Page 12 - New England Condominium October 2019

12 NEW ENGLAND CONDOMINIUM -OCTOBER 2019 NEWENGLANDCONDO.COM www.RiskStrategies.com Specializing in Insurance and Risk Management Services for: For more information Contact Thomas Shields | Producer E: TShields@risk-strategies.com P: 781-961-0314 A: 15 Pacella Park Drive, Suite 240, Randolph, MA 02368 Bernie Gitlin | Executive VP E: Bgitlin@risk-strategies.com P: 781-961-0330 C ondominiums C ommunity A ssoCiAtions HoA C ommunities C ooperAtives comes to individual building systems, “The best warranty for a roof is a 20-year NDL. The warranty may prorate dollar danz, “we installed a new chiller system limits, so it’s important to nail this condi- tion down when the specs for the job are 125-unit, 21-story Upper East Side co- written. “Boiler warranties,” she explains fur- ther, “may only cover certain parts. The pumps, and converted to gas. The com- term may be for only 10 years, but a boiler pressor went on the chiller. I contacted with proper maintenance can last much the manufacturer, as it was still under longer, perhaps 50 years. Elevators gener- ally carry good warranties, but they are fixed it. Without the warranty, it would usually with the installation company, not have cost thousands of dollars. In addi- the manufacturer. Often these warranties tion, had we not negotiated that warranty don’t include visits for tests required by well, this would not have been covered. New York City.” The charges for these The truth was, the installer didn’t think tests can be expensive. In the final analysis, while there is That warranty – and taking the proactive some uniformity to warranties as a whole, step of verifying it – saved serious money. in many cases terms will differ when it comes to what is being covered, and by Schickedanz managed a building that had whom. Perhaps the most important con- sideration, according to Schickedanz, is could seem to find the source. Schicke- who negotiates the terms. In most cases, danz suspected the roof to be the culprit, warranties are arranged and negotiated but when she checked her records, she by architects and engineers at the time found that the company that installed the when work is planned and contracted. roof was no longer in business. She did While these professionals are usually find the specs from the roof replacement conscientious and operate in the best in- terests of their clients, it’s still important cated that there was an existing warranty. for board members to pay particular at- tention to these terms as they are negoti- ated and agreed to – in other words, trust as to what to look for as the source of the but verify. Service Agreements A service agreement differs from a warranty in that an entity such as a co- op or condo might enter into an agree- ment for maintenance of a specific item like an elevator, but the agreement is not a result of the purchase of the equipment. It is an agreement between the two par- ties to complete a necessary level of main- tenance over a specified period of time. Many times, service agreements go hand in hand with warranties – but they’re not necessarily symbiotic. Reich explains that “some service agreements, like those for HVAC systems or elevators, are required by the issuer of a warranty. In essence, you must have checkups and maintenance to keep the warranty valid.” Schickedanz again stresses the extent and value of your service agreement de- pends on who is negotiating it. Service agreement terms aren’t written in stone, and boards need to pay close attention to the terms, conditions, and what is includ- ed in a proposed agreement. A very good example of this is that, as mentioned pre- viously, most elevator service contracts do not include the testing required by the City of New York for the installation of automatic door-lock mechanisms, which will be mandatory in virtually all build- ings by January 2020. Schickedanz herself has had to re-negotiate contracts to get this work done in many buildings, saving literally tens of thousands of dollars for individual buildings. Some Real-Life Examples “About two years ago,” says Schicke- into one of the buildings we manage: a op built in 1964. We were completing a project where we changed the boiler and warranty. They ordered the parts and it was covered, but we found that it was.” In another situation many years ago, a chronic leak problem for which nobody job, but nothing in those records indi- Schickedanz contacted the manufacturer for help, to see if they could offer any idea leak. They sent a representative and not only confirmed that it was indeed their roof, but then found the leak and repaired it at their expense. This work would have cost thousands of dollars had a new con- tractor been brought in – so it absolutely paid to investigate and reach out to the manufacturer, which stood by its product. Levy describes a situation where a property had an asphalt shingle roof that was defective. The developer of the prop- erty helped the board and management to negotiate an $18,000 refund from the manufacturer for the defective product – but the cost to replace was still over $500,000. If they had had a system war- ranty in place, the repair and replacement could have been done for far less. With buildings as in life, an ounce of prevention can be worth a pound of cure. When undertaking major projects, make sure to negotiate the best warranty avail- able; back it up when necessary with a re- liable service agreement; and do your due diligence when it comes to record keep- ing. It can save your building or HOA ma- jor money. n A J Sidransky is a staff writer/reporter with New England Condominium, and a published novelist. WARRANTIES... continued from page 10