Don't Spend a Quarter to get a Dime

In his four years as president of the co-op board at the 430-unit Sunny Hill Gardens in Woodside, Queens, Eamonn Carr has developed a mantra: “Negotiate – don’t litigate.”

Carr, a real-estate broker, explains his philosophy this way: “You’re not doing yourself a service when you have to spend a quarter to get back a dime. Most [contractors] want good references, and that’s why they mostly will end up doing the right thing. They will work with you when you have a problem.”

This came home when the co-op board recently performed mandatory Local Law 11 facade repair and discovered that the contractor had inadvertently caused some problems. “The project damaged a lot of our landscaping,” Carr says. “Also, the irrigation system didn’t work because it was damaged. In addition, a lot of the landscaping was covered by the scaffolding and didn’t get any light, and plants were dying. As a result, a lot of the landscaping had to be redone.”

Instead of suing the contractor, the board negotiated and persuaded the contractor to put up $20,000 toward repairing the damage. The landscaping and irrigation system were returned to their original state at no cost to the co-op.

But when entering into this kind of negotiation, words are not enough. Proof is needed. “I would say it’s customary that whenever Local Law 11 causes damages to the landscaping, for the most part, the damage will be covered,” says Sunny Hill Gardens’ property manager, Jennifer Jimenez of Metro Management. “Of course, one needs to have proof of the condition of the affected areas after the damage occurred. We were able to provide exact pictures of the damage.”

It is advisable to take as many pictures as possible before the contractor begins work. That way, even if damages are not covered in the contract, it is possible to recover money.

The importance of proof is a lesson the seven-member board at Sunny Hill Gardens learned six years ago. “We had a property manager who was combining and mingling funds from several properties and siphoning off money for himself,” says Carr. “In such a case, you do have to start a litigation process in order to get money back from the insurance companies.”

But again, the co-op board was able to present multiple documents to the insurance companies as proof of the manager’s malfeasance, then negotiate a settlement without going to court. “In that case,” says Carr, “we had to do a lot of negotiating. In the end we got about $450,000 back.” 

In Carr’s view, negotiating skills are vital for anyone serving on a co-op or condo board. “We have to keep the shareholders happy,” he says. “We still have a sponsor who has about 15 percent of the shares, and we have to keep her happy because she is a big part of our cash flow each month.” And going to court rarely makes shareholders or sponsors happy. Better to negotiate.