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DECEMBER 2019

FEATURES 26 Ramping Up ADA lawsuits are on the rise BY FRANK LOVECE 32 Stolen Data The nightmare at 26 your doorstep BY SUE TREIMAN AND BILL MORRIS 36 36 The Numbers Don’t Lie How proxy fraud was uncovered at Great Neck Terrace BY PAULA CHIN 32 42 What a Year It Was A flurry of new regulations will shape your future BY BILL MORRIS 48 42 Compliance in Plain English An excerpt from the 2020 edition of the NYC Apartment Management Checklist 48

WWW.HABITATMAG.COM December 2019 | HABITAT 1 ONLINE www.habitatmag.com DEPARTMENTS The digital portal to co-op/condo news Toolkit Community in New York 6 Raising Your 14 The Great Adapter NEWSLETTERS Building’s IQ John Ruggirello’s life has Smart buildings use tech to been a string of surprises. E-newsletters cut costs and emissions. Habitat news in your 16 Off the Market inbox every week. 8 Live-In Supers http://bit.ly/HabSignUp To Get Overtime Pay 18 She Asked a Lot Good records are the best of Questions defense against lawsuits. As a co-op board novice, Amy Basile had to learn fast. 9 Planner 20 Sighs Matter 10 Virtual Meetings In pursuit of that extra bit Just Got Easier of apartment magic. Shareholders can now attend annual meetings remotely. 22 Repairing Tudor City’s Stressed Terra Cotta 11 Board’s Demands Decorative details are Can Hurt Sellers getting some tough love. Requiring an inspection after WEEK BY WEEK closing is “backwards.” 24 The Subletter Who Broke Bad 12 A New Revenue Stream? Who’s responsible when a Judge says holders of unsold sublet turns into an Airbnb? shares must pay sublet fees.

Habitat Week by Week Board business in bite-sized bits. 4 Welcome Available on all digital devices. http://bit.ly/HabitatWeekByWeek 52 Management Transitions LEARN 52 Building Loans www.habitatu.com Free, online courses for 52 Ad Index board directors of co-ops and condos 6 54 Marketplace CONNECT 18 56 Crossword facebook.com/HabitatMag @HabitatMag

twitter.com/HabitatMag @HabitatMag 14 linkedin.com/company/ habitat-magazine

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641 Lexington Ave. 10th Fl., New York, NY 10022 RuddRealty.com BY CAROL J. OTT, PUBLISHER & EDITOR-IN-CHIEF DECEMBER 2019 VOLUME 38 NUMBER 370 FOUNDED 1982

PUBLISHER AND EDITOR-IN-CHIEF IT WAS AN ORDINARY Carol J. Ott [email protected] u Thursday morning when ASSOCIATE PUBLISHER I opened my email to see that Bill Fink [email protected] dreaded message: “You’ve been OPERATIONS MANAGER Pwned.” In plain English, that Leslie M. Strauss [email protected] means that my log-in credentials EDITORIAL DIRECTOR to some website or database had Tom Soter [email protected] been stolen. Could be my email MANAGING/ONLINE EDITOR Bill Morris and password combination, my [email protected] credit card number, or maybe, if EDITOR Kathryn Farrell my luck is really on the rocks, [email protected] my Social Security and driver’s COPY EDITOR Charles McEwen license identifiers. My morning CONTRIBUTING WRITERS was ruined, and on top of every- Bendix Anderson Michele Cardella thing, my coffee got cold. Paula Chin Dale J. Degenshein Next March, your mornings Frank Lovece might become a bit scarier, too. Myles Mellor Marianne Schaefer That’s because New York’s Sue Treiman

ART DIRECTOR SHIELD (Stop Hacks and Improve Chad Townsend Electronic Data Security) law goes [email protected]

CONTRIBUTING ARTISTS into effect, placing co-ops, condos, Marcellus Hall managing agents, and other profes- Jeff Moores

COLLECTIONS SUPERVISOR sionals in its crosshairs. All that data your board and managing agent have Bill Hoover on potential purchasers, sublettors, and owners needs to be protected and COVER Illustration by Marcellus Hall secured. The law has teeth, it has fines, and it means business. If requirements for the coming year prove to be a wake-up call for tightening your corporate ship, 2019 year has been a momentous warm- up. New energy requirements with long-range planning and funding scenarios are putting governing skills to the test, while sloppy legislating that has lumped co-ops into the rent-regulated housing pool means stan- dard operating procedures don’t work anymore. HABITAT® (ISSN-0745-0893; USPS 681-510) The Magazine serving New York Co-op/Condo Board Directors & Building You may be a teacher, banker, or entrepreneur by day, but you’ll need Managers, is published monthly except for a combined issue sharp governing tools at night to steer your co-op or condo through the in July/August by The Carol Group Ltd., 150 W. 30th St., Suite 902, New York, NY 10001. Periodical postage paid at New morass of all these regulations. We’re here to help, and wish you and York, NY and at additional mailing offices. POSTMASTER: Send address changes to: Habitat, PO Box 326, Congers your board health, wisdom, and smart decision-making in the new year. NY 10920-0326. Copyright © 2019 by The Carol Group Ltd. All rights reserved. Reproduction in whole or in part without Enjoy the issue. permission is prohibited. The editors assume no responsibility for unsolicited manuscripts or photographs. Postage must accompany­ all materials if return is requested. Editorial and Advertising Sales Offices: 150 W. 30th St., Suite 902, New York, NY 10001; (212) 505-2030 fax: (212) 254-6795. Co-op/condo board corporate subscriptions are $70.00 per association, entitling up to 4 board directors to receive their own copies of each issue. Additional board members’ subscription rates can be found at www.habitatmag.com/ subscribe. Individual subscriptions are $49.95 for one year. Canadian and foreign subscribers­ must contact Habitat for rates. Single copies of most issues are available prepaid at $5.

4 HABITAT | December 2019 WWW.HABITATMAG.COM Hercules CP Mobile App Residents now have everything at their fingertips

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550 West John Street • Hicksville, NY 11801-1039 1-800-526-5760 • www.hercnet.com ENERGY RETROFIT Because most things don’t hap- pen at one time, he says, you need to make sure that first-step decisions won’t eliminate future options. “You Raising Your Building’s IQ can put in a new set of wireless sen- BY CAROL J. OTT sors that talk to your boiler,” he says, “but it could be some proprietary system that doesn’t allow you to inte- WHAT CAUGHT OUR EYE. Smart heating system responsive to the vari- grate with another building system.” u buildings. ous temperatures on the inside of your Technology should use standard com- Say what? No offense, but your building, rather than on what the weath- munication protocols that can inte- building is probably kind of dumb. erman says is outside, you would be grate with other systems you might Not because it’s inherently a bad on your way to a smarter building. In want to install down the road. building, but because its energy one fell swoop you could increase the Expert insight. “From a building- infrastructure works as it did in the comfort of your residents and lower owner standpoint,” Zuluaga says, early aughts. Take a typical heat- your energy expense and carbon emis- “smart should mean responsive to the ing system that monitors outside sions. Given the looming requirements people in the building.” temperatures and heats the building – and potential fines – of the city’s new From a utility perspective, a smart accordingly. This method, which Climate Mobilization Act, now is the building is one that’s responsive to has worked for most buildings since time to invest in your building’s smarts. the grid. “Buildings that can be smart they were built, is lagging in light of The big question is where to about when they use electricity or gas, today’s technology. To still be using begin. “It’s a process,” says Marc depending on time of day, translates what worked when energy was cheap Zuluaga, CEO of engineering consul- into operating cost savings,” says and climate change was not an issue tancy Steven Winter Associates, “that Zuluaga, “but it’s a bit removed from is, to be blunt, dumb. involves putting in new technology being responsive to the actual needs Why it matters. Resident comfort, and fixing the pipes and vents and the of building residents.” Since many energy expense, and carbon emissions. hundred-year-old stuff so that it can of the smartening steps qualify for If you could make your building’s all work holistically.” New York State Energy Research and Development Authority (NYSERDA) incentives, understanding this is important in your decision-making. Risk. Overcomplicating your build- ing. Think of your building as an engine. You want it to be responsive to your needs and at the same time to be aware of costs imposed by the larger world. What you don’t want is a new system that is not a good fit for your building’s existing system, or its staff. “Training is very, very impor- tant,” Zuluaga emphasizes. “We’ve all been in buildings that have had control panels ripped out because there’s not a training component – and the technology is not used.” The takeaway. Define goals to smarten your building that make sense, irrespective of the technol- ogy that is available, and then come up with a game plan that utilizes the

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6 HABITAT | December 2019 WWW.HABITATMAG.COM With a footprint spanning every corner of Manhattan as well as Brooklyn & Queens, Halstead proudly manages 200+ Buildings 21,500 Units with our dedicated, professional support team.

Leslie Winkler, President t. 646.485.6138 | halsteadmanagement.com 770 Lexington Avenue, New York, NY 10065 exemption contained in the state New York Wage Order. Thus, based on the opinion, as well as several recent court decisions that concur, boards must provide overtime pay to live-in superintendents, even in instances where a union contract provides to the contrary. So how can boards avoid an over- time lawsuit by a superintendent? First, they must keep track of the hours a superintendent works, either by a sign-in sheet, punch clock, or other reliable method. Second, they must have a policy that a superin- tendent cannot work overtime hours unless he has written authorization from the board or managing agent. The only exception would be for emergencies, such as a flood or fire. In that case, the superintendent would be

SHUTTERSTOCK/DIMJ required to report the overtime hours to the managing agent or board after GOVERNANCE the emergency work has been com- pleted. In non-union buildings, boards should enter into an employment contract with the superintendent that Live-In Supers addresses these items and the other terms and conditions of employment. Superintendent lawsuits also fre- To Get Overtime Pay quently include claims under the New BY EMANUELA LUPU-FERRANTE AND JACK MALLEY York Wage Theft Prevention Act for failure to provide the superintendent with a hire notice that discloses, IN OUR PRACTICE, we have seen damages” (which double the amount among other things, the employee’s u an uptick in lawsuits by live-in of wages owed), and the employee’s regular hourly pay rate and overtime superintendents and other full-time attorney’s fees. pay rate, and for failure to include employees against cooperatives, The question of whether state or certain required information in the condominiums, homeowners’ asso- federal law controls superintendent employee’s pay stubs. ciations, and even managing agents overtime claims had been a source of Employers can be liable to the (who are defined as employees under confusion, but there has been a recent employee for as much as $5,000 for federal regulations). These lawsuits clarification. The pertinent state law each violation, depending on how are frequently commenced after the is the New York Department of Labor long the violation lasts. Boards can employee has been terminated, and Building Service Industry Minimum avoid these risks by providing all they typically allege that the employer Wage Order (the New York Wage new employees with a hire notice failed to pay overtime wages. Order). Under this law, live-in super- that is available on the New York Unfortunately, many boards cannot intendents are not entitled to overtime Department of Labor website, and adequately defend themselves against pay. In contrast, the federal law, which by demanding an assurance from its these lawsuits because they have not falls under the Fair Labor Standards payroll company that its pay stubs kept records of the employee’s hours Act (FLSA), requires employers to pay comply with New York law. worked, which they are required to overtime to live-in superintendents. And remember: keep track of your do by law. In most instances, with- On March 14, the U.S. Department superintendent’s overtime. n out these records, the employer is of Labor sought to resolve this con- liable to the employee for the unpaid flict by issuing an opinion that the Emanuela Lupu-Ferrante and Jack overtime wages the employee claims overtime requirements set forth in the Malley are partners at the law firm to have worked, plus “liquidated federal FLSA supersedes the overtime Spolzino Smith Buss & Jacobs.

