot water. It is also run through an absorption chiller that turns the steam into cold water for refrigeration, which keeps the wines properly chilled.

Experts say that using both the electricity and the heat that microturbines generate can help buildings tap as much as 70 percent to 80 percent of the energy available, compared with efficiency rates as low as 30 percent for some older power plants owned by utilities.

This system was an expensive proposition for the Fishers. Their initial outlay was around $480,000 — and roughly $250,000 of that went for the microturbines alone. But Cory Glick, who sold the system to the Fishers, estimates that the money they save on utility bills will allow them to break even in about four years.

The clock only recently started ticking on that payback period, though, because the Fire Department did not allow the Fishers to hook the natural gas up to their microturbines until a few months ago, once the city had issued a rule governing their use.

Previously, microturbines had not been specifically addressed in the city’s building code, said Deborah Taylor, the chief sustainability officer for the New York City Department of Buildings. But a handful of buildings started installing them two years ago. So the city formed a task force with the Buildings Department, Fire Department and outside experts to draft a microturbine rule.

Ms. Taylor said she did not know of any other major American city that had created such a rule — although microturbines have been installed in others. “But we were concerned about the density of our urban environment” and the possible danger of fires from a relatively new category of equipment, Ms. Taylor said.

When Mayor Michael R. Bloomberg announced the new microturbine rule in December, he said that it would help “spur the real estate and development communities to build more efficient, greener projects,” while also helping the city toward its goal of reducing its greenhouse gas emissions 30 percent by 2030.

Ashok Gupta, the air and energy program director for the Natural Resources Defense Council, an advocacy group based in New York, served on the task force. “We don’t expect every existing building to put in a microturbine,” he said, “but we are supportive of this as part of a portfolio of solutions.” Emission-reducing actions include cleaning up older power plants and using more renewable energy as well as tapping technologies like microturbines that produce energy from fossil fuels more efficiently than power plants.

Mr. Glick, the president of RSP Systems in Brooklyn, which installed the system at Astor Wines and Spirits, said he recommended microturbines to clients who were spending at least $8,000 a month on utilities. He said apartment buildings needed to have a minimum of 60 units for microturbines to be cost efficient.

For example, RSP Systems installed a microturbine at the Millennium Tower Residences, a new 35-story 400,000-square-foot condominium in Battery Park City on the southern tip of Manhattan. The 234 one- to four-bedroom apartments in the building had all sold for $900,000 to $3.5 million when it opened a little over a year ago.

The tower, at 30 West Street, was the first residential building in the city to get a gold LEED rating, the second-highest category, from the United States Green Building Council, which has a point-based rating system that allows developers to market their buildings as green. Installing the microturbine counted toward the LEED rating, which stands for Leadership in Engineering and Environmental Design.

The 60-kilowatt unit at the Millennium Tower Residences produces about 10 percent of the electricity that is used in the building’s common areas, said Charles Norman, a project manager for the developer, Millennium Partners, which is based in New York. “Not only are we able to use natural gas, which is a very clean-burning fuel,” he said, but the recaptured energy heats the boiler. This helps reduce the common charges, he said.

Meanwhile, Mr. Fisher of Astor Wines and Spirits said he would like to install a third microturbine. The first two units produce enough heating, cooling and electricity for the store and Astor Center — as the cooking school and gallery upstairs are known. A third unit, he said, could provide the heat and electricity for the commercial tenants on the six floors above. “Our goal is to be completely off of the grid,” he said.

Chester Higgins Jr./The New York Times

Equipment to capture hot water from microturbines.

Chester Higgins Jr./The New York Times

Andrew Fisher and microturbines in the shop’s basement.

Co-ops' Annual Meetings and Financial Reports

The New York Times
March 26, 2008

Q. Could you tell me when co-ops in New York are supposed to schedule their annual meetings and, more important, when they must distribute audited financial reports and the year’s budget to shareholders? Our co-op board insists that the earliest possible date it can have an annual meeting is the second Monday in May. It also claims that audited financials and the year’s budget cannot be distributed before the beginning of May.

