When Alterations Become a Headache …

Alterations to apartments are a productive source of conflict and litigation, because it’s very easy for shareholders to make changes that the board did not approve or that disturb the neighbors and create conflicts. There is a section in most proprietary leases that deals with alterations, and it says three important things that frequently lead to trouble.

The clause generally says that the shareholder shall not make any alteration to the apartment or to any part of the building that’s pertinent to the apartment without first obtaining the written consent of the lessor (the cooperative), whose consent shall not be unreasonably withheld or delayed.

Now right there you have two clauses that can cause problems. The first is that consent shall not be “unreasonably” withheld. That means that if the board objects to somebody’s attempt to turn their apartment into the Taj Mahal, they have to give reasons for objecting. So what does the board do to fulfill that? Usually, the board hires an engineer or an architect to review the tenant’s plans for the alteration, and, based on the architect’s comments, it will object to various portions of the work.

But often the board goes beyond that, and the board has policies concerning what they do or do not want to have happen in the building, policies based on the particular preferences of the shareholders or of the board members. But a court may find the building policies to be unreasonable. So the first thing that I tell boards is if they have this “unreasonably withheld or delayed” clause, they should call a meeting of the shareholders and amend the proprietary lease by getting rid of that clause. If you don’t, you lose control over the alterations.

The second problematic clause is decided that if a shareholder wants to make an alteration somewhere else in the building outside his apartment, the board has to give a good reason why he shouldn’t be allowed to do that. That strains common sense to the utmost, but that’s our court system. So certainly that’s a second clause that should be amended.

The third issue is the question of what work constitutes an alteration that is controlled by this clause. The courts have found that installing appliances like a washing machine does not constitute an alteration, so the clause should be amended to spell out in more detail what it is that requires consent.

Boards generally craft an alteration agreement that is very specific about what shareholders are allowed to do, what they’re not allowed to do, the conditions under which they can do it, the insurance that the shareholder is required to have, plus all those myriad details that the proprietary lease doesn’t get into.

Of course, the alteration agreement requires the shareholder to provide plans, and frequently the shareholder does things that aren’t in the plans. When the board finds out about it, there’s always conflict. The shareholder’s argument is typically, “Well, you approved this.” And the board’s answer is, “No, we didn’t.”

So, in addition to what’s in writing, the board has to supplement that by paying very close attention to what is being requested and what’s actually going on inside the apartment while it is undergoing alterations.