New York based property management firm, All Area Realty Services blog. Find tips for Co-Op Boards & Residential Building Management.

A Right Of First Refusal Explained by All Area Realty Services

Posted by All Area Realty Services Team on Nov 7, 2018 3:29:14 PM

In a condominium, unlike a co-op, the board doesn’t have a large amount of leeway when approving or rejecting a proposed sale. A Right of First Refusal is a way for the board to step into a proposed deal on a condominium on behalf of all unit owners, instead of allowing the deal to go through. 

When would a condo board use the Right of First Refusal?

The vast majority of the time the board will waive their Right of First Refusal and allow the sale/leasing of the property to progress. A couple of examples of when it would be in their interest to use their right are:

Example 1:

If there is a proposed sale between two family members at an extremely discounted price.

In this scenario, the building's board could buy the apartment to keep for staff, they could flip it at a higher price, or they could lease it out to a renter. The board would want to intervene in this scenario because if an apartment sells at a value much lower than the market value, it will affect the value of the whole building. 

iStock-637151846

Example 2:

If the proposed sale is with such an objectionable purchaser that allowing them into the building could disturb the overall peace in the building or if they have a proven record of financial misdeeds. 

In this scenario, the board could again use their Right of First Refusal to prevent the purchaser from entering the building as an owner. 

How to discover if a condominium has a Right of First Refusal.

To find out if a condo has a Right of First Refusal you should refer to that buildings Offering Plan. It is important to investigate and discover if the building holds the right because not all condominiums do. Even some of the condos that do, only have the Right of First Refusal on their commercial units, if it is a mixed-use building. 

The truth is that the vast majority of condominium sales do go through undisturbed. However, it is important to always arm yourself with all the information before a major purchase, like that of a condo. A condominium could or could not have a Right to First Refusal, so it is important to look at the buildings Offering Plan to ensure that your purchase goes through smoothly and with the outcome you’ve hoped for.

If you serve on a co-op board or condo board and need professional property management services, contact All Area Realty Services and find out why our over 30 years experience and loyal clients makes us experts.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area. 

Topics: Co-Op Board, Condo Board Association, Buying a Condo, Co-Op Building, Co-op Insurance, Co-Op Board Lawsuit

Handling Lawsuits As A Co-Op or Condo Board

Posted by All Area Realty Services Team on Oct 2, 2018 4:14:43 PM

Lawsuits are expensive and time-consuming, and can quickly turn into a financial burden. And unfortunately in some cases it is the only option for resolution.

The Basics

The most common lawsuits include noise complaints between neighbors, construction defects in units, and attempts to collect delinquent payments from residents. If you are the defendant the lawsuit will begin with you being served with a complaint. You will have 20 days to answer the complaint with either an answer or to file a motion to dismiss. You can seek to dismiss the complaint on two grounds: you can say that suit is not strong enough for “a cause of action” or you can try to dismiss by virtue of an “affirmative matter.” 

Also, keep in mind most cases are settled before the going to trial, or the completion of a trial. 

iStock-660743394Don’t Go Through a Lawsuit Alone 

If you attempt to resolve the dispute yourself it could ultimately create more legal challenges. You could find yourself in the trap of selective enforcement. Inconsistent rule enforcement could not only get you in trouble, but empty threats can result in issues as well. In the first phase of a lawsuit, the involvement of your attorney is crucial in steering you to a successful path to resolution.

Although all lawsuits are public record if you have an attorney all of your discussions will be protected by the attorney/client privilege. If you discuss the lawsuit or seek advice to anyone else you will not have this confidentially protection and could have personal information about the lawsuit leaked. 

It is important to note that if you’re covered by general liability insurance or Directors & Officers coverage you could have your defense provided by your carrier.  

How Much Will a Lawsuit Cost 

Predicting the cost of a lawsuit is difficult. The more actions necessary to take place during a lawsuit and the longer it is all run up the price. If you come into the situation with reasonable expectations, a willingness to compromise and communicate you can really save yourself a lot of time and money. 

Alternatives 

You can try to meet with the other party and resolve the issue amongst yourselves. However, as mentioned above this is a gamble and could end up costing you even more money in the end. At the very least an attorney should be present as a mediator. 

The Consequences of Constant Litigation iStock-478524467

A long history of litigation may hurt your standing with prospective buyers and lenders. Prospective buyers may question the building’s financial stability, if the board is ruling effectively, or if the residents have hostile relations with the board. Also, lenders may take the constant litigation into consideration when underwriting their loans. 

