Updating Your Building's Alteration Agreement for Upscale New Realities

Renovation Rx

Because I had served as president of the board in the past and had done shareholder outreach before, the current president asked me to be a liaison between the board and the shareholders. I recommended we set up a committee, because we needed a lot of expertise and hard work.

We found that the building and its staff were not geared up for the kind of work these new owners envisioned. For instance, we do not have a service elevator, so during construction, one of the two passenger elevators had to be used to ferry workers and supplies up and demolition debris down — meaning the other residents had to wait longer to get a lift.

Also, we didn't have the kind of rules in place to deal with the demands of multiple construction projects taking place at once. Our three existing alteration agreements were written in 1985 and did not cover a host of areas. Moreover, without written building standards, each renovation was treated on a case-by-case basis. This added to the responsibilities of -— and the time spent by — the co-op board.

In addition, without written procedures that showed shareholders how to navigate the process, our residents had to turn to someone in authority to answer questions about renovations — yet there was no point person designated for that purpose. Many people were involved in the approval process: a part-time, on-site office manager; a managing agent; an architectural firm; and the 13 members of the board.

To deal with these issues, the renovation committee made changes in four areas:

Schedule. A letter to shareholders explained why only two major renovations could be scheduled at once, along with several smaller decorating jobs. The longer-term goal was to delegate coordination of these projects to the office manager, while having the superintendent review insurance and schedule jobs. We used a checklist to track all documents received from each unit.

Alteration Agreement. We reviewed the Real Estate Board of New York's (REBNY) alteration agreement, written in 1999. Then the committee consulted our managing agent, superintendent and the architect from the firm hired to advise the board on renovations. We also read alteration agreements used by similar buildings. After four months of work, we customized our own alteration agreement, addressing legal, operational and financial concerns. The board approved our recommendations. We posted the documents on BuildingLink (an online database to assist in the management of real estate) so our shareholders could access them as needed.

Insurance. To avoid confusion by shareholders and contractors, instructions were added to our insurance requirements and to our "hold harmless" agreement. The superintendent became the central point of contact for approving these documents. The committee consolidated the whole process into a one-page checklist, written from the point of view of a shareholder, and published it on BuildingLink. 

Standards. Our committee also addressed specific issues raised by shareholders. We agreed upon a louver color and a design for through-the-wall air conditioners, so that the building would begin to have a more uniform façade. We addressed requests for new vents to the outside where there had not been any before. We set standards for windows in different elevations. We established who was responsible for reviewing and approving the work before the walls were closed. With input from our professionals, the guidelines and requirements were approved at the same time as the alteration agreement.

The upshot? We are very pleased with the way this has all worked out. We now feel that we have a tightly controlled process that meets everyone's needs, protecting the corporation while addressing the concerns of those renovating.

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