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WWW.HABITATMAG.COM December 2019 | HABITAT 9 TECHNOLOGY Virtual Meetings Just Got Easier BY KATHRYN FARRELL

A NEW STATE LAW amends u the Business Corporation Law KANTIWONG SHUTTERSTOCK/TAPAWAN (BCL) to allow co-op shareholders to participate in meetings remotely, via “What this does now,” says Marc allows these far-flung shareholders to live video stream or a conference call. Schneider, managing partner at the vote electronically. Since the amend- The most obvious benefit of this is to law firm Schneider Buchel, “is say ment was made to the BCL but not make it easier for co-ops to reach a that a corporation may implement the Real Property Law, it does not quorum at their annual meeting. In the reasonable measures to provide apply to condominiums. past, remote attendance was allowed shareholders not physically present at Teleconferences and stream- only if shareholders had previously the meeting a reasonable opportunity ing meetings where votes are not agreed to amend their bylaws. to participate.” The amendment also required are not brand-new. Mark Levine, principal of the management company EBMG, has used technol- ogy to make special meetings more accessible. “I have, on occasion, had open meetings dealing with a special topic like construction or an update from management or the architect,” he says. “Because it’s not a meeting that’s going to have voting, we don’t have to check the quorum.” An important part of the amend- ment is the requirement for “reason- FAMILY-OWNED SINCE 1971 able” verification. A board that wants to introduce remote meetings has to ensure that there is a way to verify the WOMAN OWNED COMPANY identity of each remote participant. BACKED BY A LOT OF MAN POWER “The reason why that’s in the law,” says Schneider, “is because we don’t ® We offer a boutique style of service want to essentially have somebody be able to vote for you when they’re not ® We are compassionate and caring to you or they weren’t given a proxy.” our customers But will boards actually take advan- ® While still being competitive tage of this leap into the 21st century? with the “Big Box” Boyz! “I think it’s going to take some time,” ® Offering state-of-the-art laundry rooms says Levine. “I think that part of the interest of the annual meeting is that it’s also a community in its neighbor- 1-800-THE-WASH hood. That’s when everybody likes to get together and see who’s there, see www.automaticindustries.com who’s new to the building, kind of check in once a year.” n

10 HABITAT | December 2019 WWW.HABITATMAG.COM SALES Board’s Demands Can Hurt Sellers BY TOM SOTER

A CO-OP SHAREHOLDER found u a buyer for his unit, the buyer sailed through the board interview without a hitch, and the seller had SHUTTERSTOCK/PORMEZZ already bought a new home. But the board had one last request. sign a statement at closing confirming the building a bad reputation among The seller was told that the unit that the cooperative has no responsibil- brokers, making it more difficult to had to undergo an “exit inspection” ity for the condition of the apartment.” sell apartments in the future. Such by the super, who flagged something Hanja argues that perceived anti- behavior can also lead to litigation by that had previously been approved seller behavior by the board can give an unhappy seller. n during a post-renovation inspection. This alleged violation would require the seller to remove a middle kitchen cabinet because the fuse box, though accessible, was behind a cabinet door. The seller was given the option of informing the buyer that the cabinets were a code violation and they would need to assume the risks, or the board would not sign off on the sale. The buyer walked. The situation was grossly mis- handled by the board, says Siim Hanja, an associate real estate broker at Brown Harris Stevens. “To allow a situation where someone goes to contract and then has to have an inspection – it’s [completely] back- wards. You need to have a rule that says if you intend to sell your place, the board insists upon having an inspection of your apartment before the closing to make sure that there’s nothing of any liability to the co-op.” The law seems to be on the side of the co-op, however. “Most contracts of sale for cooperative apartments provide that the apartment is sold ‘as-is,’” says Marc Luxemburg, a partner at the law firm Gallet Dreyer & Berkey. “Many cooperatives require the purchaser to

WWW.HABITATMAG.COM December 2019 | HABITAT 11 LEGAL A New Revenue Stream?

BY BILL MORRIS BESTIARY SHUTTERSTOCK/ICONIC because, as an original purchaser during Kelly Ringston, a partner at JUDGE NANCY BANNON of the the co-op conversion, she was protected Braverman Greenspun who success- u State Supreme Court’s Appellate by Paragraph 38 of the proprietary lease. fully represented the West 62nd Street Division ruled this fall that the stan- After ruling that Pastena did not co-op board, is still flabbergasted by dard provision in many co-op propri- qualify as a holder of unsold shares – Judge Bannon’s pronouncement. etary leases that protects the holders which was the question before the court “Why did the Appellate Division of unsold shares from paying sublet – Judge Bannon added these explosive turn the world on its head?” Ringston fees is “void as a matter of law.” words: “However, even if factual issues says. “This ruling is causing a high The law firm of Braverman were presented by plaintiff’s contract level of anxiety for people who repre- Greenspun successfully defended the of sale, Paragraph 38 of the proprietary sent holders of unsold shares. As soon co-op board at 61 West 62nd Street lease, which purportedly exempts as the ruling came out, my phone when a shareholder named Janis holders of unsold shares from certain started ringing. People wanted to Pastena sued the board, claiming she expenses and fees assessed by the land- know what was happening. Attorneys was exempt from paying sublet fees lord, is void as a matter of law.” wanted clarification. It seemed to me like a scrivener’s error, a typo. But until there’s clarification, it’s there. It’s a precedent. Lawyers will use it as a negotiating tool. Why not?” PROPERTY MANAGERS STOP WORRYING One lawyer who has already used the ruling to a client’s advantage ® Manufacturers and Installers of Our is Andrew Stern, a partner at Tane State-of-the-Art Apple-Pak Compactor Waterman & Wurtzel. When a holder of unsold shares demanded a refund ® Installation of sublet fees from Stern’s co-op and Repairs of Smile!! board client, Stern pointed to the rul- Refuse Chutes Big Apple ing in the Pastena case and persuaded and Hopper Compactor is the holder of unsold shares to drop the demand for a refund, which he Doors on the job! says would have been “sizable.” ® Fast, Reliable “This is a previously untapped rev- Service on All Makes and enue stream for many co-op boards,” Models of Compactors Stern says. “Ultimately, it’s up to boards to decide how they wish to assess these ® Complete Chute Cleaning Service fees. The watchword is that you have to ® Licensed Fire Sprinkler treat all shareholders equally. This puts Contractor #651B boards on much stronger footing.” In light of the confusion Judge Bannon’s ruling has caused, Stern says his firm is preparing a guidance for its BIG APPLE COMPACTOR COMPANY INC. co-op board clients and their property 64-20 Laurel Hill Blvd., Woodside, NY 11377 managers. “We assume that as people Phone: 718-205-8580 • Fax: 718-205-4590 wake up to this possibility, they’ll start Email: [email protected] to assess sublet fees on unsold shares,” Web: www.bigapplecompactor.com Stern says. “It’s potentially a substan- tial revenue stream.” n

12 HABITAT | December 2019 WWW.HABITATMAG.COM Wishing everyone a wonderful holiday season and a happy and healthy New Year

We are pleased to welcome to our portfolio the following properties:

• 45 East 80th Street

• 132 Perry Street

• 397 West 12th Street

For superior management services please contact: Paul J. Herman, President/Director of Management 212-508-7357 | [email protected]

Brown Harris Stevens Residential Management, LLC 770 Lexington Avenue New York, NY 10065 TAKING CHARGE The Great Adapter BY BILL MORRIS

THE BUILDING IS not going to u win any beauty contests. It’s a blocklong brick box that looks like a gigantic, ill-conceived layer cake, with horizontal chocolate and vanilla stripes punctuated by smallish win- dows. Zero ornamentation. Definitely not a thing of beauty. “It’s the ugliest building in all of Chelsea,” says John Ruggirello with undisguised glee. “No,” counters his wife, Marie, “it’s the ugliest building in all of New York City. It’s an eyesore.” “But when we bought our apartment here in 1987,” Ruggirello adds, “we said we won’t have to look at the building when we’re inside our apartment. Now it doesn’t even look that bad to us.” ARTIST ON BOARD: As a matter of fact, Chadwin John Ruggirello is House, the seven-story, 110-unit always adapting. condominium at 140 Seventh Avenue MORRIS BILL and 18th Street, is looking pretty good these days, owing in large part to them. But it’s hard to keep it afford- but to impose an assessment to cover to Ruggirello’s three decades of ser- able because the cost of everything the unexpected cost overruns. vice on the condo board and his tire- keeps going up, and the city makes it The board also raises the common less efforts to keep the building clean, hard. Look at the new elevator regula- charges by a few percentage points democratic, functional, and, above all, tions. Because the city was negligent every year to make sure the reserve affordable. That last goal gets more and someone died in a housing-project fund stays healthy. This board is made difficult every year, he says, thanks to accident, the city goes overboard. up of hard-nosed realists. “We hash a city government that seems to enjoy Same with the sidewalk sheds.” out every dime,” Ruggirello says. burdening co-op and condo boards Speaking of the unloved sidewalk with costly regulations and taxes. shed, Chadwin House just under- An Art Form Vanishes “I try to keep it affordable for all the went its mandatory cycle of facade If a single thread runs through John people in the building – and for Marie repairs under Local Law 11, a job that Ruggirello’s life, it’s his ability to and me,” says Ruggirello, now 68, was supposed to take one year but adapt to changing circumstances. his silver hair pulled back into a tight stretched to two – because the con- Growing up on Staten Island, he ponytail. “When we moved in, we had tractor was overextended and couldn’t dreamed of following the footsteps of certain services. All we want to do is meet deadlines. Ruggirello and his six his father, uncle, cousin, and brother improve those things, rather than add fellow board members had no choice CONTINUED ON P. 16 »

14 HABITAT | December 2019 WWW.HABITATMAG.COM Energy-efficiency programs designed to help tenant retention soar.

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See all the possibilities at ngrid.com/multifamily and becoming a firefighter. But he Ruggirellos opened Atomic Signs, Off the had been wearing glasses since third which is still going strong today grade, and he flunked the vision test. thanks to their mastery of computer- So he fell back on another dream – to cut vinyl. Their clients include the Market become an artist. He studied drawing fashion designers Ralph Lauren and and painting at Marycrest College in Issey Miyake and the fine artists Davenport, Iowa, where he wound up Lawrence Weiner and Mel Bochner. dating his roommate’s ex-girlfriend, “I just love working with artists – Marie Carson, a fellow aspiring artist. even though you don’t get paid any They married and soon became par- more than you get paid painting a ents of a son, Andrew. truck,” Ruggirello says. “It’s the field While continuing his studies to Marie and I came out of, and it brings become an art teacher, Ruggirello us closer to the art world. And I think managed the shoe department in a our art background helps the artists.” chain store before getting hired as In his three decades living in a sign painter, a job that fed off his Chadwin House, Ruggirello has seen artistic streak and his work ethic. All the building and the neighborhood the while, the newlyweds were sub- – the entire city – undergo stagger- scribing to The Village Voice, a tenu- ing change. When he and Marie ous tie to Ruggirello’s hometown. arrived, the building was home to After a decade in the Midwest, the teachers, artists, ambulance drivers, family finally moved to Staten Island city employees, a rabbi. Then came a UPPER EAST SIDE to be near Ruggirello’s parents. major recession, the AIDS epidemic, 245 East 93rd Street, John had been working as a boom years, another recession, and No. 29A sign painter for a decade when the today’s galloping prosperity. Young Ruggirellos bought their apartment in couples with families and people 2BR/2B condo. The unit has views Chadwin House, and he kept painting working in finance are typical buyers east and south and has been newly everything from the sides of build- at Chadwin House today. converted into a two bedroom, with ings to store windows and truck doors Through all the changes, though, a large living room that has floor-to- while Marie was making good money Ruggirello says one thing has ceiling windows and abundant clos- as a photo-retoucher. Then along remained unchanged. It goes back to ets. The master bedroom has space came computers, killing both crafts. “I his grandfather, who immigrated from for a king-size got to be one of the best hand-painters Sicily, and his father, the firefighter. bed and a wall in town,” Ruggirello says, “and then “Whatever they had to do, that was of closets. The THE ASK: suddenly the art form was gone.” what they did,” Ruggirello says. second bedroom $1.27 million Once again, it was time to “Same with me. I’ve always adapted, has French THE GET: adapt. With Marie in the lead, the and I’ve always worked.” n doors and could $1.2 million be comfort- The layer cake ably used as THE WAIT: known as an office, den, 53 weeks Chadwin House. or guest room. Both the master bathroom and the powder room are large and in excellent condition. The apartment offers central air-condition- ing, an in-unit washer and dryer, and a 7-by-7-foot private storage locker in the basement. Monthly RE Taxes: $1,180. Common Charges: $936.69.