A. “Each co-op is different,” said Lisa Breier Urban, a Manhattan co-op lawyer. “And the date the annual meeting is to be held is generally contained in the bylaws of the corporation.”

She added that most co-op governing documents do require that the shareholders be provided with a financial statement, although some may not require the statement to be certified. Some co-ops do not provide an annual budget to their shareholders.

Monday, March 24, 2008

Low fees for new condos? Think again

The Real Deal
March, 03, 2008
Author: Abby Luby

New construction condos that offer more amenities than five-star hotels not only come with hefty price tags at closing time — increasingly, they also come with rising monthly common charges.

The deluxe amenity packages that have become standard fare at new condos — things like health spas, dry-cleaning services and pet grooming — are one of the leading factors in the spike in condo fees, real estate attorneys and management companies said. Until now, condo fees have generally been modestly low compared to the maintenance charges at co-ops, which has made a good selling point.

Currently, while condo charges are still lower (partly because they do not include real estate taxes), they are not the selling point they once were, especially because the luxe add-ons are coinciding with rising fuel costs, ballooning payroll fees, and increasing property insurance premiums and security expenses.

Michael Mendillo, president and CEO of Wentworth Property Management, said in the last two years more condos have introduced upscale, white-glove services. "Having your dog walked, getting tickets to a game and plays — those are all extra services," he said.

However, he added that while many prospective buyers look at how much common charges will cost, the fees are rarely a deal breaker, particularly as more buyers have expectations of luxury services. Mendillo said even the exterior look of a building has become important.

"The curb is important to the eye," Mendillo noted. "A building may look old and tired because of the power-washed building next door. All this drives up costs."

$500 for breakfast

Real estate attorney Luigi Rosabianca noted that one condo he knows of in the Financial District recently began offering a continental breakfast in a common lounge, but cancelled the service after residents realized how much it was tacking onto their monthly fees.

"After three or four months, the owners realized it was costing them about $500 to $600 a day," Rosabianca said. "They figured out the yearly cost and are no longer serving breakfast."

He said the question buyers need to ask themselves is: "Do you buy into a building for a free cup of coffee, or would you rather have a balanced budget?"

It's not just the new condos that are being hit with rising costs. A lot of what is driving up bills are expenses that affect buildings of all ages and types.

Doug Heller, a real estate lawyer and a partner with Herrick, Feinstein LLP, said the price of heating oil, which condo boards have virtually no control over, is one of the biggest culprits.

"The worst increase I've seen has upped a condo budget about 15 percent," he said of a building on the Upper West Side. "It's the high fuel charges."

Michael Wolf, president of Midboro Management, said one 60-unit building that his firm manages on the Upper West Side saw its heating bill jump from 7 percent of its $900,000 annual budget, in 2003, to 9 percent in 2007.

Plus, Wolf said: "You see a spike in fees from changing services, like adding a 24-hour doorman."

Labor costs are based on union contracts, which means that wages increase every four years. The last spike in that category was a year and a half ago, when 28,000 doormen, porters and other apartment building employees nearly went on strike before a contract was hammered out. That deal included 8.5 percent raises over the length of the contract for thousands of buildings in Manhattan, Brooklyn and Queens.

Mary Ann Rothman, executive director of the Council of New York Cooperatives & Condominiums, a nonprofit organization that advises co-op and condo boards, said one of the most noticeable spikes in fees came right after Sept. 11, and has stayed high since.

"We had tremendous escalating costs for insurance that really skyrocketed," she said. Added building security and health insurance for building service employees have also become major expenditures.

The New York Times, citing numbers from appraiser Jonathan Miller, recently reported that common charges and real estate taxes have together spiked 38 percent at condos between 2002 and 2007, compared to a 27 percent increase in the previous five-year period.

