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Mann Report Management - April 2018
By: Carol Sigmond
Whether implicit or explicit, every cooperative and condominium board has certain maintenance policies. Some, such as the policy that tenants or unit owners are responsible for their own decorating and upgrades, are similar from building to building. But there are other issues, such as common defects in a building located in units that are often handled on an ad hoc basis only in the short term, with no real consideration of the long-term implications of certain decisions.
Consider hypothetically a building that is 10 years old and unit owners/tenants are beginning to make kitchen and bathroom renovations. The superintendent reports to the board that he is finding evidence that spray-on fireproofing, installed when the building was constructed, is eroding copper piping in bathrooms and kitchens. Your superintendent comes to you to report the issue.
Do you, as a board, take any action? If so, what action do you take, and with what consequences? You could notify all the unit owners of the condition and leave the issue to them to address. The consequence is that from time to time, there will be ruptured pipes and damage to apartments and possibly common areas. At some point, the issue could impact the insurance rating on the building and the persistent leaks/floods will impact water and sewer costs and appear in the minutes, which impact the value of the unit owner/ tenant investments.
You might choose to adopt a policy that all branch piping will be replaced during upgrades, as designated by the superintendent. You will have the same issues as above, although some units might be repaired by the unit owners.
You could decide to make bulk repairs, with the caveat that the unit owners with upgrades are responsible for the repairs to the upgrades unless they replaced the branch piping in their upgrade. This would have a maintenance cost, but no insurance or valuation impacts. Likely the maintenance cost 411 be less per unit if the building negotiates the plumbing contract than it would have been if the unit owners did the repairs themselves.
Consider a second hypothetical. the building in question has setback terraces. A setback terrace is a terrace for the upper floor apartment and a roof on the apartments directly below. Setback terraces may be repaired from the street, which often requires a sidewalk shed, scaffolding, and a site safety officer or from within, which means going through the unit that accesses the terrace. For this hypothetical, assume that the bylaws and declaration or proprietary lease give the building the right to access the terrace from within the unit. Certainly, the directly affected unit owners do riot want a week of work passing through their units. However, the other unit owners, particularly those without high setback terraces, do not want to pay for site safety officers, scaffolding, and sidewalk bridges if that can be avoided.
Consider a third hypothetical: the building's water bills are increasing dramatically as the building ages. You have some options, such as increasing the building maintenance fees to cover the increasing costs. But your board could issue a notice to unit owners to have dripping faucets and running toilets repaired. Your board could have the building staff go from unit owner to unit owner asking if there are dripping faucets or running toilets and offering to make minor repairs for a small set fee per service plus the cost of parts. In reality, the last option is the only one that will produce real reductions in costs, which is preferable to maintenance increases. Likely the program will be self-funding, a dripping faucet or running toilet can cost thousands in water bills over time—imagine that times 20 or 30 toilets or faucets in a building.
These examples should allow you and your fellow board members, with the managing agent and the superintendent to adopt rational policies respecting common building issues, including exterior window replacements. You need to consider the long-term maintenance and operating costs and insurance costs against the short-term benefit of not dealing with common unit owner issues collectively. Buildings are often able to buy services and goods for less than unit owners, which will matter in items such as windows or replacement of failing branch piping. Buildings are often able to save more by doing the maintenance themselves as in dripping faucets than in leaving it to the unit owners. Whatever you decide, as a board, you should be considering these issues in terms of the best financial and maintenance interests of the building.
This column presents a general discussion. This column is not intended to provide legal advice. You should consult your attorney for specific legal advice.
This article was originally published by Mann Report: Management. You can access the article on their website.