Page 6 - New England Condominium July 2019
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6 NEW ENGLAND CONDOMINIUM   -JULY 2019   NEWENGLANDCONDO.COM  M  any co-op shareholders and con-  do unit owners arrive in their   respective communities after a   history of living as renters. Often they carry   with them certain ingrained assumptions   and expectations from having lived under a   landlord. These assumptions can cause fric-  tion – because while the board of a co-op as-  sociation and/or its management company   may take on some responsibilities similar to   those of a landlord, these are very different   entities operating under distinct mandates.  “Some people definitely don’t understand   the boundaries between what they’re respon-  sible for and what the association should   handle,” says Bob Keegan, President with   Dirigo Management Company in Portland,   Maine. “They think they buy a unit, pay a   monthly fee, and everything is taken care of.   They’ll call us with an issue that doesn’t fall   under management purview, and we’ll offer   to send somebody over, but let them know   that it will be at their expense. And they’re   mystified because they pay that fee. So we’ll   have to explain \[that\] when they bought   their unit, they signed off on a whole bunch   of documents explaining the delineation of   responsibilities between individuals and the   association. Of course, when you’re closing   on a home, you don’t necessarily read all of   those docs with the keenest eye, but you have   to learn eventually.”  As far as recurring complaints that actu-  ally fall to the owners, Keegan cites things im-  mediately outside of a townhome unit, like a   light or doorbell. “Those items are powered   via the owner’s meter box,” he says. “It may   exist outside of a unit, but these are not com-  mon elements.”  Compared to the multifamily markets in   places like New York and New Jersey, condos   and HOAs in New England reign supreme   while co-ops are more rare. But this doesn’t   stop owners there from having unreasonable   expectations  for  their  board  or  managing   agent as well.   In New York, some of the distinctions be-  tween co-op boards and rental landlords are   laid out via the “warranty of habitability,” or   New York Real Property Law Section 235-b.   In short, because co-op shareholders occupy   their units under a proprietary lease, they fall   under the protection provided by the war-  ranty of habitability that requires that the   property be maintained in good repair. This   means that the board may, for example, be   required to repair interior walls and ceilings   within shareholder apartments.   On the other hand, courts have ruled   that co-op boards are not responsible for ev-  ery amenity that would be covered under a   typical landlord/tenant relationship. Much   of this is subjective and is decided by the   courts based on how a co-op board’s failure   to maintain, repair or service a building ele-  ment adversely affects the health and safety   of residents.  Also, the warranty of habitability only ex-  tends to shareholders who reside within their   apartments. Thus, a sublessee cannot claim   damages against a co-op board for failure to   maintain a standard of living, but he or she   can claim damages against the shareholder   renting out the apartment. That shareholder   (who is legally the sublessee’s landlord) would   then have to file a cross-claim against the   board if the shareholder feels that the board   has in some way abdicated its duty to uphold   the maintenance and repair of some element.   Kevin R. McConnell, a partner at the law   firm of Himmelstein, McConnell, Gribben,   Donoghue & Joseph LLP in New York City,   weighs in further on these distinctions. “Ap-  proximately four decades ago, an appellate   court affirmed the applicability of the war-  ranty of habitability to co-op apartments and   proprietary leases,” he says. “The typical rem-  edy for a breach of the warranty is for a ten-  ant to be provided a rent abatement, which   affects the landlord’s pocketbook in a typi-  cal rental situation; in a co-op situation, the   pocketbook of the apartment corporation is   being hurt. The difference there is that if the   apartment corporation is acting as it should   be in that maintenance is used to pay oper-  ating expenses, then the loss of any mainte-  nance payments through an abatement af-  fects the other tenant shareholders. But an   abatement of rent is often the most effective   means of getting the apartment corporation   to address a repair that has caused a breach   of warranty.  “Yet another method for getting repairs   done is for a tenant-shareholder to com-  mence an HP action,” McConnell continues.   “The HP action is a tenant-initiated lawsuit in   which the tenant-shareholder sues the apart-  ment corporation in housing court, seeking a   court order to do the necessary repairs. The   tenant-shareholder can still pay maintenance   such that the cash flow to the corporation is   not interrupted.”  Outside of the legal jargon, there are other   scenarios wherein co-op residents expect   boards or managers to be their super, care-  taker, boiler technician, etc. Understand-  ing the boundaries between where a co-op   resident’s responsibilities lie and where the   board’s or manager’s begin is essential to suc-  cessful cooperative living.  Read the Fine Print  Occasionally, a misunderstanding be-  tween resident and board/management will   occur due to the former’s failure to fully un-  derstand the bylaws of the association. This   can be avoided by – you guessed it – actually   reading one’s bylaws.   “Sometimes in our business, repetition is   key,” says Susan Fitzpatrick, Director of The   Residences at The Ritz-Carlton, Westchester   in White Plains, New York. “So we promote   the bylaws of our association repeatedly.   Manager, or Landlord?   Understanding the Scope of Management Responsibilities  BY MIKE ODENTHAL  ISTOCKPHOTO.COM  BUDGET & FINANCE  continued on page 18

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