Occasionally, I receive questions from the public regarding the subject of managing agents. These questions often encompass issues such as discrimination by managing agents in favor of or against unit owners, seemingly irrational decisions regarding alterations, and problems with noisy neighbors. Over the years, I have been surprised by how few questions I receive about managing agents and maintenance issues. The common belief is that maintenance is solely a building staff responsibility, which often leads to residents feeling frustrated with resident managers and superintendents. This belief, however, is unfounded.
Building maintenance is a significant part of a managing agent’s responsibilities. A managing agent with a competent maintenance plan and a solid strategy for selecting contractors is an asset. Conversely, a managing agent whose maintenance plan is simply to “wait until it breaks” and chooses contractors for reasons other than skill and pricing is a liability. While resident managers and superintendents can provide valuable suggestions and execute the maintenance plan, the ultimate responsibility lies with the board and the managing agent.
Most members of cooperative and condominium boards are not familiar with building maintenance and, as a result, rely heavily on managing agents to address unplanned maintenance. This dependence is not always beneficial.
Consider a recent incident in a Manhattan building. The superintendent wanted to use a reliable plumbing firm for rooftop tank piping and pump work. However, the managing agent opted for a different firm, allegedly to save on costs. The chosen firm failed to install a junction box and incorrectly wired a pump. When the pump failed, the company returned to make repairs, but in the process, a valve opened. Due to the missing junction box, water flooded the elevator shafts, damaging the motors and panels of all the elevators in the building. Residents had to climb stairs for several days while waiting for parts. Astonishingly, the managing agent did not provide bottled water for residents, which was rather inconsiderate, especially given the high temperatures at the time. Furthermore, the managing agent did not pursue an insurance claim against the negligent contractor, ban it from the building or refuse to pay for its substandard service.
This example illustrates poor management practices concerning maintenance. Maintaining rooftop tanks is critical for building operations. A company with a solid track record that is already familiar with the building and the tank is unlikely to overlook installing a junction box. In contrast, a company vying for work based solely on price, without any commitment to the building, is not an ideal choice.
Further evidence of inadequate management is the failure to hold the offending contractor accountable for the damage caused. Expecting unit owners to navigate stairs in a high-rise while simultaneously paying for the privilege is unreasonable. This managing agent has not performed well in terms of maintenance.
Board members and unit owners/shareholders need to be able to evaluate managing agents’ performance concerning maintenance planning. Be wary of prioritizing price over a thorough quality job. Remember that the superintendent will advocate for higher-quality contractors to avoid inconveniences for tenants. Listen to the superintendent; they are on-site, familiar with the building, and sensitive to tenant concerns. When a contractor fails—as in this example—and the managing agent is reluctant to hold the contractor accountable or propose banning them from the building, it is important to ask, “Why?” There is no good answer to this question, which should prompt a board to start thinking about the overall performance of the managing agent.
A managing agent has two essential functions: keeping the financial and ownership records in order and overseeing building maintenance. Ultimately, if the managing agent is not supporting a solid maintenance program for the building, with a one-, five- and 10-year maintenance schedule and a list of approved contractors for the superintendent to use for emergencies, that group should be replaced.
The criteria for replacement should focus on the two functions noted: financial and ownership record keeping and a solid maintenance plan. The third key function is building communication, but new technologies, such as email and link-type programs, have become more routinely effective.
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