Condos cheaper?

In 2006, the Council of New York Cooperatives & Condominiums found that common condo fees were about 45 to 55 percent of what co-op owners were paying in maintenance. That is largely because condos separate common fees from real estate taxes and mortgage payments.

The report, which compared data from roughly 200 co-ops and 150 condos, also indicated that over the past three years, wages, including benefits, had gone up approximately 11 percent.

"A big piece of the co-op maintenance is the building-wide mortgage, but then again, an individual condo mortgage is usually bigger," said Ronald Kremnitzer, partner and co-chair of Pryor Cashman LLP, a firm that converts rental buildings to condos.

Kremnitzer said condo common charges combined with condo real estate taxes are typically lower than comparable co-ops, but the condos usually sell for more money.

"Now when you go get an individual condo mortgage as opposed to a co-op loan, you generally have a bigger mortgage and pay more interest," he said. "The prices for both condo and co-op really are a wash-out, the difference being the purchase price and the ongoing price."

Making repairs

Another factor that can drive up common charges, particularly in new condos, is shoddy construction.

When condo boards find that the building needs repairs or has major structural problems like a leaky roof or poorly installed flooring, a capital assessment is levied on the tenants, which results in a temporary fee hike.

Wolf said that scenario is common. "A board does an assessment to pay for deficiencies in new construction left by the developer," he said. "Maybe for the builder, things didn't go according to plan: It could be a mechanical failure or exterior issues. In most cases, the sponsors are going to repair that, or the building does an assessment to pay for it."

Wolf said that sometimes a sponsor, usually the developer selling the units, doesn't cover those costs because their obligation to the project has ended.

Rosabianca said developers know that modest common charges are one of the lures of buying a new condo. Still, he warned that keeping those fees too low can cause problems later on. And, while new condo developments often advertise themselves as having low common charges, those charges often end up increasing later because of new costs.

"It's foreseeable that when a building comes into operation, they realize their budget didn't meet the building's needs, so they increase common charges," he said. "It happens all the time."

According to Rosabianca, boilerplate language in the condo offering plan often states that the budget is subject to any reasonable increases.

Planning for high costs

Condo boards vary in the way they plan for the future, with some socking away reserve money and others opting out of maintaining rainy day funds.

"There is a condo board that didn't need to raise the common charges but raised them 2 percent anyway this year," Heller, the real estate lawyer, said. "They said they were worried that unit owners were getting too comfortable without ever raising fees. If you do it prophylactically, build a reserve, you won't get shocked."

Elly Pateras, vice president and senior managing director for Douglas Elliman Property Management, said condo boards that accurately project expenses for the following year can keep up with the 3 to 4 percent cost of living increases.

"Many buildings don't raise the common charges or run a deficit for two or three years, and then they meet up with expenses," Pateras said. "All of a sudden, there's a 16 percent increase."

Kremnitzer, who also represents condo buyers, advises his clients to find out what the projected charges will be over the years.

"We look at condo minutes — find out if there have been things like leaks or complaints," he said. "But one of the most important things we look at is how much money is the condo holding in the bank, how financially successful the building is. We like seeing a building hold three to six months or more [worth of common charges] in reserve."

He said if a building's budget is $1 million a year to cover labor, insurance, fuel and normal repairs and is generated solely from common charges, the building should have at least $500,000 in the bank.

But it's a matter of striking the right financial balance, because some people get nervous if a building holds too much in the bank, he noted. "Now they have credit lines and much thinner tax reserves," he said.

Why banks dislike walk-ups and studios during tight markets

New York Magazine
Real Estate
They Just Don’t Understand
In a tight market, banks look askance at walk-ups and studios. What’s a New Yorker to do?
By S.Jhoanna Robledo
Published Mar 24, 2008

Refinancing was tough for the candidate, but not for the usual reasons. On paper, he was a dream: good job, great credit score, tons of equity in a big, well-renovated Inwood apartment. But many banks refused, for one simple, though confusing, reason: He lived in a fifth-floor walk-up. Never mind that in his neighborhood, Inwood—indeed, all over the city, even in the best neighborhoods—walk-ups are everywhere.