Selling agent: Carole Armstrong, DJK Residential Listing agent: Alexander Ionescu, Halstead Manhattan GOOGLE

16 HABITAT | December 2019 WWW.HABITATMAG.COM Seeking VIDEO SERIES 32 Problem-Solving Counsel Legal Strategies

WATCH NOW http://bit.ly/Seeking-Counsel GIVING BACK: HABITAT: What did you do when you Amy Basile’s first came to New York? co-op board is BASILE: First, I worked in investment a “strong team.” banking and private equity, but I left to become a teacher. I think it’s my social responsibility to educate chil- dren. My mom passed away when I was 12, and there were plenty of teachers who were there for me. They knew my situation and gave me their time after school. Over time they stepped into a parenting role, and that was what I needed. I feel that I always want to give back. When I first came to New York, I was volunteering at the Bowery Mission. They were helping men to get their life on track, going from home- less to a home, to a job, to some sort of trade, maybe a GED. So between 1999 and 2001, I went there once a week. People do good things for you, and you realize that there’s something rewarding to doing something similar. Then you do it, and if you have the ability to do it well and people think you do a good job, you keep doing it.

HABITAT: Recently you became

MARIANNE SCHAEFER MARIANNE a newbie on your co-op board. Why did you join? MY TURN BASILE: There was an opening, and I knew a lot of people on the board, really good and talented people, and She Asked a Lot they suggested, “Why don’t you run for the board?” I now work at the Department of Education, where I of Questions manage big work streams and teams. I always liked working with strong BY MARIANNE SCHAEFER teams, and our co-op board is a strong team. MATHEMATICS RUNS in Amy Basile’s family. She grew up in the Boston I didn’t know what board work u suburb of Waltham, Mass., where her father was an accountant and her entailed. I didn’t know exactly what my mother was a homemaker. After studying math at Wellesley College, Basile, now role would be, but I’m invested in this 45, made her way to New York, where she works for the city’s Department of community. We’ve been here for 18 Education. She is married with two young children. Less than a year ago, Basile years now. I’ve had my kids here, I had became the newest member of the board in her 175-unit Greenwich Village co-op. a dog – she passed away, but everybody knew my dog, and everybody knows my kids. So it’s a nice community. I HABITAT: What brought you to York City has a lot of that. When I like being a part of things. And they New York? was in college I had an internship in liked me, so I’m on the board. BASILE: I have an Italian grand- New York City and, after that, two mother who was an immigrant, and job offers. So I said, “Sure, let’s do HABITAT: What are the challenges for I always saw things from her point it!” New York City seems excit- a brand-new board member? of view, struggling with language, ing when you’re from a suburb in BASILE: I don’t think there’s ever a struggling with identity – and New Massachusetts. good time to jump in, but I jumped

18 HABITAT | December 2019 WWW.HABITATMAG.COM Hankin & Mazel PllC Proud to provide personal legal services to co-ops and in midyear, and there were decisions condos, large and small, for over 30 years. in the works. As soon as I joined, I was immediately in on a lot of emails attorneys at law going back and forth about stuff that I didn’t have the background to understand. But the way I got through it – and I would recommend this to Mark Hankin and Geoffrey R. Mazel, Partners any new board member – was to find 7 Penn Plaza, Suite 1602 • New York, NY 10001 some time with the existing board 212-349-1668 • [email protected] members and just sit down and ask a www.hankinmazel.com lot of questions. The board meeting is not always the best time for that because it’s always after hours; it gets late. People Prepare Now, So You Don’t Get Left Out have to make decisions and move In The Cold This Upcoming Winter things forward. There are a couple of board members who were just absolutely wonderful and would The Current Landscape The Solution give me two hours on a Sunday for Many businesses rely on two Don’t wait to choose a reliable three Sundays in a row just so I could energy sources for their heat and heating oil provider to count on understand things. They helped me hot water: natural gas AND heating during these winter cold snaps, one oil. Better known as “Dual Fuel organize things, how this document who can also supply you with your Customers”, these commercial natural gas all year long. is related to that decision or that proj- properties rely on natural gas for the ect. Then, when the emails started majority of the year. However, when When you buy your natural gas the temperature dips below 20F, going back and forth, I could make an from Marathon Energy, during utility companies mandate that these a gas interruption, Marathon informed decision. properties switch off of natural gas, guarantees your uninterrupted and onto heating oil. Why? Because supply of heating oil, otherwise there simply isn’t enough natural gas HABITAT: What do you enjoy most Marathon pays the fine! capacity to fill the required demand about your work on the board? during very cold weather. With inventory positions at two BASILE: Myself and two other board of the largest oil terminals in New The Problem members started a communications York Harbor, Marathon Energy is the only energy company that committee, and then I started getting Although it does not sound like a problem on the surface, there is offers natural gas supply AND really interested in what the board often a major problem lurking for guaranteed heating oil delivery was doing around capital projects. dual fuel customers, and that is to its dual fuel customers, giving you the peace of mind knowing Capital projects are very complex, that they simply are unable to get the heating oil they need to switch you will never run out of fuel, and they definitely have to be bro- off of gas and onto oil. When this regardless of how cold it gets. With ken down into understandable bits happens, these properties have our own fleet of trucks on the road, we have complete control over of information so that shareholders two choices: keep using natural gas against the utility’s directive and the scheduling and routing of our understand that what the board is incur massive fines for doing so, or deliveries ensuring we get to each doing is in their best interest. go without heat or hot water, leaving and every customer all winter long.

And the long-term sustainability of the building and its employees/ residents literally left out in the cold. Call Marathon Energy today to the building is very important to me. sign up for your winter heating The things that I’m passionate about Today, there are fewer and fewer oil and year-round natural gas, ensuring your business operation or believe in strongly come through heating oil companies to rely on to fill your tank. When demand runs smoothly 365 days a year, in my job or my work on the board. spikes, the few remaining heating regardless of what Mother Nature I care about community, I care about oil companies simply do not have may throw your way. giving back to the community, I care the bandwidth to fulfill the high demand. Furthermore, these oil Chris Donnellan about strong, effective teams mak- companies will often choose to fill Director of Sales ing decisions. And I also care about only the largest delivery requests [email protected] the future of the planet, and what it that come in, leaving the rest of the 718.564.2246 customers on empty. has in store for my kids and all of the kids in this building. All the kids in New York City, for that matter. Everybody should be aware of the inner workings of their buildings. It’s pretty cool. n

WWW.HABITATMAG.COM December 2019 | HABITAT 19 IN MY BUILDING pocket door was supposed to slide into so we could put in wiring for a heated towel rack.” And then came the sigh. “I feel like I’m in a hotel every day.” Another friend recently moved Sighs Matter from a ground-floor apartment in a no-service building in Lower Manhattan to a condo in downtown BY MICHELE CARDELLA Brooklyn. Now she has a doorman and a gym and a garbage chute that I MET A WOMAN from My Lower Manhattan co-op is more allows her to put out the trash even u Connecticut who had just moved than safe and comfortable and conve- on non-pickup days. But the best from a colonial-style house on a tree- niently close to friends, family, and part, she tells me, is sitting on her lined street to a waterfront cottage on food. Still, I was envious – not because balcony, looking out at a parcel of tall a car-free peninsula with spectacular I wanted to live at the beach, worry- trees. Whenever I ask how she is, the views of Long Island Sound. Now ing about storm damage and sand in answer is always the same. “I’m in she has to use a wagon to haul items my food, and not because I longed to paradise,” she sighs. home from the town parking lot sev- come home dragging a wagon or leave I began paying closer attention to eral blocks away. When I asked if she paddling a kayak. I just wanted that the décor of my fellow shareholders missed being able to drive right up to little extra bit of magic. in our amenity-free building, looking her house, she let out a sigh. “I feel And so, I discovered, do others. A for signs of personal bliss. Instead of like I’m on vacation every day.” friend in New Jersey explained that crown moldings, one neighbor has I realize being anything less than her remodeled master bathroom has no antique wooden fishing poles hung satisfied with my current living door because, “after a trip to London, high across his walls. Another camou- arrangement borders on gluttony. we gave up space in the wall the flages the cityscape by covering her windows with shelves of lush green plants. But my neighbors’ most popu- lar link to paradise seems to be display- ing photos from memorable vacations. We HANdLe All SpriNkLer SYSteM I was not optimistic that a framed iNSpeCtioNS & VioLAtioNS picture of dawn at Cadillac Mountain or sunset at Big Sur would make me sigh. But flipping through photo albums, I stopped at a shot my daugh- SPRINKLER ter took of me in Cozumel, Mexico. SYSTEM I’m facing away from the camera, lying in a hammock tied to two palm trees, a stack of novels on a nearby wicker table. This had been my happy place that week, where I could find a measure of calm while I waited for my daughter to return from her daily scuba trips. In the evenings, over lovely, leisurely suppers, she would tell me Big Apple Fire Sprinkler Co. Inc. about her underwater adventures, and Alan Levitt | #651B | Licensed Master Fire Suppression Contractors I would share plot twists in the books I read swinging in the hammock. Sprinkler System Design Maintenance, repair Flow and The hammock. I thumbed back and Installation and service Pressure tests through the albums. Me in a ham- mock in someone’s backyard. Me in Stand Pipes Violation Removals Monthly Inspections a hammock on a tropical island, on and Fire Pumps Governors Island, in a state park, in a national park. That’s it! A hammock | | 64-20 Laurel Hill Blvd., Woodside, NY 11377 P: 718-205-8580 F: 718-205-4590 could be my year-round, sun, rain, | [email protected] www.bigapplesprinkler.com or snow bit of apartment magic. And since bliss was unlikely to occur while

20 HABITAT | December 2019 WWW.HABITATMAG.COM I was worrying about bolts wriggling loose if I hung it from the ceiling, I purchased an aptly named travel hammock – a lightweight, stream- lined stand that would fit in the space between my desk and the television. Paradise was taking shape. My sister, who was visiting from Cleveland to celebrate our mother’s birthday, assembled the interlocking poles and screws in the dining room, where the finished product turned that night’s birthday party into a hammock-warming, with each guest taking a turn. The following morning, I emptied out the cake crumbs and pushed the stand into the den, next to a small, book-covered table, then left for the day. That evening when I came home, I kicked off my shoes and poured myself into the hammock. I dangled one leg off to the side so that my toes touched the floor and gener- ated a gentle rocking motion. Then I MOORES JEFF picked up my book. And sighed. n

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WWW.HABITATMAG.COM December 2019 | HABITAT 21 “We used to do repairs, and they would last for a long time,” says Oswald Bertolini, a principal at the architec- LION KING: tural firm, but now the Department of Tudor City’s terra Buildings is less likely to accept patch cotta is getting some love. repairs, so “there is pressure from the city to do repairs that are more lasting.”

COURTESY BERTOLINI ARCHITECTURAL WORKS ARCHITECTURAL BERTOLINI COURTESY Built in 1929, Woodstock Tower is one of 13 apartment buildings created BUILDING RX by the famed architect and devel- oper Fred F. French at his Tudor City complex in the Murray Hill Repairing Tudor City’s neighborhood. The brick tower is clad in broad limestone blocks close to the sidewalk. Higher up, its dark Stressed Terra Cotta bricks are ornamented with hundreds BY BENDIX ANDERSON of terra-cotta details, clay that was shaped in a mold, then dried, glazed, and fired in a kiln. (Some terra cotta HIGH ON THE WALLS of an 20,000 individual pieces of decora- is fired without glazing.) u apartment tower in Manhattan, tive terra cotta – including lions, gar- “Terra cotta is a really great deco- a six-foot-tall statue of a lion is goyles, and gothic arches – all glazed rative material, much lighter than cracking up. “When terra cotta fails, in gray to resemble carved limestone. real stone and a lot cheaper,” says it fails catastrophically,” says Eric A significant number of those details Vonderhyde. With a heavy coating Vonderhyde, a principal at Bertolini – as many as 20 to 30 percent – may of glaze, Woodstock Tower’s terra- Architectural Works. eventually need to be replaced. cotta lions and gargoyles were almost Woodstock Tower, at 320 East Simply repairing cracks in the terra impervious to rain and weather. 42nd Street in the Tudor City Historic cotta has worked for years, but it may “Glazing,” Vonderhyde says, “is a District, is covered with roughly no longer be enough. very dense surface.”

