Month: September 2014

Who’s Responsible for Repairs? Board and Owners Maintenance Responsibilities!

Who’s Responsible for Repairs?

Board and Owner Maintenance Responsibilities

By Raanan Geberer

Say you’re in bed and you hear what sounds like the shower going, but it’s late, and you’re tired, so you pay it no mind. You wake up at 4 a.m. to get a glass of water, and find half the rooms in your apartment flooded— you forgot to turn the shower off! You throw blankets and towels on the floor to soak up the water, then you call your building’s maintenance staff.

With the aid of a dehumidifying machine, they’re able to get most of the moisture out of the flooded areas. But the wooden floor tiles themselves are heavily damaged—and a fair amount of water seeped into your downstairs neighbor’s unit, damaging the ceilings, walls, and some artwork. Who’s responsible for restoring the flooring? And what about the water that poured into the apartment below?

The Basics

Finding out what systems and features in a shareholder’s co-op or condo unit are the owner’s responsibility and which are the building’s or association’s responsibility can be a very complicated subject. Many principles are universal but other details can vary from building to building, depending on the rules of that particular community.

According to the experts, within the individual unit, shareholders and unit owners are basically responsible for whatever’s within the four walls, and from floor to ceiling. Or, in another way of putting it, they’re responsible for whatever they can see. Unfortunately, this would likely include those wooden floor tiles, unless your building administration decides to be generous.

One exception, however, is the electrical wiring inside the walls, says Carl Borenstein, president of Veritas Property Management in Manhattan, which manages about 80 buildings. “The building is only responsible for the electrical wiring up to the circuit breaker box,” he says. “Even though you don’t see the wiring after that point, it’s the responsibility of the shareholder” or the unit owner.

Then, what is the building or development responsible for? “While every building is different,” says attorney Leonard Ritz, of counsel, at the law offices of Adam Leitman Bailey, P.C. in Manhattan, “the general rule of thumb is that the building is responsible for everything in a common area of the property, and any building system—or portion of the system—that serves more than one apartment.”

This would include the hallways, lobby, elevators, basement, boilers or rooftop A/C, plus the electrical wiring from the point it enters the building from the street to the point it enters the circuit breaker or junction box.

Attorney Ronald A. Sher, founding partner of the law firm of Himmelfarb & Sher in White Plains, mentions a difference between condos and co-ops as far as responsibilities for repairs is concerned. In co-ops, he says, windows are the responsibility of the co-op; in condos, of the unit owner. HVAC units are the responsibility of the building in a co-op, but the responsibility of the unit owner in condos (the owners are responsible from the horizontal connections into the unit and the heating and cooling equipment).

Gray Areas

As in everything, there are some gray areas when it comes to who’s obligated to fix what in a multifamily building. Places at the intersection of the wall and a piece of equipment are a frequent source of conflict, such as window replacement and repair, plumbing risers and valves (such as the valve under the sink that turns the water off), air conditioning equipment, and air conditioning sleeves within the walls.

Borenstein mentions the toilet as an example of how complex the situation is. “The tank, seat and flushometer belong to the owner, but the lead bend [the large, bending pipe under the toilet] belongs to the co-op. The toilet sits on a wax ring on the floor, which creates a seal. Sometimes the seal is compromised, the water begins to leak and causes damage.” This is another area of conflict, depending…

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Identifying Insurance Options. One Size Does Not Fit All!

Identifying Insurance Options

One Size Does Not Fit All!

By Anne Childers

You can’t underestimate the value of insurance. In a simple analogy, operating a business—or the day-to-day business of a co-op or condo—without adequate insurance coverage is a lot like skydiving without a parachute. Needless to say, it’s a risky proposition.

The insurance industry spreads risks from the individual to the larger community, and provides an important source of long-term finance for both public and private sectors. The industry may also help eliminate risks, for example, as when fire insurance underwriters demand implementation of safe practices and/or the installation of hydrants and extinguishers in high risk areas.

As society has changed, the insurance market has adapted products and services to meet changing needs and to minimize the risk of doing business in today’s marketplace. The Internet makes shopping and comparing insurance options easier than ever before, but when a condominium board or homeowners association goes shopping for insurance they may well want—and need—to start the protection at the board level.

Getting Covered

In September 2012, new Federal Housing Administration (FHA) regulations were introduced that pertained to all new and established condominium projects with 20 or more units. Those properties are now required to carry fidelity bond insurance to protect their board and other building administrators; a policy may be expanded to cover the property management firm as well.

Ed Mackoul, CIC, is president of Mackoul & Associates, Inc., which has offices in Island Park, and Old Bridge, New Jersey. He explains the new FHA regulations in simple terms. “Fidelity bond provides coverage for theft by a board member or employee, of funds or business personal property. The policy can usually be endorsed to cover acts of the property management firm as well.”

The good news on fidelity bond insurance is twofold, the protection and the cost. Most policies average less than a $1,000 annually. Mackoul explains the cost is based on different factors, such as the limits of coverage, number of directors and officers, and proper controls the insured has in place. “While premiums may be as low as $200, a typical policy with a limit of $250,000 will be approximately $600-$800.” Mackoul points out the FHA requirement for minimum coverage is at least three months assessments plus reserve funds.

