Updating Your Alteration Agreement: What Every Board Should Know

"They wanted to be fair to shareholders and to the building," explains the board's attorney, Scott Greenspun, a partner in Braverman Greenspun. "It was easier to stick with the critical points in our original alteration agreement and modify certain things — enforcing the completion date, the cost per day for extensions, the definition of 'cosmetic' work that's permitted after completion."

Because of the building's age, the board now forbids the use of jackhammers. Also, the agreement requires the engineer to sign off on plumbing and electrical wiring before walls can be closed. It makes the renovating shareholder responsible for any damages resulting from modifications to such items as windows, plumbing or flooring. 

Further, when selling the apartment, the shareholder must notify the buyer about the scope of the renovation and the new owner's continuing liability for it. No more than three of the co-op's 26 units can undergo a renovation at any given time. 

Three Main Points

The board's president, speaking on condition of anonymity, says: "There are three main things about an alteration agreement: it has to be detailed, it has to give the board [options], and it has to be enforced. If we specify the fines for missing the completion deadline up front, then the shareholder can shift that burden onto the contractor in his construction agreement."

Keeping on top of a renovation's progress was another goal of the new agreement, the president adds. "Part of the problem was that we would sign off on a renovation and nine months later, we would find out there was a delay. As a board, we wanted more updates from our architect because we realize things get delayed for reasons beyond anyone's control."

At this particular building — as in most co-ops and condos with alteration agreements — making sure that everything runs smoothly is up to the managing agent. In this case, Timothy C. Grogan, president of Grogan & Associates, reviewed the construction contract, made sure that the security deposit was paid, and checked that all insurance and Department of Buildings filings were in order and that periodic inspections by the building's engineer or architect were performed on time. 

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