22 HABITAT | December 2019 WWW.HABITATMAG.COM However, since the building opened 90 years ago, much of the glazing has worn. That allowed water to soak the terra cotta, and in cold weather, the water froze and expanded, cracking the ornaments. Every five years, experts inspect the facade at Woodstock Tower to comply with New York City’s Local Law 11 and certify that no part of the building is in danger of falling to the sidewalk or street. Experts examine thousands of ornaments through bin- oculars. The most recent report was filed in February 2017. “We were surprised by the damage,” says Bertolini. Ornaments like the terra-cotta lion high up on the building show cracks probably caused by water intrusion. Waterproof patches could cover many of the cracks, but for terra- cotta pieces with worn glazing, water will quite likely seep into the piece again and make new cracks. “The Landmarks Preservation Commission feels replacing the ornaments with materials other than terra cotta alters the feel of the build- ing,” says Vonderhyde. “We are going to see more and more whole- sale replacement. Very few materials get 80 or 100 years of life.” Bertolini is helping the build- ing’s co-op board plan to preserve this historic landmark and keep it in compliance with local laws. The firm has identified numerous terra-cotta ornaments that should be replaced before the next round of Local Law 11 inspections, due in 2022. The work is expected to be costly and time-consuming. One reason is that there are only two factories left in the United States that create the kind of terra-cotta ornaments used at Woodstock Tower. As the co-op board sets its budget for the work, it needs to consider that once workers get close to the ornaments, they may find more damage that the inspectors could not see through binoculars. For this reason, Vonderhyde says, “we advocate for a robust contin- gency budget of 30 percent or 40 per- cent of the total budget – but typically get about 20 to 25 percent.” n

WWW.HABITATMAG.COM December 2019 | HABITAT 23 CASE NOTES The Subletter Who Broke Bad

BY DALE J. DEGENSHEIN

RUSSELL KLING MOVED into SHUTTERSTOCK/ILUISTRATOR u his condo apartment at 129 Lafayette Street in Lower Manhattan After an uneventful first year, Throughout November, however, in 2007 but moved to Canada a few Kling was made aware by a friend Stratton refused to allow prospective years later. He retained the condo unit, that Stratton was illegally listing the tenants to see the apartment, and he and in 2014 he decided to sublease it apartment on Airbnb. Kling planned still had not vacated the apartment according to the bylaws. His tenant, to wait until Stratton made his sec- by December 1. That was when Michael Stratton, went through the ond year’s payment to discuss the things got ugly. board’s subletting process, submit- listing, but in October 2015, Stratton Kling reached out to the condo’s ting an application to the management alerted Kling that he would not be legal representatives to let them know company and the board. The board able to make the lump payment. what was going on. When Stratton approved his application, and he settled Stratton offered to make monthly left his keys with the condo’s door- in for a three-year lease term, to end payments, but Kling refused, and men, Kling told them not to give them in 2017. Stratton also agreed to pay the two agreed to dissolve the lease back. (Stratton called the police and his rent in a lump sum at the begin- and that Stratton would move out in got the keys back; he also changed ning of each year, instead of monthly. November. the locks on the unit.)

24 HABITAT | December 2019 WWW.HABITATMAG.COM Kling finally began an eviction informed the staff that these people package with references. A board proceeding against Stratton, and the were his guests, meaning the staff no has a right of first refusal, and most two settled. Under the settlement, longer had any authority to remove boards are not in the business of being Stratton agreed to be out of the apart- them. Staffers also cooperated with a landlord, nor should they be. The ment by March 2016 and pay Kling the police during the key incident. onus is properly on the owner of the a $100,000 judgment and back rent Kling’s complaint seemed to be less unit to determine whether the subten- totalling $64,000. about negligent supervision than about ant is likely to comply with the rules Kling then filed complaints against how the staff followed directions. His of the building. If the subtenant fails the condo board, the board president, claim was dismissed. to comply, it is the unit-owner who is and the property manager. He claimed The court discussed whether the responsible for the tenant’s behavior. that the condo board had breached its board’s decision to approve Stratton Nonetheless, condo boards should fiduciary duty in not screening Stratton as a subletter was covered under the review their rules and bylaws to see if and that it was negligent in supervising Business Judgment Rule. It was. The there is a way to amend them to effec- the staff, among other complaints. condo’s bylaws imposed no obliga- tively discourage bad behavior. n Kling believed that the building’s tions on the board to perform any staff should have taken action against due diligence on subletters, so the ATTORNEYS: Stratton’s misbehavior. However, court decided that the board was act- For plaintiff: Braunstein Turkish there’s nothing to indicate that the ing within the scope of its authority. For defendant: Boyd Richards staff did anything other than what Therefore, there was no breach of duty. Parker & Colonnelli they were supposed to do. No staff members were aware of Stratton’s Takeaway illegal listing until they were informed It can be difficult for condo boards to Dale J. Degenshein is a partner at of it in December 2015; when they know who is going to be a problem- Armstrong Teasdale. The statements became aware, they tried to stop rent- atic subletter, even if the board – as and views in her article are her own ers from entering. Stratton, in turn, some do – requires an application and not necessarily those of the firm.

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WWW.HABITATMAG.COM December 2019 | HABITAT 25 SHUTTERSTOCK/S_PHOTO RAMPING UP ADA LAWSUITS ON THE RISE BY FRANK LOVECE

NO CO-OP OR CONDO BOARD wants its commercial spaces to be inaccessible to the disabled. But a particular type of disability lawsuit may be targeting small businesses in your building, not with any intention of seeing them made fully accessible but simply to collect a token fee for the plaintiff and a large fee for the attorney through a RAMPINGquick settlement. UP December 2019 | HABITAT 27 It’s an updated version of ambulance- When the targeted businesses are in cover such obvious things as the need chasing, say critics, who note that your building, that puts your coopera- for a ramp if there’s a step up into targeted businesses are never sent a tive or condominium association on the a business, as well as more obscure letter with specific issues to cure and hook as well. While payouts to plain- items like the maximum height of any a time frame to do so, as is normally tiffs are generally only in the $500 to self-service counter with condiments, the case. “They wheel people around $1,000 range, legal fees to their attor- utensils, or tableware. the city looking for lawsuits,’’ says ney can be as high as $20,000. Your The laws also require expert inter- Emil Samman, a partner at the law firm insurance may not cover them – and pretation. Single-family homes are Romer Debbas, referring to lawyers who if it does, you may have to pay higher exempt, but co-op and condo lobbies fire off multiple disability lawsuits with premiums in the future. and other common areas are ques- the same boilerplate language, more to Are there pre-emptive steps a board tionable. While they normally are enrich themselves than to implement can take to avoid such lawsuits? What not subject to the ADA as a place meaningful change or help a client. are the most common things being tar- of “public accommodation,” says In many cases, that client is the same geted? How can a board protect itself? Weltchek, the possibility exists that plaintiff filing dozens of lawsuits against if there is a place of public accom- businesses they do not even patronize. A Plethora of Laws modation accessible only from the “The right of the [disabled] plain- New York co-ops and condos are vul- lobby, such as a doctor’s office, then tiff to have access is very clear,’’ nerable because multiple laws apply. the lobby entrance might have to be says Andrew Weltchek, an attorney And they are complex: Title III of made accessible to disabled people. at Cohen, Hochman & Allen, who the Americans With Disabilities Act “Otherwise,” he adds, “the lobby speaks on disability laws as they (ADA), which covers public accom- wouldn’t be subject to the ADA, relate to co-ops and condos. “But the modations and commercial facilities although it might be subject to the amount of fees the attorneys attempt such as a business in your building, Fair Housing Act.” to settle for can vary widely, and that runs to 261 pages. New York State’s Virtually all of the disability leads to some feeling like they were Human Rights Law clocks in at 49, lawsuits over the last decade or so victims of a shakedown.” and New York City’s at 53. They have involved commercial spaces,

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28 HABITAT | December 2019 WWW.HABITATMAG.COM says Samman, adding, “It’s mostly relatively minor,” he adds, “then improper entrances for ADA compli- by all means do it then and ance. Restrooms are usually an issue, there. But if you have an especially with restaurants.” old building and no one’s Street access is the most vulner- sued you yet, you can able area. Boards should ensure that kick the can down the any commercial space in their build- road. It may or may ings with an entrance not at sidewalk not be the most mor- level installs a ramp or has a portable ally upstanding thing, ramp available. Note that the ADA but you’re making requires a permanent ramp only if make a business installing one is “readily achievable”; decision to wait otherwise, a portable ramp is accept- until you might get able. If a business has two public caught.’’ entrances, only one, in most cases, If that’s the case, must be accessible. There is a bot- insurance becomes tom line, according to Samman: “If a especially impor- space is not ADA-compliant, there is tant. “Three types of potential liability there.” insurance might cover That means, says Weltchek, “the real it,” Weltchek says. “The issue is what is the cost-effective, legally building or the tenant or required, responsible business decision the owner will usually have a for the co-op or condo to make?” comprehensive general-liability “If you’re doing a major [retail- policy. Those rarely have coverage space] renovation and the cost of for ADA claims, but it’s worth look-

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WWW.HABITATMAG.COM December 2019 | HABITAT 29 Second, “the tenant will almost cer- But he adds: “Anybody could get tainly have an employment-liability sued. With a co-op, that could be the policy, since disabled employees, like IF THE COST OF board, the shareholder with the pro- disabled customers, are also a pro- prietary lease of the space, and the tected class,” he says. Finally, “you PUTTING IN A RAMP IS subtenant. With a condo, it’s usually may get an umbrella policy that covers whoever owns the commercial unit, miscellaneous risks,” he adds. “You and the tenant.’’ can consult your insurance agent and RELATIVELY MINOR, BY As a practical matter, Weltchek try to find coverage that would protect adds, if a struggling mom-and-pop you and at least see how much it costs. ALL MEANS, DO IT. restaurant has been sued, the owner of Then consult with an architect and get the space may want to chip in to help an estimate of what physical modifica- IF IT'S AN OLDER keep it in business and not create a tions would cost. Fixing the problems vacancy. might be cheaper than getting insur- BUILDING AND YOU There’s some grandfathering in the ance for the problem.’’ laws. Generally, if no building permit CAN'T INSTALL A RAMP, has been issued for your commercial Responsible Party space since 1992, the space’s owner Who’s responsible for making acces- THEN INSURANCE or tenant need only do what is “read- sibility changes? It depends. “The ily achievable” for ADA compliance. owner of the building and the tenant The law defines “readily achievable” in the space are both potential defen- BECOMES EXTREMELY as “easily accomplishable and able to dants,” says Weltchek. “Those parties be carried out without much difficulty enter into a lease that allocates that IMPORTANT. or expense.” burden, and almost always the tenant So, for instance, a restaurant that is responsible under the lease.’’ hasn’t made any material renovations in the last 27 years wouldn’t have to tear out its restrooms and renovate them, but it might have to install visual fire alarms to accommodate the hear- ing-impaired. If the commercial space has been issued building permits since 1992, then it must comply with the ADA unless doing so would be, as the law puts it, “virtually impossible.” Who’s Suing Whom? In the New York City area, most of the so-called “drive-by lawsuits” have been filed by B. Bradley Weitz of the Weitz Law Firm in Aventura, Fla. (The firm did not respond to a request for comment.) Between 2010 and 2017, Weitz filed 183 disability lawsuits for one client alone, Zoltan Hirsch, plus another 78 for Luigi Girotto, 64 for Mike Costello, and 62 for Kiran Vuppala, among others, according to a report by the Lawsuit Reform Alliance of New York, an Albany-based advocacy group. “It would be obvious for someone in a wheelchair to roll down a street to see if there are steps or other obstacles to get into a clothing store or bodega or any other business,” Weltchek says. One co-op subjected to such a suit

