RENT-REGULATED P.2

Boards also need to be on top of the ways new house rules or changes in amenities will affect rent-regulated tenants, especially if the sponsor or investor no longer has a seat. Seemingly minor changes could have major repercussions if they reduce access to amenities like intercom service, a doorman or storage space.

"The classic example is the old luggage room in the basement," says Mitchell S. Gelberg, managing director at Rose Associates. "If a renter was entitled to storage space originally, you can't take it away without reducing rent. If the board is thinking of converting to assigned cages, they need to keep that in mind," he points out.

That's not necessarily reason to drop the idea, just reason to think ahead. For example, plenty of boards have gone ahead and installed cages in their luggage rooms, but they set aside space for rent-regulated tenants. Addressing changes before they become a problem, helps avoid complaints being filed to the Dept. of Housing Preservation and Development  (HPD), the city agency that oversees rent-regulated apartments, which tends to damage relations between the board and the sponsor.

Ironically, the same can sometimes be said for overall improvements to the building if they mean raising maintenance or adding an assessment. "The landlord probably won't be able to increase the rent accordingly, and at some point they'll be looking at a negative cash flow," says Levy. That can result in a sponsor dragging his feet on maintenance payments, not to mention bad blood.

Some guidelines for dealing with rentals:

Keep in touch. Keep all residents — rental tenants and shareholders — equally informed about building issues rather than having the sponsor act as a go-between. "We had major work done and our elevator was going to be out for several weeks, so we put up signs and had meetings in the building for everyone. Many of the tenants are older, so we went to them directly and said, 'Hey, are you going to be okay with this solution? How can we make it work?'" says Crooke.

Be careful. There are very few aspects of your building's business that won't in some way be affected by rent regulations, so keep the basics in the back of your mind when considering any changes. "You always need to ask yourself, are their special considerations here? If you're in doubt in any way, do not hesitate to check in with your attorney," says Gelberg.

Take a long view. While the board exists to stick up for the co-op or condo's interests, sometimes it makes sense to concede questionable calls in the interest of improving the building. For example, if a pest-control issue is threatening to spill over from a rental unit into the rest of the building, it might not be worth it to bicker with the sponsor over who should call the exterminator. "These things can become an issue for everyone in the building before you know it. Sometimes they just need to be taken care of," says Davidowitz.

Be neighborly. These tenants are also your neighbors. Crooke recalls when an elderly tenant needed extra help getting out of her apartment so that plumbers could repair a waste line. Technically, it should have been her landlord's responsibility, but the board took steps to make things easier for her — like delaying the repair until her family arrived. "You treat a situation differently when you know the people personally. It's part of what makes your building a good place to live," he says.

Watch the rules. New house rules also need to be carefully mulled over with an eye toward how they'll affect renters. "You may want to go pet-free, but keep in mind that renters' pets will need to be grandfathered in. You'll need to think about how it will play out," says Wurtzel, who adds that inconsistencies between house rules and renters' rights make enforcement that much harder. It can also simply make living in a co-op feel, well, less cooperative.

"We always try to avoid setting up these kinds of differences," says Crooke. "After all, we are a community, and we do all have to live together."

From the October 2011 issue of Habitat  magazine. For print-magazine articles back to 2002, join our Archive >>