Never mind, also, that most of the big banks are headquartered in New York, and that their bean-counters might be expected to understand our peculiar landscape. The fact is, broad national rules often put ridiculous constraints on New York deals. Paul Cole, of the mortgage-brokerage firm Trachtman and Bach, notes that New Yorkers who are neither subprime borrowers nor financially dicey are often confounded by arcane house rules that are incompatible with our urban landscape. “The business of mortgages and common sense don’t necessarily mix,” says Cole.

Take four-unit co-ops. While they’re standard-issue in well-off brownstone neighborhoods like Park Slope, Cole says they’re practically untouchable for some lenders. So are apartments with window bars; if an appraiser photographs them, a red flag will sometimes go up. Some banks won’t fund co-op deals at all, says Jeffrey Guarino, managing director of Gotham Capital Mortgage—and cooperatives constitute 75 percent of New York’s salable housing stock. Small properties can also be suspect. One magazine editor was stunned to discover that JPMorganChase wouldn’t write him a home-equity loan because his West Village studio, worth more than many suburban houses, was under 600 square feet. Cole gets agitated just talking about it: “You and I know you can sell a ten-by-ten storage unit in the city and get a bidding war!” he says. (Reached for comment, Chase’s Mike Fusco says that “the dimensions of a co-op do matter when applying for a home-equity loan.”)

The solution, fortunately, is not difficult. If you find yourself up against one of these rules, find another bank. You may have to settle for the second-best interest rate, say, or a lender that’s less convenient. If you’re working on your own, this may require more shopping; if not, most New York mortgage brokers know the game inside out, and will do the screening for you.

So why don’t the banks just wise up? Even though the city is thickly speckled with Chase branches—and those of other banks—lending rules are often hatched in far-off places, where walk-ups are considered slums and 500-square-foot apartments are hard-to-sell oddities. “Here’s the thing: We forget sometimes that New York City is a small piece of a lender’s portfolio,” says Guarino. Today’s suspicious mortgage climate doesn’t help, either. “No one’s in the mood to make exceptions,” explains Cole. “You may think you’re qualified, but that may not matter.”

Thursday, March 20, 2008

New Tactics Take A Bite Out of Bedbugs

The Wall Street Journal
March 20, 2008; Page D1

Several years after Americans woke up to a bedbug problem, the pest-control industry is rolling out an arsenal of methods that promise an easy yet thorough assault on the bloodthirsty pests.

Bedbugs, which can be difficult to spot, are becoming even tougher to eradicate as they spread and their resistance to some pesticides grows. In response, pest-control companies are adopting new tactics.

Stern Environmental Group LLC, a Secaucus, N.J., company that serves the New York City area, recently started using a technology that sprays the bugs with icy carbon dioxide to kill them. ThermaPure Inc., of Ventura, Calif., uses devices similar to giant hair dryers to heat up a room and bake the bugs to death. Bedbugs & Beyond LLC in New York will remove people's furniture from their homes and fumigate it with a poisonous gas. Another method uses specially trained dogs to track down tiny bedbugs and their eggs, helping exterminators target spraying. Meanwhile, researchers at the University of Minnesota are studying bedbugs' behavior in an attempt to develop a trap that simulates a typical victim -- a sleeping human.

Professional treatments, including many of the conventional methods still being used, can start at about several hundred dollars and reach into the thousands.

A simple solution to rid a home of the common bedbug, or Cimex lectularius, has proven elusive since the brown, wingless creatures made a resurgence in the U.S. about five years ago. Both entomologists and the pest-control industry say they have seen a rise in infestations of homes and hotels; Steven Jacobs, an urban entomologist at Penn State University who identifies insects for homeowners and pesticide companies, says he now receives about 30 bedbug specimens a year, compared with almost none about five or six years ago.