SHUTTERSTOCK/MRCMOS was 478 West Broadway in Soho. “A

30 HABITAT | December 2019 WWW.HABITATMAG.COM complaint was filed in [federal court] Cesarano & Khan, PC claiming an art gallery in the build- Certified Public Accountants ing was in violation of the ADA,” PRovidiNg PRoFESSioNAl SERviCES To ThE says Herbert Henryson II, an attorney CooPERATivE ANd CoNdoMiNiuM CoMMuNiTY who was the co-op board president in 2018 when Vuppala, one of the serial • Reporting on Financial Statements • Tax Services litigants, sued the gallery, the share- • Budgeting and Consulting • Election Tabulation Services holder entity that owned the space, 199 Jericho Turnpike, Suite 400, Floral Park, NY 11001-4000 and the co-op corporation. The co-op 516 437-8200 • 718 478-7400 • www.ck-cpas.com settled its part of the suit with the pur- Carl M. Cesarano, CPA • [email protected] chase of a $500 portable ramp, plus monetary damages of about $1,000 and fees to Vuppala’s attorney, Weitz. Nearly a year after the case was set- tled, Henryson asked the gallery staff if they’ve ever used the ramp. “And they told me no,” he says. The newest wrinkle? Lawsuits against websites that are not acces- sible to the visually impaired. “Lawyers are going after fine-art gal- leries,” Henryson says, “because their websites are not compliant.” The Need for a Master Plan Some states are addressing the spate of serial disability lawsuits. California plaintiffs who file such suits fre- quently must meet certain conditions and are charged an additional $1,000 court fee. Minnesota requires that before filing such a suit, the plaintiff or attorney must send the business a letter detailing the possible violations Management and giving the business an opportunity to make alterations; the letter cannot demand money to not file the suit. for the Ages Whether or not such measures come to New York, Ethelind Coblin, 100+ Years / 380+ Buildings / the principal of her namesake archi- tectural firm, advises boards to have 1000s of Satisfied Owners, Residents and Boards an architect or engineer look at their l State-of-the-Art Financial Reporting buildings holistically and create a l Responsiveness & Communication are Our Top Priorities master plan covering problem areas l Leader in Technology & Compliance Tracking that need to be addressed. “Some l Energy Auctions & Volume Purchasing to Reduce Building Costs things can’t be resolved so easily,” l Long-Term Continuity of Managers & Systems she says. “There are tradeoffs that l Greening NYC One Building at a Time have to be made. But the building has to be aware of what issues it’s facing, so that when someone comes to you [about a disability issue] you can say, ‘You are right, here’s what we’re looking at, and here are our RANKED #1 RESIDENTIAL MANAGEMENT COMPANY IN NYC limitations.’’’ 675 Third Ave. New York, NY 10017 212-370-9200 That may not prevent drive-by ellimanpm.com [email protected] lawsuits, but at least you’ll be better prepared. n

WWW.HABITATMAG.COM December 2019 | HABITAT 31 STOLEN The nightmare at your doorstep

he thieves managed to condominiums. The 55 people who Eight years later, co-op and steal more than $2 million were eventually indicted ranged from condo boards or their property before they got caught. bankers to Brooklyn street gang managers are still treating person- T They did it through iden- members to a compliance officer at ally identifiable information (PII) tify theft and financial fraud, with the property management company. with less care than it deserves. the help of insiders at a major New During the course of the investigation Social Security, bank account, and York City bank, a charity, a car deal- by the Manhattan district attorney’s credit card numbers, plus email ership, and a property management office in 2011, two of the gang mem- addresses and passwords, are all

company that services co-ops and bers were brutally murdered. things criminals can exploit. THERASAKDHI SHUTTERSTOCK/JOE DATA

BY SUE TREIMAN AND BILL MORRIS

December 2019 | HABITAT 33 “I can unequivocally say people don’t Step by Step are urged to destroy copies after the appreciate how significantly a security The first step boards and their man- meeting or send them to FirstService breach can affect property, residents, agement companies should take is a to be cross-cut shredded. and the board,” says Sandy Jacolow, top-to-bottom assessment. “You have The mandated safeguards come in who oversees technology initiatives at to know what you’re protecting and three forms: administrative, techni- a real estate brokerage and investment where your protected data is stored,” cal, and physical. Once the board has firm, the Meridian Capital Group. says Alan Winchester, head of the determined where its data is stored, For those who still fail to grasp cybersecurity practice group at the the next step is to have an admin- the significance of a data breach, Jay law firm Harris Beach. “Boards have istrator – most likely an employee Hack, a banking lawyer at Gallet, to know if their management company of the management company or Dreyer & Berkey has a blunt piece of uses a processor, a third-party vendor a third-party vendor – coordinate advice: “Wake up.” that holds their information.” the security program. This admin- Many management companies use istrator or security officer must Another New Law such third-party vendors to store and select service providers capable of Is Coming protect personal data. The Ferrara securing data and make sure those The wake-up call will come in March Management Group, for instance, security measures are required 2020, when New York State’s Stop has used Yardi Systems since Ferrara under contract. “The administrator Hacks and Improve Electronic Data was founded in 2013. “All paper pur- has to identify foreseeable risks,” Security (SHIELD) law goes into chase applications are automatically effect. SHIELD requires all businesses uploaded into the system, and then handling personally identifiable infor- the paper is shredded,” says Robert mation – including co-op and condo Ferrara, president. Equal care is taken boards – to implement reasonable with vendors’ W-9 tax forms and administrative, technical, and physical residents’ Social Security and bank data safeguards. If they fail to comply account numbers, and other personal and identities are compromised, they data. “Yardi has a secure website,” can face fines, investigations, and Ferrara says. “We haven’t seen any lawsuits. Under current laws, the max- breaches against them.” imum fine for failing to notify those Another property manager, speak- affected by a data breach is $100,000; ing on condition of anonymity, uses under SHIELD, the number will bal- B.J. Murray management software loon to $250,000. And enforcement is with stringent security measures, expected to be more stringent. including dual authentication that “At a minimum, SHIELD makes allows employees to access personal data security a legal issue with liabil- data only on office computers, using a ity and penalties for lack of protocol, user name and password plus a physi- non-compliance, and any breach,” cal access key. Employees cannot says Jim Brune, chief executive at access data outside the office. “You boardpackager.com, an internet-based don’t know what employees have provider of secure record-keeping, on their laptops and iPads,” says the building diligence, and applications. president of the company. “That can says Winchester, the Harris Beach “It is now a compliance issue – not get into a secure system. And if an lawyer. “Management companies just awareness,” says Zhixiong Chen, employee goes onto a public WiFi need to train their employees on a professor of cybersecurity at Mercy network, that can be hacked.” the procedures that protect the data. College in Dobbs Ferry, New York. Ben Kirschenbaum, vice president They might need to hire a security “It means that co-op and condo boards and general counsel at FirstService provider. This is new. New York have to work on best practices on data Residential, says the company recom- State is saying that if you’re going to collection, storage, and retrieval. It is mends that board members restrict all collect information, you have to take time to do reconnaissance on existing PII viewing to FirstService’s secure reasonable steps to protect it.” data storage, decide what kind of data website. While it is company policy Technical safeguards require the are necessary for boards, and what that digital files not be copied to administrator to assess risks in net- kind of safeguards and auditing is printers, outside computers, or thumb work and software design, as well as needed. Boards can develop their own drives, Kirschenbaum acknowledges risks in the processing, transmission, data protection and breach notification that there is no technology preventing and storage of data. The administrator process, or they may seek solutions that from happening. When physical must detect and respond to attacks or provided by various vendors using the application packages are used, they system failures, and regularly test and cloud to distribute or offload risks.” arrive bound in shrink-wrap; boards monitor the effectiveness of controls.

34 HABITAT | December 2019 WWW.HABITATMAG.COM Technical safeguards include encryp- – tough questions. Are computer breached despite appropriate efforts, tion, two-factor authentication, fire- patches installed regularly? Are there’s not a lot of risk of liability. walls, and locking an account after “penetration” tests conducted to But if they were sloppy, the board repeated use of an errant password. check for weaknesses? Have poten- could be liable for all damages ‘prox- “This is over most people’s heads,” tial security holes been found and imately caused’ by the attack, plus, of Winchester says, “and most boards repaired? How often can the board course, the cost of removing any virus will probably need someone to help expect updates about the system’s that has infected the system.” them do it.” health? In short, what happens at Following a suspected incursion, And finally, physical safeguards every level to ensure safety? the security officer must first locate include preventing unauthorized As Winchester puts it: “The board and contain the incident. “Offer cor- people from accessing data, then is going to want to see evidence from rective measures to secure the breach, erasing electronic data within a rea- the management company that they’re which include running virus and mal- sonable amount of time after it is doing what they say they’re doing.” ware scans on all potentially affected no longer needed so that it can’t be computers,” advises Jacolow. read or reconstructed. Even copying After a Breach Edward Mackoul, president of machines come into play here. Many As we learned long ago from the Mackoul Risk Solutions, says many of today’s copiers have hard drives movies, no system is truly fail-safe. buyers of cyberinsurance are now add- that store every scanned image – Breaches will continue to occur. ing ransom coverage. As criminals become more sophisticated, they’re able to wipe out backed-up data before locking down a computer and mak- ing a ransom demand. Since a $1,000 policy will buy $1 million worth of coverage, Mackoul says, “there’s no reason why every board shouldn’t have a cyberinsurance policy.” The faster the compromised device or program is pinpointed and dis- connected from other devices and networks, the less costly the remedy. A single ransomware attack, still rare in real estate, can cost a busi- ness “$30,000 to investigate, another $30,000 to get help walking through the laws and rules, and tens of thou- sands more to notify everyone and cor- rect the issues,” according to Stephen Bedosky, vice president of York

SHUTTERSTOCKCYBRAIN International, an insurance brokerage. Once an attack is confirmed, which become accessible if the copier When a co-op’s or condo’s personal victims must be notified. The mes- is traded for a newer model. data is compromised, the SHIELD sage should explain exactly what Realizing this risk, Dawn law demands prompt action and, as happened, which files were com- Lombardo, the controller at the Ferrara noted earlier, imposes stiff penalties promised, how soon systems will Management Group, took preemptive for failure to notify people affected be operational, and what corrective steps. “We changed our copier three by a breach. And cyberinsurance, steps victims can take – with the months ago,” Lombardo says. “Joe increasingly common for co-op and board’s help. Normally, they are Rodriguez, my assistant and our IT condo boards and virtually universal given access to an identity protection guru, worked with someone from the in management companies, should provider, as well as ongoing coach- manufacturer, Toshiba, who had soft- not be regarded as a get-out-of-jail ing to help rebuild their compro- ware that wiped the hard drive before card. Compliance with the law is mised identities. the copier left the building.” essential. “If you break the law,” says “The simple advice for boards,” Once the safeguards are in place, one property manager, “insurance says Kirschenbaum of FirstService, though, the work is not done. companies won’t cover you.” “is to recognize your security needs, Jacolow of the Meridian Capital Adds Hack, the banking lawyer: understand the sensitivity of the infor- Group says boards should be pre- “If the management company has mation, and pretend it’s your own PII pared to ask – and keep asking done what it’s supposed to do and is that you have to protect.” n

WWW.HABITATMAG.COM December 2019 | HABITAT 35 The Numbers Don’t Lie

How proxy fraud was uncovered at Great Neck Terrace

BY PAULA CHIN

When the Great Neck Terrace co-op in North Hempstead, in Nassau County, held elections in 2018, the atmosphere was toxic. The campaign at the 650-unit complex – a mix of middle-income share- holders dating back to its conversion in the 1980’s, plus newer residents and families – had been brutal, pitting long-entrenched board members who held the majority against a slate of younger candidates.

