Alteration Agreements The Prerequisite to Any Project

So, you want to renovate your kitchen.  You’ve chosen your tile, cabinetry, and fixtures. You’ve gotten bids from several contractors, and are ready to dig in and overhaul the whole space. 

But not so fast. You live in a co-op.  You need board approval before the first hammer falls. The same goes for you if you own a condo. The first step is what is known in the world of community living as an alteration agreement.

What’s an Alteration Agreement?

“An alteration agreement,” says Phyllis Weisberg, a partner at Armstrong Teasdale, a law firm located in New York City, “is the document that signifies the board’s consent to a particular alteration by a shareholder or unit owner, and sets forth the terms and conditions under which consent is given.” Weisberg goes on to explain that “without such an agreement, the responsibilities of the person performing the alteration would never be spelled out.  These include, among other things, providing insurance coverage as specified by the board, and the necessary indemnities of the co-op/condo and others.  Without such an agreement, the board’s right to shut down a job would also not be spelled out.  This is of particular importance if the job goes bad; if a contractor is creating issues in the building, such as by causing damage or excessive and unreasonable noise; if the work exceeds the permissible scope; or if the job runs over the time allotted for the project.”

Kristopher Kasten, an associate attorney with Chicago-based law firm Michael C. Kim & Associates, explains that the term ‘alteration agreement’ as such isn’t used for condominium buildings in Illinois. However, there are documents, rules, and regulations that govern the same issues. “When a unit owner wants to do some kind of remodeling or construction work within their unit,” he says, “the first thing they must look toward is the declaration and bylaws of the association to determine what those governing documents say.  The next step would be to review the association’s rules and regulations.  What you commonly see is that unit owners have a right to make changes to their units without board consent, but those changes or remodels can’t adversely impact the common elements.”

William Chatt, a partner at Cervantes Chatt & Prince, a law firm with offices in Chicago and Burr Ridge, Illinois, adds that in the condominium documents, “there will be some boilerplate language indicating that in the event a unit owner is going to have work performed by a contractor. Before that happens, the owner must submit the proposed work, along with information on the contractor and an insurance certificate with the association named as an insured,” to the association.  For all intents and purposes, these requirements mirror what is requested in an alteration agreement by a co-op board.

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