Wilson Oquendo of Stern Environmental demonstrates a spray used to kill bedbugs.
Bedbugs are slightly smaller than an apple seed and hide in the folds and seams of mattresses and other furniture, emerging at night to feed on a warm-blooded host. Part of what makes bedbugs so tricky to eradicate is that the insects aren't confined to the bed. They live in drapes, behind wall hangings, in the cracks of wall plaster -- and even in light fixtures and electronics. Further complicating matters, a female can deposit the tiny eggs around a room. The bugs are transported from one location to another in luggage or clothing; pest experts say the bugs likely accompany travelers home from hotels or enter a house on secondhand furniture.

Entomologists say it is unclear why the pests have made a comeback, but theories include a more restrained use of other pesticides that in the past might have helped to nab bedbugs, and an upswing in international travel.

Bedbug bites can produce itching welts, but the bugs aren't known to carry disease. Still, they can be quite a nuisance and take a powerful psychological toll. Some people don't sleep well for months, worrying that every itch is a bug on them, and many feel ashamed to tell their relatives or neighbors about the problem.

Bedbugs typically have been treated with a class of chemicals known as pyrethroids. Yet entomologists who study bedbug control say the insects have developed some resistance to these chemicals. Other chemicals are more effective but can take longer to work. Mattress encasements may be successful in eliminating bugs -- but only from the mattresses.

Companies pitching the latest eradication methods -- such as heat or icy sprays -- say they are more effective as well as more palatable for people worried about using pesticides. Yet entomologists caution there still are drawbacks: The cold spray might not reach every bug; dogs can miss hiding places high up in a room; and heating might cause bugs to flee to a cooler place in the home. Except for heating, the latest methods usually require the homeowner to go through the onerous process of clearing out rooms, drawers and closets, and washing or dry cleaning all clothing and linens.

"We don't have any easy method of elimination," says Michael Potter, a professor of entomology at the University of Kentucky who has observed an increase in bedbugs through his research and work with pest-control companies. "We are looking for the silver bullet."

While visiting her father's home over Christmas, Chance Fechtor developed 40 bites on her body that doctors suspected were from bedbugs. Convinced she had brought the bugs home with her, Ms. Fechtor took apart her bed and went though her clothes looking for them. She even starting waking up in the middle of the night and donning a headlamp in hopes of nabbing them.

After doing some research, she came across Advanced K9 Detectives in Milford, Conn., which trains dogs to spot bedbugs. A dog found some bugs in the mattress, the carpet, a drawer and behind a radiator. The house was sprayed with pesticides, and Ms. Fechtor says her Boston-area home has since remained pest-free.

"It was very stressful," she says. "The idea that there were I don't how many bugs on me while I was sleeping completely grossed me out."

Pest-control experts and researchers say dogs can indeed be helpful for finding bedbugs humans might miss or to confirm a treatment has gotten rid of all the bugs. Pepe Peruyero, who last year started training bedbug-sniffing dogs for pest control companies at his J & K Canine Academy in High Springs, Fla., says the cost can be about $200 an hour, depending on home size and travel time.

Another solution is killing the bugs and their eggs by heating a room to between 120 and 140 degrees Fahrenheit for several hours. ThermaPure uses infrared heaters to uniformly heat the room, says President and Chief Executive David Hedman. Treatment costs between $500 and $1,000 per room. (Easily melted items like candles and lipstick must first be removed.)

At the opposite end of the temperature spectrum, Cryonite, made by CTS Technologies, a unit of Venteco PLC in London, aims to eradicate the bugs by dousing them with a snowy spray of carbon dioxide. A drawback: Some bugs can survive if they aren't directly hit by the spray. Treatments cost between $600 to $700 per room, or as much as 50% more than a conventional chemical treatment, says Douglas Stern, managing partner of Stern Environmental, one of the companies using the method.