Lawsuits can be expensive and time-consuming experiences. However, if you keep all the points above in mind it can help to cheapen and shorten the time span of your lawsuit. 

If you serve on a co-op board and need professional property management services, contact All Area Realty Services and find out why our over 30 years experience and loyal clients makes us experts.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area. 

Topics: Co-Op Board, Condo Board Association, Co-Op Building, Co-op Insurance, Co-Op Board Lawsuit

Can A Co-op Board Member Be Sued?

Posted by All Area Realty Services Team on Jun 28, 2018 2:06:51 PM

As co-op board member, you may not think you’d ever come into a situation where you could be legally sued, but unfortunately that’s not the case. In most instances, you're being sued as a board member from an angry co-op resident who wishes to bully the board into doing something in their favor.

You might be thinking, “If I’m being sued as a co-op board member who pays the legal fees?”

Most co-op boards carry liability insurance so if you do end up being sued as a co-op board member, the liability insurance would cover the legal costs of the board.

If you’re unsure if your board carries liability insurance, you can reach out to your property management company and ask. Someone on the property management team should have a copy of the liability insurance or other insurance plans the board carries.

What are the most common lawsuits against co-op board members?

The term lawsuit is often associated with someone wanting to get financial returns on a situation they were involved with. In the case of suing co-op board members, the most common suit is against board members for pet policies.

iStock-478524467It’s very rare that you’d see a case where someone is suing for money in a lawsuit against a co-op board. Instead, they often want co-op building's policy overruled in their favor.

The plaintiff in these cases is responsible for all legal fees and once the ruling becomes a case, they’ll often add on a few other personal changes they want made in the policy to favor their situation.

It’s a common fact in New York City that lawsuits against a co-op board member are typically filed from people who do not want to follow the rules, have a lot of money and time, and simply want something to do - especially if they feel slighted in any way. Because of that, New York courts usually favor and protect the co-op boards if they show proof that the decisions made are law abiding and made in good faith.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area. 

Topics: Co-Op Board, Co-Op Building, Co-op Insurance

Co-op and Condo Insurance

Posted by All Area Realty Services Team on May 8, 2018 3:21:21 PM

Most people have some form of insurance, whether it is automobile, life, health, dental, or home insurance. It should come as no surprise that most mortgage lenders will require you to show proof of insurance prior to finalizing paperwork. In this instance, the lenders are covering their losses should anything happen between you signing the loan agreement  and before the loan is paid in full.

Today, expert property management professionals All Area Realty Services, share a few reasons why  co-op or condo insurance is important and answers the question of what happens when damage caused by another owner damages your co-op or condo as well?

Is Insurance Required by Law?

No. Generally, bylaws do not require you to show proof of insurance. In the case of a mortgage, the lender is requesting proof of insurance before they will process your paperwork. Even though homeowner’s insurance is not required, it is strongly recommended.

Here are two cases we've seen in our experience, where homeowner’s insurance would have come in handy:

A neighbor's bathroom overflows, or a pipe bursts and water seeps into your home.  

iStock-921346082

  • If neither of you have insurance, you’ll both be suing each other for damages. With insurance, your insurance will take care of getting the damages fixed and get the correct party to make any payments needed
  • If the damage seeps into a common area, the building's insurance would need to have a claim filed and that would likely raise all homeowner premiums. In this case, you’d be paying for both your damages and the building's through your premium increases.
A neighbor leaves their gas stove on and it causes a fire. 
  • If they don’t have insurance or you don’t have insurance and the fire caused your property damage, after losing any or all of your belongings, you would also need to pay out of pocket for all damages and replacements.

There are several random things that could happen. As much as you try to avoid them, mistakes happen and sometimes they are inevitable. It is best to be prepared for these issues and have a homeowner’s insurance plan in place. 

Before you start shopping for the best coverage at the best price, find out what’s covered by your building’s policy and what isn't. Recently, Brick Underground, published a Co-op and Condo Insurance Checklist that is incredibly informative and lists several things for consideration. It is a must read!

Ask your building’s property management company if they have any partnerships with local insurance companies. There is a good chance you'll get a nice price break in working with a local company that is referred by your property manager and that most likely already insures other owners in your building.

All Area is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area. 

 

Topics: Co-Op Building, Co-op Insurance, Condo Insurance