36 HABITAT | December 2019 WWW.HABITATMAG.COM SHUTTERSTOCK/STEVE HEAP DAVID PERLSTEIN DAVID

Turnout at the annual meetings had exactly surprised. When he was first – an effective majority since two typically been low, and the elections elected to the board as treasurer in seats are held by the sponsor who, were so close that every vote counted. 2012, he was shocked to discover that by an informal agreement, votes for That meant that proxies – a docu- board members had been playing a its own representatives and not any ment authorizing a specified person to shell game with the co-op’s money. shareholder candidates. vote your corporate stock, generally “There hadn’t been a maintenance “I think at the beginning they had because you cannot attend a meeting increase in 15 years because they good intentions to do things for the – could tip the balance. wanted to make units easier to sell,” community,” Perlstein says of the The ballots were counted and, once he says. Proceeds from flip taxes entrenched majority. “But that took again, the older directors held on to were being funneled into the operat- a wrong turn pretty quick, and then their majority. But David Perlstein, an ing budget instead of the reserves, they were hanging on for the power upstart who became board president in which, according to Perlstein, and glory.” 2013, saw telltale signs of foul play. explained why badly needed capital Indeed, Perlstein had first suspected For one, the number of votes cast was projects – from roof replacements and proxy fraud in 2016. “I went to the unusually high, with more than 80 facade restoration to replacing side- co-op’s attorney with my concerns, percent of shareholders participating walks and rehabbing the parking lots but he would never investigate or in person or by proxy, compared with – hadn’t been done. follow through,” he says. “I also about 60 percent in past elections. As treasurer, Perlstein, the direc- contacted the Nassau County district Perlstein also knew how many tor of internal audits at the Shubert attorney, but since the number of con- proxies his allies had – and that those Organization, Broadway’s biggest tested ballots wasn’t high enough to proxies should have been able to elect theater owner, set about putting have changed the election outcome, a majority of directors. The only way Great Neck’s books in order. He my complaint was moot.” they could have fallen short would assisted the refinancing of the $25 have been if someone had voided million underlying mortgage with Legal War Breaks Out some of their proxies and replaced NCB, securing an extra $8 million That didn’t appear to be the case in them with forged ones. “It was clear to do repairs and funneling flip-tax 2018, however. Perlstein reached out that there was tampering involved,” proceeds into the reserves. But bitter to attorney Steve Wagner, the man- he says. “It was proxy fraud.” divisions persisted, and going into the aging partner at Wagner, Berkow & Given the history of mismanage- 2018 elections the old guard still held Brandt, who had represented Great ment at Great Neck, Perlstein wasn’t four seats on the nine-member board CONTINUED ON P. 40 »

38 HABITAT | December 2019 WWW.HABITATMAG.COM Creating Election Protocols BY PAULA CHIN

A clear-cut election protocol is your best defense against fraud, and putting one together is rela- tively simple. There are several steps to take:

1. Get legal advice: Consult with your attor- shows up at the annual meeting, he or she ney, who can draft the protocol document. can revoke the earlier proxy, since only the “Boards shouldn’t do this with their manag- one dated last is valid,” Wagner says, adding ing agent, because he or she won’t neces- that in the contested election at the Great sarily understand all the legal implications,” Neck Terrace co-op, all of the 60 fraudulent says Steve Wagner, the managing partner proxies were dated at the 7 P.M. start time of at the law firm Wagner, Berkow & Brandt. the meeting. “It was a little too brazen.” “Generally, co-op counsel should know how 4. Tally the proxies: As for the all-important tal- to do it, but if there has been a lot of rancor lying, in addition to impounding ballots over- in past elections and counsel hasn’t been night, board members must not be present effective, it’s time to bring someone else in.” during the actual counting. “If you have two 2. Check your governing documents: If your very contentious sides, you can allow repre- governing documents allow proxies, the sentatives from each to be present, but not forms are typically sent out with the meeting the candidates themselves or members of notice, but they can also be made available their family,” he says. There must be a thor- at the management office or online. It’s up to ough, careful check of proxy form signatures boards to decide whether they want to use against your co-op records, such as propri- a general proxy that gives the holder discre- etary leases and recognition agreements. tion to vote as he or she wishes, or a specific proxy that provides the holder with explicit 5. Enforcement: The best-laid plan, how- instructions on how the owner wants to vote. ever, won’t be effective unless it’s strictly Boards can require voters to turn in prox- enforced, which is why Wagner recom- ies beforehand, which makes it possible mends that larger buildings hire a third to check signatures against the co-op’s party, such as the Honest Ballot Association, records before the actual balloting. “That’s to serve as inspector of the election – and a good way to head off problems early,” instruct its employees to follow your proto- Wagner says. “But it does require an amend- col to the letter. “It puts people on notice ment to the bylaws.” and has a chilling effect on fraud,” he says. “I’ve seen this system used over and over 3. Authenticate the proxies: On election night, again, and it’s always successful.” Wagner recommends having a spreadsheet that lists each shareholder’s name, apartment 6. Contested elections: In cases where the number, and the number of shares held, election is contested, boards should give chal- then checking a photo ID before handing out lengers two or three business days to submit ballots. Both proxies and ballots should be a written statement; if the complaint seems authenticated by marking them with stamps, valid, you need to have your inspector verify initials, or a designated watermark to ensure the results before certifying them. “You don’t they’re not tampered with or copied. “It’s want a dark cloud over the board,” Wagner also a good idea to have the proxy attached says, “and you want to avoid litigation if there to the ballot, so if a shareholder actually is another way to resolve things.” n

WWW.HABITATMAG.COM December 2019 | HABITAT 39 THE you to keep track of how many bal- lots are in circulation, and that those used are the ones that were distrib- ALL-NEW uted. Another option is to have voting done through a computer program that requires a password for each shareholder or unit-owner. “There are a lot of variations on the theme,” he adds. “Nothing’s etched in stone.” War Gives Way to Peace The Great Neck co-op’s 2019 elec- tions, which were held this summer, went off without a hitch. “All the ballots and proxies were impounded, and several questionable ones were

SHUTTERSTOCK/ANDRII YALANSKYI SHUTTERSTOCK/ANDRII put aside,” says Wagner. “When the counting was finished, they weren’t Neck in the past. “I asked to look at signatures on proxies against the enough to have made a difference in the proxies, and the co-op attorney signatures on corporate records, such the outcome, so there was no need to said I’d have to go to court to do it,” as proprietary leases, alteration agree- go over them, and the results were Wagner says. Perlstein and three ments, and letters on file. certified.” other shareholders promptly filed suit “Basically, we’re talking about any Meanwhile, capital projects at the contesting the election results. document that has a signature on it,” sprawling property are continuing, the “We took advantage of a special he says. “And since you can’t exactly reserve fund stands at just under $5 provision in the Business Corporation check everyone at the door when million, and values for the garden-style Law that allows you to get in front you’ve got a 600-unit co-op, we now apartments are at an all-time high. of a judge very quickly,” Wagner have a complete and accurate sign-in “Shareholders are happier because explains. “We were allowed to look at sheet with the names of sharehold- they can see we’re focused on fix- the ballots, proxies, and sign-in sheets, ers and the correct number of shares ing problems,” says Perlstein. “They and when we compared the signatures they each have. We also specified that know there will be maintenance on the proxies with those on the co-op people show picture ID when they increases every year, but everything documents, we discovered there were sign in, which they hadn’t been doing is open and transparent, so they can some 60 proxies that had clearly been in the past.” see that we’re spending wisely.” signed by the same person.” Great Neck also hired a new elec- Still, he’s not resting easy. “I didn’t The result was swift. Two of the tion company – and instructed it to plan on staying president this long, but entrenched members were forced to follow the protocol to the letter. “Yes, I worry about who’s going to fill the resign and were also barred from run- it’s unusual, but outside companies void if I leave,” he says. “The people ning or serving on any board commit- have their own ways of doing things, who were forced to resign are still lob- tee for five years. “On top of that, the and it’s not necessarily how you bying and have a loyal following, and co-op had to pay my legal fees and all would do them,” Wagner explains. “I they can run again in a few years.” the costs incurred in the challenge,” would never assume that they can just If they do, elections at Great Neck says Wagner. “The candidates who handle it all.” – which hired Wagner as corporate should have been seated were seated, That said, there’s no one-size-fits- counsel – will be completely above- which flipped the balance of power.” all solution when it comes to the board. “Now we can verify things With things set right, the board proper preventive measures. Smaller upfront instead of having to figure faced a question: how did the fraud buildings, for example, don’t need a out what went wrong after the votes happen – and what could have been protocol, since there are fewer proxy are in,” Wagner says. “Going to court done to prevent it? “They had a ballot ballots and less potential for fraud. takes time and money, and it casts a company, but it was retained merely “But at any building with 60 units or cloud over the board. But you won’t to sign people in and count the votes, more, it doesn’t hurt to have them in have to with the right protocol in and not to make sure that the proxies place,” Wagner advises. place. Whether you have an indepen- were valid,” says Wagner. One sure way to avoid fraud is to dent firm or your management com- To ensure fair elections going distribute each ballot as the apartment pany count the ballots and check the forward, he sat down with the board owner is checking in, and to have it signatures, boards should always talk and developed a formal written pro- authenticated by either numbering, to them and explain exactly how you tocol, which includes checking the stamping or initialing it, which allows want the job done.” n

40 HABITAT | December 2019 WWW.HABITATMAG.COM THE ALL-NEW BOARD BUSINESS BROKEN DOWN INTO BITE-SIZED week by week BITS

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42 HABITAT | December 2019 WWW.HABITATMAG.COM WHAT A YEAR IT WAS

A FLURRY OF NEW REGULATIONS WILL SHAPE YOUR FUTURE BY BILL MORRIS

he year 2019 brought a blizzard of new laws that will change the way co-op and condo boards operate for years – even decades – to come. Everything from T carbon emissions to building staffs to roofs will be affected by this legislation. And the time for understanding and complying with these laws is now. Here are some steps boards need to start taking in 2020 – and keep taking in the years ahead.

WWW.HABITATMAG.COM December 2019 | HABITAT 43 The Climate Mobilization complex as replacing the boiler. “You reducing building emissions, which Act (Local Law 97) have a certain number of options,” now account for more than two-thirds This landmark city law – one of the Unger says. “You can save energy. of the city’s greenhouse gas emis- most ambitious in the world – is prob- You can change the fuel you’re using. sions. But help is on the way. ably causing the most anxiety among You can put solar panels on the roof. co-op and condo boards. It sets strict You can purchase carbon offsets. Or PACE Financing limits for carbon emissions by build- you can pay the fines.” (Local Law 96) ings 25,000 square feet and larger, and An advisory group is working now on The Climate Mobilization Act includes it establishes stiff fines for buildings a system of “carbon trading” that will the option for co-ops (though rarely for that fail to meet these targets. The lim- allow non-compliant buildings to avoid condos) to pay for energy-efficient ret- its begin phasing in at the end of 2024, fines by buying credits from buildings rofits without major upfront cash out- then emissions must be cut 40 percent that are under their emission limit. lays. Any retrofit that relies on renew- by 2030 (from a 2005 baseline) and “Some boards will definitely face able energy sources or reduces the 80 percent by 2050. The good news is major capital work,” Unger says, “but building’s energy consumption could that 80 percent of the affected build- there are a lot of little things that can be qualify for Property-Assessed Clean ings will clear the 2024 hurdle without done to improve New York City heat- Energy (PACE) loans. These are repaid making any changes. Everyone else ing and cooling systems.” He advises through a line item on property tax bills, spread over the life of the improvement. The program will be admin- istered by the New York City Energy Efficiency Corporation, a nonprofit that helps finance energy- efficient projects. There are other ways to pay for retrofits, including needs to get busy. Now. And most buildings will need to take steps to meet the 2030 limits. “Boards need to go to their property manager and say: ‘Tell us what our carbon emissions are right now. And if we’re above the limits for 2024, help us create a plan for how to close the gap,’” advises Russell boards to start asking questions. Are a smorgasbord of federal, state, and Unger, a sustainability consultant who the pipes insulated? Is the heat bal- city incentives, which evolve con- recently stepped down from the non- anced? Is weather stripping adequate? stantly. And Dan Wurtzel, president of profit Urban Green Council, which was Is there insulation behind radiators? FirstService Residential, advises co-op instrumental in shaping the Climate The fix could be as simple as switching boards to look at when their underly- Mobilization Act. “A lot of property fuels, since No. 2 oil produces 40 per- ing mortgage is going to expire, and managers have some capability to do cent more carbon emissions than natu- how much money will be needed for this, but some boards will want to bring ral gas. Whether the necessary fixes energy upgrades in the next 10 years in an energy consultant. If I was on a are minor tweaks or major overhauls, and beyond. Co-ops have the opportu- board, I would want to know right now boards need to come up with long- nity to either refinance their underly- how we’re doing. Can we breathe easy range plans now, then begin figuring ing mortgage, tap into a line of credit, – or do we need to do a lot of work?” out how they’re going to pay for them. obtain secondary financing, or estab- The amount of work boards need Paul Reale of CUNY’s Building lish a long-term assessment. Condos, to do will vary from building to Performance Lab recently told a however, are limited to assessments building, of course, and it could forum that the reluctance of co-op and financing on specific projects. In range from something as simple as and condo boards to spend money on either case, the most viable option may installing LED lights to something as retrofits has been a “huge obstacle” to be a combination of financing vehicles.