Meanwhile, desperate homeowners who don't want to pay hundreds of dollars are taking matters into their own hands, putting sticky tape on or near their beds to snare the bugs, vacuuming compulsively or ordering do-it-yourself solutions online. Entomologists say tape and vacuuming aren't likely to eliminate the bugs and over-the-counter products might kill only the bugs that people can see.

"It's getting the ones that are hiding that is the problem," says Susan C. Jones, an associate professor of entomology at Ohio State University.

Write to Sara Schaefer Muñoz at sara.schaefer@wsj.com1

Saturday, March 15, 2008

Co-op sues couple for Easter wreath

Daily News
Saturday, March 15th 2008, 4:00 AM

The grinches who stole Christmas are gunning for Easter.

The stuffy overlords of a posh Gramercy Park building are suing two men who thumb their noses at building rules by displaying holiday decorations on their apartment's door and windows.

"This is ridiculous," sniffed Richard Belza, 45. "It's not like we're damaging the place, and the decorations are very tasteful."

A lawyer for 32 Gramercy Park South said Belza and partner Andrew Meehan, 40, have received repeated reminders that holiday decorations are banned in the building.

"Rules are rules, that's part and parcel of living in a co-op," said Michelle Quinn, a lawyer for the co-op board. "If you want to put up holiday decorations, go live in a house somewhere."

Belza, a floral designer to the stars, said he and Meehan, a translator, have rotated their holiday displays for years without any complaints from neighbors or building management.

"I've gotten many compliments on my windows," he said. "People tell me they know what holiday is coming up just by looking at my windows."

Just this week, Belza said, he put up an Easter wreath featuring brightly colored eggs.

"It's not like it's propaganda or anything to do with politics," he said. "These are just holiday decorations."

Quinn said the decorations - particularly those for religious holidays - have the potential to offend neighbors in the gracious mid-century building.

The suit, filed in Manhattan Supreme Court, points out that Meehan and Belza were warned in December about the wreath, garland and mat they put out for "the Winter holiday."

"This is a nice area," Quinn said. "You pay a lot of money for your co-op and you don't want to have to see tacky decorations."

The suit wants the men to be ordered to stop putting up any more displays. It also demands that Meehan and Belza pay the board's legal fees.

Belza, who said his past clients have included Mariah Carey and Chris Rock, countered that the co-op board needs to lighten up.

"I do stuff for celebrities, I work in the Hamptons and I can't decorate my own apartment?" he said. "Our decorations are festive."

Thursday, March 13, 2008

Tenants Gain Right to Sue Landlords for Harassment

BP: How will this new bill affect co-ops and condos? Can tenants now more easily sue boards of directors? ALB says "yes, absolutely".

March 13, 2008, 4:14 pm
Tenants Gain Right to Sue Landlords for Harassment
By Manny Fernandez

Mayor Michael R. Bloomberg signed a bill into law this afternoon giving tenants the right for the first time to sue their landlords in Housing Court for making threats against them, disrupting essential services and using other tactics that qualify as harassment to force them out of their apartments.

The City Council approved the new law last month with overwhelming support from tenant groups, housing advocates and legal aid lawyers who said landlord harassment of tenants had increased in recent years.

Previously, the city’s housing maintenance code had not classified harassment as a violation, so tenants were restricted in taking their landlords to Housing Court for problems with services or the physical condition of units. The law signed today makes harassment a housing code violation and entitles a judge to impose civil penalties for harassment from $1,000 to $5,000. It takes effect immediately.

“While we believe that the vast majority of landlords throughout the city are responsible and do not engage in tenant harassment, we cannot turn our backs on the bad actors who participate in such behavior,” Mr. Bloomberg said at a bill signing ceremony at City Hall.

