For board members and managing agents, one issue that will rally unit owners to action is the renovation of individual units. I have observed that most boards and managing agents handle renovations poorly, treating them as liabilities and nuisances, not as enhancements to the property and quality of life.
Board members and managing agents are mainly ill-informed on best practices when renovating, likely because if these processes were handled more efficiently, architect and engineer consultants would substantially reduce compensation. Typically, boards and managing agents focus on the alteration agreement, making it as costly and onerous as possible in the misguided belief that somehow this “protects” the building. This makes renovations more expensive without improving the building in any respect, while damaging the reputation of the building for buyers.
Boards and managing agents would be better off developing sensible policies based on practical construction considerations. One practice would be to prohibit “wet over dry” — kitchens and bathrooms (areas with plumbing) may not be relocated above areas that do not have plumbing on lower floors. Another is to encourage all-electric kitchen renovations to gradually reduce or eliminate gas service. Part of that entails supporting increased power to kitchens. New York apartment kitchens have traditionally been underpowered.
Another sensible policy would be to encourage unit owners to improve insulation in walls and ceilings to reduce energy waste. Making standard selections of acceptable insulation materials and techniques would be a better use of money than tormenting unit owners with uselessly complex alteration agreements.
Boards also need to assess fireproofing. New fire-retardant paints and coatings can slow the spread of a fire more efficiently and effectively than drywall. In small apartments, these new materials are projected to be popular and less expensive than drywall due to lower labor costs.
Replacing flooring is also problematic for some boards. The policy issue that should be considered is how to soundproof stone floors in living areas. If unit owners are replacing wood floors with tile or stone, it would be best to have a standard policy on soundproofing materials. However, the more common practice is using sustainable woods such as bamboo. Also, the law states that 80% of the living space floor is supposed to be carpeted in multiple dwelling units.
Before implementing policies, it is important to review the building declaration or offering plan. Many offering plans and declarations include provisions for gas service to kitchens. If you choose to promote all-electric kitchens, do not penalize those who keep gas for now. As gas access becomes limited, unit owners will eventually switch to electric kitchens. The building documents may also limit a board’s ability to encourage additional insulation. The board may have the obligation to insulate if the unit owner’s property or leasehold is to the finished wall.
If the cost of insulation is minor, and in an atmosphere of cooperation, unit owners are likely to cooperate. On the other hand, the board may have to wrap pipes or blow in insulation if there is resistance.
One mistake to avoid is imposing burdensome insulation requirements if the obligation falls on the board. By doing so, the board is likely to be sued for breaching the offering plan or declaration. Even if the obligation falls on the unit owner, making it “excessively difficult” may be deemed against public policy, as outlined in Local Law 97 of 2019.
Be mindful that if boards make sensible rules about materials, there will be less motive and less reason for contractors to engage in risky work in units. Also, the more logical the safety and protection requirements are, the more likely the unit owners and contractors will comply with them.
One final word of caution to boards regarding adopting policies for renovations: Be reasonable and logical. Do not look to increase unit owner expenses or inconvenience; rather, work to make the process simple and efficient. In the long term, that will work in favor of the building in terms of property values.
Finally, do not use unlicensed architects or interior designers to review engineering and architectural plans. It may look like an inexpensive route, but the unlicensed party is liable to suit for unlawful practice as a design professional, and the board opens itself up to charges of breach of fiduciary duty. Using unlicensed personnel will not be protected by the business judgment rule.
This column presents a general discussion. This column does not provide legal advice. Please consult your attorney for specific legal advice.
Carol A. Sigmond
Partner
Greenspoon Marder LLP
1345 Avenue of the Americas, Suite 2200
New York, NY 10105
carol.sigmond@gmlaw.com
(212)524-5074