44 HABITAT | December 2019 WWW.HABITATMAG.COM ask the experts PROPERTY MANAGEMENT LEGAL

Thomas Thibodeaux, Robert Braverman NEW BEDFORD MANAGEMENT & Scott Greenspun BRAVERMAN GREENSPUN

FINANCE LAUNDRY

Pat Niland Stan Marx FIRST FUNDING OF NEW YORK ACES LAUNDRY

What’s Your Question? Get the answers to your most important co-op and condo board questions when you check out Habitat’s online Ask the Experts video series. Learn all the basics of NYC co-op and condo problem-solving, with straight talk and expertise from heavy hitters of leading companies. Find your answers today at: www.habitatmag.com

WANT TO JOIN OUR PANEL OF EXPERTS? PLEASE CALL: Associate Publisher Bill Fink at 212-505-2030 ext. 3003 or e-mail [email protected] city’s co-ops and condos. One lawyer described co-ops and condos as the “unintentional roadkill” of a law that was designed to protect renters but has serious, and confusing, implica- tions for co-op boards, co-op share- holders, and condo unit-owners. Those concerns are being addressed in a two-pronged pushback from co-op and condo advocates. On Green Roofs growing medium, the more absorbent – October 19, State Senator John Liu, (Local Laws 92 and 94) and therefore greener – the roof. Plants a Democrat who represents northeast These two measures, which are also can cover the entire roof or a portion of Queens, introduced a bill that would part of the Climate Mobilization Act, it. While green roofs are more expen- address the “unintended effects” of went into effect November 15 and sive to install than just conventional the Tenant Protection Act by carving will have a smaller but still signifi- roofs, they can pay for themselves in a co-ops out of this law. The bill would cant impact. The laws require that relatively short time – and they can be exempt co-ops from the law’s limits a green roof, solar panels, or some a major tool for complying with Local on deposits, application fees, late and combination of the two be installed Law 97. The benefits include extend- administrative fees, and a co-op’s on all newly constructed buildings ing the life of roof structures, reducing ability to recoup attorneys’ fees in and on buildings undergoing major cooling costs, and keeping rainwater summary proceedings against share- roof replacements. Boards replacing runoff from overtaxing city sewers holders. The bill has been referred to their roof membrane or patching their while providing a pleasant amenity for the Committee on Rules and will be roofs will be exempt. The Department building residents. taken up when the Legislature recon- of Buildings has announced numer- “And efficient buildings run venes in January. A companion bill ous other exceptions, including roofs cheaper,” says Alan Burchell, principal has been introduced in the Assembly that are too steeply pitched to accom- at Urbanstrong, a green building con- by another northeast Queens modate a green roof or solar panels. sultancy. “Why not use PACE financ- Democrat, Edward Braunstein. A green roof is not a conventional ing to do this work now so you’ll enjoy “The executive committee of the roof with some potted plants on it. the savings immediately – and comply Presidents’ Council of Co-ops and A green (or living) roof is made of with the law and avoid future fines?” Condos approached Senator Liu last several layers, including a waterproof summer,” says Geoffrey Mazel, a membrane, a root barrier, a drainage The Housing Stability and member of the law firm Hankin & layer, a lightweight engineered grow- Tenant Protection Act Mazel. “We explained the negative ing medium – potting soil is too heavy This sweeping law pushed by ten- impact the statute has on co-op share- – and plants. The larger and deeper the ant advocates sent jitters through the holders. He understood our concerns

46 HABITAT | December 2019 WWW.HABITATMAG.COM and took the lead on drafting this leg- islation. Shareholders are very excited about this because co-ops need protec- tion from the Tenant Protection Act.” The other prong of the pushback Over 60 years of providing excellence is a grassroots campaign to get co-op in Building Management and Brokerage Service shareholders and condo unit-owners Specializing in Manhattan Cooperatives & Condominiums to write to their state legislators. Stuart Saft, an attorney who is chairman of YOU CAN DEPEND ON US the Council of New York Cooperatives One Union Square West, New York, NY 10003 & Condominiums, is spearheading www.buchbinderwarren.com 212 243-6722 the letter-writing campaign which, he says, has this simple goal: “To amend the law to specifically state that it is not applicable to co-ops and condominiums. I wanted something very simple and very straightforward because we don’t know how the courts are going to interpret this [Section M]. I didn’t want to get bogged down in 20 pages of revisions.” Employee Rights A less flashy but still important flurry of new laws in 2019 focused on how FREE ONLINE COURSES FOR CO-OP/CONDO BOARD DIRECTORS employers, including co-op and condo boards, must treat their employees. These laws touched on sexual harass- BROUGHT TO YOU BY ment in the workplace, retaliation against employees, ethnic hairstyles, religious garb and facial hair, and mandatory time off for voting, repro- ductive treatments, even lactation. AVAILABLE COURSES “There has been a fundamen- tal shift in the environment,” says u Master Class Series: • Governing Andrew I. Bart, an attorney at Borah, Legal Topics for• BricksExperienced & Mortar Boards Goldstein, Altschuler, Nahins & Board Makeup • Avoiding Discrimination Condo Money Matters • Right to Inspect Goidel who specializes in employ- Shareholder Meetings ment law and real-estate litigation. “We’re now in an environment that’s u Pets in a No-Pets Building Sponsored by FirstService Residential very tilted toward protecting employ- ees. Given the MeToo movement, u Budgeting Basics for Co-ops and Condos New York State and New York City Navigating the Admissions Process have shifted the burden onto employ- u ers, and as a result, co-op and condo u Sublets, Roommates and Apartment Sharing boards need to be up to date on new u Financial Statement Basics for Co-ops and Condos regulations and required training.” Sponsored by Rudd Realty Failure to adapt to this new envi- u How to Safeguard Your Board Decisions ronment is not an option. “Boards Sponsored by Borah, Goldstein, Altschuler, Nahins & Goidel need to be aware that it’s easier for employees to claim that they’ve COMING SOON: been sexually harassed or that the u Tackling Energy Retrofits employer has retaliated or discrimi- Sponsored by Matthew Adam Properties nated against them,” Bart says. “The days of co-op and condo boards not www.habitatu.com thinking of themselves as employers – those days are long gone.” n

WWW.HABITATMAG.COM December 2019 | HABITAT 47 2020 NYC APARTMENT MANAGEMENT CHECKLIST Compliance in Plain English

overning your co-op or condo building has to comply with. Each the City of New York, the Multiple is more than smart decision- chapter is broken down into several Dwelling Law, and many other city, G making; it’s making sure your easy-to-follow sections: state, and federal laws. Every section building complies with myriad New also includes the official text of the York City laws and regulations. Even • Who is affected by the law law or regulation explained in that though your board probably isn’t the • What the law requires you to do chapter, plus copies of the various entity that oversees the compliance, • How to comply with the law forms needed to comply (which can it helps to have an understanding of • Deadlines you have to meet also be downloaded online). what your building staff and manage- • Penalties for violating the law In 2020, the AMC book will be ment company need to be doing. • Forms you need; and available in print and digital down- The New York City Apartment • Who to contact for more loads of each chapter. Management Checklist (AMC) offers information. this. Published annually for the past Updates in the 2020 Edition quarter century, it’s a compendium The information in AMC is In 2019 alone, there were 17 new written in plain English that cov- pulled from the New York City laws passed that affect your build- ers all the laws and regulations your Administrative Code, the Rules of ing’s operations. In the 2020 edition of AMC, the text of laws and forms ABOUT THE REVISION EDITOR: relating to each chapter have been updated, and any changes or addenda made since the beginning of 2019 are Eileen O’Toole included. Highlights include:

Eileen O’Toole is the principal of the Law • The new NYC anti-lead laws Office of Eileen O’Toole, concentrating • The updated DEP Asbestos Control her practice in landlord-tenant and rent- Program Regulations regulation matters. A frequent writer and • The latest Climate Resiliency lecturer on rent stabilization and other real Design Guidelines issued by the estate topics, she is the contributing editor of New York Landlord NYC Office of Recovery and v. Tenant, the Habitat Group’s monthly legal decision service. Resiliency O’Toole is also the author of the New York Rent Regulation • The latest amendment of rules Checklist, also published by the Habitat Group. relating to carbon monoxide detec- O’Toole graduated from Boston University School of Law and tors, as adopted by DOB • The most recent HPD-published served as Deputy Counsel to the Rent Stabilization Association of indoor allergen lease rider NYC before entering private practice. She has served as a mem- • Amended Fire Department Rules. ber of the NYC Civil Court’s Housing Court Advisory Council, and as a lecturer at NYU’s Real Estate Institute.

48 HABITAT | December 2019 WWW.HABITATMAG.COM PEEK INSIDE: CHAPTER 18 Climate Mobilization Below is an edited version of what you’ll find in the upcoming chapter.

Who Is Affected on many types of buildings, with the goal of a 40 percent (...) Owners of either large existing buildings exceeding overall reduction in greenhouse gas emissions by 2030, 50,000 gross square feet, combined buildings on the same and an 80 percent reduction by 2050. Although the Climate tax lot that together exceed 100,000 gross square feet, two Mobilization Act exempts many types of buildings from or more buildings owned as condominiums by the same the caps, including apartment buildings with rent-regulated board of managers that together exceed 100,000 gross units and other types of affordable housing, those buildings square feet, or new buildings must comply with energy- are required to carry out several energy-saving measures, audit measures, which provide surveys and analyses of such as insulating pipes. The Climate Mobilization Act also energy use, as well as retro-commissioning, which is the added provisions concerning green roofs, wind turbines, process of ensuring correct equipment installation and per- and Property-Assessed Clean Energy (PACE) financing formance, in order to complete required Energy Efficiency to fund upgrades to building energy and water efficiency. Reports (EERs). Covered sections include: Energy performance standards; Owners of all buildings larger than 25,000 square feet Construction compliance; Building retrofits; Energy are required to meet ambitious carbon reduction targets set Efficiency Reports, Benchmarking, Grading; Green roofs; by the city’s Climate Mobilization Act of 2019. Wind turbines, PACE Financing. What the Law Requires How To Comply During the past decade, energy conservation measures have Building/alteration applications. All new building and been pursued aggressively through legislation enacted by alteration applications filed on or after Dec. 28, 2010, must both the state and the city. Following enactment of state and comply with the applicable edition of the New York City city energy conservation codes, additional city laws focused Energy Conservation Code (NYCECC). The version and initially on information in the form of audits, benchmark- edition of the NYCECC that was in effect at the time of ing, and grading. However, the Climate Mobilization Act filing applies throughout the project, as long as the applica- of 2019 now mandates energy performance and, in some tion and permit remain active. Editions of the NYCECC cases, significant retrofits. The 2019 laws set emission caps were issued in 2011, 2014, and 2016.

WWW.HABITATMAG.COM December 2019 | HABITAT 49 Energy audits. An owner, using an approved energy audi- as the last digit of the building’s tax block number. The tor, must ensure that an energy audit is performed on the building’s energy audit and retro-commissioning report base building systems of a covered building before fil- must be completed prior to filing the EER. An EER must ing an Energy Efficiency Report. An energy audit is not include the energy audit report and retro-commissioning required for the first EER of a simple building where six report, or documentation that an exception applies to these out of seven of the following have been certified by a reg- requirements. istered design professional: individual heating controls, common area and exterior lighting, low-flow faucets and Benchmarking. After submitting data, a building is given an shower heads, pipe insulation, domestic hot water, washing ENERGY STAR score based on its energy efficiency. This machines, and cool roof. Owners must maintain copies of score is a screening tool that helps building owners assess energy audit reports and retro-commissioning reports for how buildings are performing and assists them in identifying 11 years from the required submission date and make these whether a building needs improvement. The median score is reports available to DOB upon request. 50, 75 is very good, and 100 is the top score. Beginning in reporting year 2019, DOB will require use The 2018 deadline for mid-size buildings (those exceed- of the U.S. Department of Energy’s Asset Score Audit ing 24,000 gsf but less than or equal to 50,000 gsf in area) Template as the energy audit data collection tool to be used to submit benchmarking data was extended to May 1, under Local Law 87 of 2009, and will no longer accept a 2019. The benchmarking deadline for buildings covered previously used Excel-based tool. under Local Law 84 (over 50,000 gsf) was extended from May 1, 2018, to Dec. 31, 2018, due to technical problems Retro-commissioning report. An owner, using an approved with Energy Star Portfolio Manager. retro-commissioning agent, must ensure that retro-commis- sioning is performed on the base building systems of a cov- Deadlines ered building before filing an EER. Retro-commissioning is Alteration applications filed on or after Oct. 3, 2016, are a systematic process for optimizing the energy efficiency of subject to the 2016 NYCECC. Complete applications that existing building systems through identification and correc- include a complete energy analysis, filed on or before Oct. tion of deficiencies, including repairs, cleaning, adjustments 2, 2016, are subject to the 2014 NYCECC. Incomplete of valves, sensors, controls or programmed settings, and/or applications filed on or before Oct. 2, 2016, may be subject changes in operational practices. The retro-commissioning to the 2016 NYCECC. agent must prepare and certify a report that includes infor- The years that a building’s first EER is due correlate to mation on the types of base building systems, testing pro- the last digit of tax block numbers and are, for respective tocol, master list of findings, and deficiencies corrected. years: 2013 (3), 2014 (4), 2015 (5), 2016 (6), 2017 (7), Retro-commissioning must be completed no earlier than 2018 (8), 2019 (9), 2020 (0), 2021 (1), and 2022 (2). An four years before the date on which a building’s EER is EER could be submitted between Jan. 1, 2006, and Dec. filed with DOB. Owners must maintain copies of retro- 31, 2013, in order to achieve early compliance. The next commissioning reports for 11 years from the required sub- required EER for a building is then due in the 10th cal- mission date and make these reports available to DOB upon endar year after the first assigned due date for the report. request. An owner may combine energy audit and retro- For example, if the due date for the EER was 2015 and commissioning reports. As of 2018, DOB continued to use the owner filed the EER early in 2013, the next report an Excel-based Retrocommissioning Data Collection Tool. will be due in 2025.