Harassment is defined in the new law as the use of force or threats, repeated interruptions of essential services, the frequent filing of baseless court proceedings and other acts that “substantially interfere with or disturb the comfort, repose, peace or quiet” of any unit’s lawful occupant, the law states.

The law was opposed by the Rent Stabilization Association, a trade group representing 25,000 New York City property owners and managers.

Mitchell Posilkin, the association’s general counsel, disputed claims by the law’s supporters that tenant harassment was a widespread problem and said there already existed at least 10 laws that addressed tenant harassment, including the city’s Illegal Eviction Law, which dates to the early 1980s and makes it a misdemeanor for a property owner to use force or intimidation to evict a tenant.

“In light of all of the existing remedies that are available to tenants and in light of the failure of any of the bill’s supporters to document or establish any patterns of harassment in the City of New York or any systematic harassment, it leads one to question what the motives behind this legislation really are,” Mr. Posilkin said.

Tenant leaders, housing activists and City Council members, including the Council speaker, Christine C. Quinn, gathered on the steps of City Hall shortly before the mayor signed the bill to celebrate what they described as a much-needed new layer of protections for New Yorkers living in the city’s two million renter-occupied units.

“What we are doing today is admitting, from government, that we know this type of tenant harassment happens, and we’re sick and tired of tenants not having the right to go to court and prosecute their landlords when they engage in this behavior,” Ms. Quinn, a former housing organizer, told supporters at the rally.

Real estate industry says tenants' rights bill will clog courts
The Real Deal
by Jen Benepe
March, 03, 2008

Real estate lawyers and lobbyists say a newly-passed bill that allows tenants to sue landlords for harassment would jam up the court system.

The bill, which the City Council unanimously passed last Wednesday, must be signed by Mayor Michael Bloomberg. It allows tenants to sue landlords for harassment, which can include incessant buy-out offers by owners eager to turn low-performing units into high-end rentals, the bill's sponsors said.

Adam Leitman Bailey, an ALB Law PC attorney who represents both landlords and tenants, said the bill was "irresponsible" and would unleash a flood of frivolous cases.

Council Member Melissa Mark Viverito, one of the co-sponsors of bill 627-A, disagreed, saying the vast majority of housing court cases are initiated by landlords.

"It is a great day in the city when we can provide added protection for tenants against over-aggressive landlords who intend to force them out," said

Another co-sponsor, Daniel Gardonick, said the bill "responsibly balances [tenants'] rights with safeguards for landlords from tenants who may try to overreach."

Several council members say they are receiving more complaints from residents who claim they are getting pestered to move or have had services denied repeatedly as a way to force them out.

Bloomberg is expected to sign the bill, which the Housing Preservation and Development department endorsed with minor changes at two public hearings. But Bailey, the real estate attorney, said the mayor might think twice because the city will need "a new court house to accommodate all the new cases."

The Rent Stabilization Association, which represents the city's rental property owners, and The Real Estate Board of New York opposed the bill.

"We call it the landlord harassment bill," Steven Spinola, REBNY's president, told The Real Deal for an article in its February issue.

Spinola had said that the Housing Preservation and Development department should first provide evidence of a violation before a tenant can sue for harassment.

The only change HPD agreed to in the final bill was a clarification that tenants should not be able to sue while a landlord is attempting to fix service interruptions or problems, said Mark-Viverito.

The final bill also eliminated one and two-family homes from the harassment designation.

Tuesday, March 4, 2008

Parents, Put Away Your W-2s! Manhattan Insurer Will Be Your Kid's Co-Signer

BP: Maybe this company could provide this service for co-op boards too. It would be nice to make a purchase applicant whose financials are weak get a guaranty such as this... Looks like they do!

The New York Observer
by Chris Shott
March 4, 2008

Finally, no more embarrassing calls from fairly well-employed thirty-somethings to their baffled parents in the sticks. "Dad, can you co-sign?"