Kevin Davis, the president of nationwide insurer Kevin Davis Insurance Services, based in Los Angeles, emphasizes the need for fidelity or crime insurance. Board members are volunteers, he says, and they may not understand the legalities or nuances of handling millions of dollars in funds.

“Living in community associations, there is little oversight for people handling funds—even the reserve account funds, which should never happen,” he states. “It is important to have a comprehensive crime policy that provides the best protection for the community association and the property manager.”

Usually, most fidelity bond claims allege some type of economic loss. Some crimes happen in plain sight, and then in retrospect everyone feels a bit foolish for not noticing. Davis offers an amusing take of this type of criminal activity when he shares his “wheelbarrow story.” He tells the story of an employee who left the job site every day with a wheelbarrow full of sawdust. Certain he must be stealing something hidden under or related to the sawdust, those in charge searched the sawdust but never found anything. When the employee was safely retired, he admitted to stealing—not the sawdust, but the wheelbarrows!

Award-winning laundry room design and management company with over 20,000 washers and dryers in thousands of buildings throughout the New York metropolitan area. Family owned and operated since 1952.

Additional Coverage Requirements

While fidelity bond insurance goes a long way towards protecting a board and a…

Trion to turn around Bronx buildings!

Trion to turn around Bronx buildings!

Trion Real Estate Management, a property manager headquartered in Yonkers, has been named the new managing agent for two mixed-use buildings in the Bronx – 758 Kelly Street and 2833 Decatur Avenue.

Together, the properties include 77 apartment units and eight retail stores. Both properties currently need attention due to deferred maintenance and financial instability.
“Our management team looks forward to implementing our proven strategies and policies to help run these properties more efficiently,” said Carmelo Milio, CPM, president of Trion Real Estate Management.

758 Kelly Street, located in the historic district of Longwood in the Bronx, has many violations and deferred maintenance.

“In recent years we have been very successful in turning around properties similar to 758 Kelly Street and we once again look forward to the opportunity to improve the quality of life for the residents and increase the value of the property for the owner,” said Milio.

Immediate improvements include the reconstruction and painting of the lobby and hallways, as well as updating the entrance door and intercom system. Trion has also begun the process of a gas conversion. 2833 Decatur Avenue will benefit from a new laundry facility and security cameras.

http://ow.ly/ASpbd

Mann Report Features Trion Management!

MR Management — Mann Report Management August 2014

“Building” Client Relationships for 35 Years
Carmelo Milio, Trion Real Estate Management

Carmelo Milio, CPM is President and Director of property management for Trion Real Estate Management, a leader in property management and an advocate on behalf of landlords and boards throughout New York and Connecticut. Milio founded Milio Realty Corporation in 2002 (renamed Trion in a 2014 rebranding campaign), and spearheaded its growth into third party management and maintenance.

Trion Real Estate Management’s success was built on a “bricksand-mortar” philosophy started 35 years ago. Milio’s hands-on approach to working with each of his clients is deeply rooted in a foundation based on work ethics, hands-on management and a sense of pride in each and every property under management.

Under Milio’s leadership, the company has grown its management services to a portfolio of more than 1,500 units with $150 million in assets. Properties range from a 200-unit garden style condominium to a 12-unit mixed use walk-up on Manhattan’s Upper East Side. Milio counts Trion’s successful renovation of a $3.7 million fire gut renovation as one of his biggest construction management accomplishments.

The management company routinely finds ways to reduce operating expenses at its properties, while enhancing residents’ lifestyles. “For over 35 years, we’ve helped countless clients to save tens of thousands of dollars – from minor maintenance issues to major capital improvements – by streamlining operations and managing their properties more efficiently,” said Milio.

According to client M. Levey of GEM Holdings, “Trion’s improvements show in every corner of our building. Carmelo Milio, president, gave us a ‘guarantee’ that his company could save money for our 65 rent stabilized and 28 luxury, free-market apartments, and not only did his company accomplish this easily, they brought us more competent, flexible and efficient vendors and property manager!” Another client, a co-op board, hired Trion after it had been mismanaged by a large management company. “Most of us had no idea just how seriously we had run into trouble until Trion Management Corp. arrived and took charge of the building. Now we have a highly competent, responsive and efficient property manager in the building every week. Every aspect of our building’s management – and therefore its livability – has improved, and that is all due to Trion’s high standard of professionalism. They have saved us thousands of dollars on goods and services,” said Mark Feltskog, a co-op board member at an 84-unit co-op in the Bronx, NY.

Milio attributes Trion’s success to his team. “We owe this success to our people – a unified team sharing a commitment to go above and beyond, every day, for the buildings we serve,” said Milio. Milio reports that all of Trion’s managers – each of whom are required to personally visit properties at least twice per week – have been educated, both in the field and within Trion’s intensive on-site training program.

Giovanni Puerta, ARM, Senior Property Manager for Trion, said, “It is truly gratifying to be part of a company that has accomplished so much so quickly. It is empowering to be part of something with such a bright future!”

Milio is instrumental in driving efforts to improve industry standards, professionalism, technology and the variety of services offered to residential properties and homeowners. He speaks annually on behalf of landlords as the industry spokesperson to the Rent Guidelines Board for stabilized buildings.

“The Trion team acquired our expertise working with earlier generations of real estate professionals, and we are proud to describe our management style as ‘old school’ even as our business services remain cutting-edge,” said Milio.

http://ow.ly/ASjYU