Energy Efficiency Reports. An owner must complete Additional Sections an EER electronically and submit the EER once every Additional sections explain fees, penalties for failure to 10 years by Dec. 31. Beginning Jan. 1, 2013, EERs are comply, which forms are required, and where to go for fur- due in the calendar year with a final digit that is the same ther information. n Reserve Your Copy Now! Reserve your copy of the 2020 NYC Apartment Management Checklist now, and we’ll send you an online coupon for a discount of 20% (via email) as soon as the book is published in January 2020. NEW FEATURE! For the first time, this updated edition will come with access to online downloadable chapters – enabling you to grab any topic, at any time, and print it out or email it to a colleague. http://bit.ly/ReserveAMC2020

50 HABITAT | December 2019 WWW.HABITATMAG.COM digital edition

Link your print edition to the digital version! Read each monthly edition of Habitat on your desktop, tablet or phone. View the entire print magazine and easily read stories on your mobile devices with “text view.”

To read this issue, or a back issue you may have missed, go to http://bit.ly/HabitatDigitalEditions AD INDEX MANAGEMENT TRANSITIONS Manhattan: Upper West Side Academy Mail Box...... 9 Habitat Video Series: Brickhouse Owners Corp./136 West 75th St. Aces Laundry...... Insert Seeking Counsel...... 17 36-unit co-op. Transition to Veritas Property Management (11/1/19) AKAM Associates...... 3 Habitat Week by Week, Sponsored by Rudd Realty Management Corp...... 41 Queens: Jackson Heights Automatic Industries...... 10 35-45 81st St. Owners Corp. Halstead Management Co...... 7 60-unit co-op. Transition to All Area Realty Bargold Storage Systems...... 25 Services (9/1/19) Hankin & Mazel...... 19 Big Apple Compactor...... 12 Hercules Corporation...... 5 Manhattan: Financial District Big Apple Fire Sprinkler...... 20 101 Wall Condominium/101 Wall St. Impact Real Estate Management...... 23 53-unit condo. Transition to Midoro Braverman Greenspun..... Inside Back Cover Management (10/1/19) Indus Architect...... 28 Brown Harris Stevens...... 13 CORRECTION Marathon Energy...... 19 Buchbinder & Warren...... 47 Manhattan: Greenwich Village Matthew Adam Properties...... 9 Georgetown Plaza/60 East 8th St. Cesarano & Khan, CPAs...... 31 387-unit condop. Transition to Midboro Midboro Management...... 24 Management (8/1/19) Chutemaster...... 28 (in Habitat’s October 2019 issue, noted as 56 National Grid...... 15 units) Douglas Elliman Property Management.....31 NCB...... Inside Front Cover FirstService Residential...... 21 BUILDING LOANS Norris McLaughlin...... 23 Manhattan: Upper West Side Habitat Ask the Experts...... 45 The Ansonia Condominium Rudd Realty...... 3 2109 Broadway Habitat Digital Edition...... 51 365-unit condo, 16.4% unsold shares Sacks Real Estate Management...... Insert Habitat E-Newsletters...... 52 loan: $12.3 mil term: 15 years Sprague Operating Resources....Back Cover rate: 5.25% closing: 10/18/19 Habitat U...... 47 bank: NCB Tudor Realty Services...... 11 loan officer: H. Seligman Habitat Video Series: building rep: Sirius Beyond the Bricks...... 53 Wirecrafters...... 29 Queens: Forrest Hills Gerard Owners Corp. 70-25 Yellowstone Blvd. 561-unit co-op, 6.8% unsold shares loan: $12 mil term: 10 years SUBSCRIBE TO HABITAT’S FREE NEWSLETTERS! rate: 3.24% closing: 10/22/19 bank: NCB loan officer: E. Howe building rep: Halstead Management Company

Bronx: Morris Park 2156 Cruger Ave. Apartment Corp. 72-unit co-op, 36.1% unsold shares loan: $3.5 mil term: 10 years BRICKS & BUCKS HABITAT WEEKLY rate: 3.42% closing: 10/31/19 bank: NCB Every week, an in-depth look at a recent Offering practical advice and insight for loan officer: E. Howe building project carried out at a New York boards and property managers on issues building rep: Jonasvar metro-area co-op or condo. that face co-ops and condos. Subjects covered include technology, governance, Westchester: Yonkers 1080 Warburton Corp. building operations, and legal issues. 1080 Warburton Ave. 42-unit co-op, 0.0% unsold shares loan: $3.15 mil term: 10 years rate: 3.33% closing: 10/30/19 line of credit: $200K bank: NCB ENERGY RETROFIT loan officer: H. Seligman Offering practical advice and real-world GOVERNANCE building rep: H.S.C. Management examples of how to reduce your energy One big idea is explored in each newsletter and water costs. With an eye to a building’s on how co-op and condo boards can budget, a variety of retrofit opportunities govern more effectively. are explored.

BROUGHT TO YOU BY All data, covering the past three months, has been voluntarily submitted, and the omission of any professional from this section is no reflection on his or her business. To have your item published in an upcoming issue, call (212) 505-2030 ext. 3006, fax (212) 254-6795, Register your e-mail address online at: http://bit.ly/HabSignUp or e-mail: [email protected].

52 HABITAT | December 2019 WWW.HABITATMAG.COM VIDEO SERIES 19 Property Management Executives Tell You What’s Really Going On in New York’s Co-ops and Condos

WATCH NOW http://bit.ly/Beyond-Bricks The premier directory of suppliers and professional services to New York’s co-op/condo board directors and building managers.

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McLaughlin: 212-415-7406 or WilkinGuttenplan ��������������������������������212-247-9000 [email protected] Specializing in Co-ops and Condominiums Speakeasy Intercom & Electric Service ����718-225-6900 www.fa.ml.com/themclaughlingroup www.wgcpas.com CLOTHES DRYER/VENT CLEANING FIRE SPRINKLER AIR DUCT & CHUTE CLEANING Chutemaster Indoor Environmental ��800-234-4656 Big Apple Fire Sprinkler Chutemaster Indoor Environmental ����� 800-234-4656 Company Inc ��������������������������������������� 718-205-8580 Vent-Away...... 516-281-8760 Installation, Maintenance & Repair ARCHITECTS/EXTERIOR/LOBBY DESIGN [email protected] COMPACTOR SALES & REPAIRS Art & Interiors ������������������������������������� 516-626-6555 GYM EQUIPMENT Specializing in Full Scope Lobby and Hallway Design Big Apple Compactor Company Inc. �����718-205-8580 Installation, Maintenance & Repair Gym Tech ��������������������������� Toll Free 866-GYM-TECH Bertolini Architectural Works, D.P.C..... 212-244-1232 [email protected] Fitness Equipment Repair & Maintenance Services— www.BAWorks.net bigapplecompactor.com FREE ASSESSMENT—Equipment Sales, Delivery & Installations, Gym Flooring Sales & Installations FREE CTA Architects P.C...... 212-243-7404 Chutemaster Indoor Environmental ����� 800-234-4656 Professional Consulting for Gym Layout & Design www.ctaarchitects.com www.gymtechservice.com - [email protected] CONSTRUCTION Cowley Engineering, P.C...... 203-658-8858 Allcon Contracting ����������������������������� 516-333-3339 www.cowleyengineering.com Commercial and Residential Construction FINANCE Renovation and Design Services Serving all of LOBBY & HALLWAY DESIGNER * FREE CONSULTATION Manhattan and the tri-state area for over 25 years www.jonathanbaron.com 212-242-6567 NYS Lic#0035 Cowley Engineering, P.C...... 203-658-8858 Ivan Brice Architecture/Engineering ������212-274-0056 www.cowleyengineering.com LL 11-98 & Landmarks Filings, Condition Reports, Budgeting, Plans, Specs, Construction Administration, CONSULTING ENGINEERS Interior Renovation, Exterior Restoration Falcon Engineering, Architecture & Energy Consultants ������������������������� 646-292-3515 Kamen Tall Architects specializing in exteriors Building Envelope Consulting/Inspections/Specs, for existing structures for Building Management Parking Garage Investigation/Design, Capital Reserve Companies and Property Owners. Visit us at Analysis, LL 11/98 Inspections/Reports, LL 84 & 87 www.Kamentallarchitects.com Benchmarking and MEP Design/Evaluation [email protected] Robert Cane Architect, PLLC �������������� 212-769-9605 Designers of Distinctive New York Lobbies. Ivan Brice Architecture/Engineering...... 212-274-0056 Visit our website at: www.cane-architects.com LL 11-98 & Landmarks Filings, Condition Reports, Budgeting, Plans, Specs, Construction Administration, Sullivan Engineering, LLC...... 973-552-2151 Interior Renovation, Exterior Restoration Exterior Resoration services www.sullivanengineeringllc.com RAND Engineering & Architecture ����� 212-675-8844 ATTORNEYS EXT. RESTORATION * LL 11/98 INSPECTIONS/REPAIRS Bldg. Surveys, Design & Specs, Construct. Admin., Abrams Garfinkel Margolis Bergson, LLP ���212-201-1170 Structural, Roof Replacement, Windows & Doors, Contact: Neil B. Garfinkel or Barry G. 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MAILBOXES INTERCOMS PROPERTY MANAGEMENT

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WWW.HABITATMAG.COM December 2019 | HABITAT 55 Sponsored by

BY MYLES MELLOR

ACROSS 1 Inoffensive lobby decor, 2 words 5 Rubin Museum of Art nabe 9 Money in the bank 11 Park or Pennsylvania 12 Nada 14 Tarzan creator’s monogram 15 Line on an envelope 16 Start 17 Bruin legend Bobby 19 Mellow jazz instrument 20 Agree 22 Treed botanical garden 27 Utah’s ___ Canyon 29 Old-timer 30 Where da Vinci Airport is 31 Napoleon’s downfall 33 Charitable concert word 34 Ray Charles’ state of origin 35 AC mechanical systems that should be under a third-party maintenance contract, 2 words 38 Take the gold 39 Kitschy 40 Bay transport

DOWN 1 Useful tools to get resident opinions 22 Fuzzy fruit 2 Electrical hub, 2 words 23 Luxury car symbol 3 Behind in payments 24 Gets a loan 4 Most fashionable 25 Caesar salad ingredient 5 Copper symbol 26 Flushing _____ 6 Extensions of the roof 28 Study of the relationship between living things and their environment 7 Hazard at Bethpage Humor 8 It has cup-shaped flowers 31 “Lord ___ the Rings” 10 Mick Jagger or Paul McCartney 32 Pulitzer writer James 13 Impose, as a tax 33 Started a fire 18 Island where the Federal Reserve 36 was invented 37 Bering, for one, abbr. 21 It’s added to seat more diners, 2 words

For solution to puzzle: http://bit.ly/Dec2019Answers

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