Manhattan-based Insurent Agency Corporation announced Tuesday a new program to insure renters whose income levels do not meet the ridiculous 40- to 50-times-the-monthly-rent formula required by greedy landlords citywide.

Full details below.


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Icon, Cape Advisors Sign on for Nation’s First Lease Guaranty Program

Helping Landlords Increase Occupancy and Eliminate Rent Loss at No Cost

(New York, NY—March 4, 2008) – Offering the first-ever institutional guarantor of residential leases, Insurent Agency Corporation launched the Insurent® Lease Guaranty Program this week, and has begun to sign New York’s residential landlords to its Program. The Insurent® Program increases occupancies, eliminates rent loss, and streamlines the leasing process, all at no cost to the landlord. Jeffrey L. Geller, Vice Chairman & Chief Operating Officer of Insurent Agency Corporation, made the announcement.

“Insurent® is a unique solution to expedite lease closings and solve problems for landlords, brokers and renters,” Mr. Geller said. “The Program is free to landlords and management companies, and represents an innovation in an industry to secure rent rolls with institutional capital. The Program is primarily applicable when renters’ income levels do not satisfy the 40x-50x monthly rent multiple required by landlords. With Insurent®, landlords are able to reduce vacancies without cost, without risk and with less hassle. Landlords simply accept the Program, renters pay for it. By eliminating the lengthy and often intrusive individual co-signer process for renters, the Program creates a win-win situation for all parties.”

The Insurent® Lease Guaranty Program guarantees full payment of rent under residential leases to landlords. The Program is underwritten by a highly rated insurance company, A- (Excellent) by A.M. Best.

Already, The Icon Group and Cape Advisors have signed on to accept the Insurent® Lease Guaranty Program in their properties.

“Empty apartments are the #1 source of rent loss for owners, and the Insurent® Lease Guaranty Program is a process whose time has come,” said Todd Cohen, principal of The Icon Group, one of the early adopters of the Insurent® Lease Guaranty Program and owners of over 1,000 rental apartments on the Upper East Side, in Greenwich Village, Chelsea and on the Lower East Side of Manhattan. “Icon is dedicated to providing the highest levels of service and management for our apartments, and the Insurent® Program will enhance our ability to streamline the rental process, increase occupancy and avoid rent loss due to delays in qualifying credit-worthy tenants.”

As many as one quarter of prospective renters entering the New York market each year do not meet the minimum financial requirements of landlords. These renters include recent college and professional school graduates entering the workforce, creditworthy non-U.S. executives relocating to the U.S. without any U.S. credit history, self-employed professionals and non-salaried high net worth individuals – all of whom require some type of credit enhancement such as co-signers or additional security deposits to qualify. Insurent® eliminates the risk of rent loss by replacing the cumbersome system of individual parent/co-signer guaranty pledges, additional security, or prepaid rent with an institutional guarantor.

With Insurent®, the prospective tenant applies and, if qualified, the landlord receives a policy that guarantees payment under the lease. The landlord is the insured and beneficiary of the policy. The tenant pays a one-time fee typically representing less than one month’s rent. Renters now have an alternative to the current practice of providing significant additional security or finding “qualified” co-signers.

To expedite the leasing process, prospective renters can pre-apply for an Insurent® Lease Guaranty and, if qualified, receive an Insurent® Qualification Certificate to present to brokers or landlords prior to the lease execution.

The Insurent® Lease Guaranty Program was launched by a team of experienced professionals in the insurance, real estate, credit and corporate finance industries. The Insurent® Program will be available in other major markets including Washington, D.C., Boston, Chicago, San Francisco, Los Angeles and Miami within the next 12-24 months.

“We’ve spent years creating a product that would make this common and necessary business transaction easier—and more secure—for everyone involved,” commented Robert Rosenberg, President and CEO of Insurent Agency Corporation. “Insurent® will become a ‘seal-of-approval’ valued by both landlords and renters. It is incredible to think this product was never available before.”