Policing the Craze to Combine Apartments

Actress Marisa Tomei won an Oscar for her role in the comedy My Cousin Vinny, but one of her most recent productions turned into a drama that left no one laughing. The 51-year-old Brooklyn native, who collected her Academy Award as best supporting actress in the 1992 hit, lived in a modest Greenwich Village one-bedroom apartment – until she purchased a neighboring unit and knocked down walls to double her living space.

Tomei recently told Elle Decor magazine that she was “scarred” and “exhausted” by the project, which was capped with a lawsuit when insurance companies representing three downstairs neighbors, including filmmaker John Waters, alleged that Tomei’s negligence led to $128,000 in water damage to their apartments.

Despite such potential headaches, combining apartments is a solution that an increasing number of New York City residents are using to create more floor space in a tight housing market. According to architect Oswald Bertolini, who designs conjoined spaces and reviews project proposals on behalf of co-op and condo boards, a once-common path taken by many New York City residents has come to an end. In the past, he notes, “the Wall Street guy [would have] an apartment on the Upper East Side and [commute home on the weekends to] a wife and five kids in Connecticut. [Now] they’re bringing their families back to the city.”

“Since 2006 it seemed like wealth showered on New York City and the city got much safer,” adds attorney Adam Leitman Bailey, principal in his eponymous firm. “Then we had a baby boom. All that together means more people want to stay here, but they want bigger apartments to raise their families in.”

Industry experts say Tomei’s experience need not have been such a drama. A simple but iron-clad alteration agreement between the building and the owner doing remodeling should end anxiety. “There is a lot of litigation involved in combining apartments, but that can all be avoided with a proper alteration agreement,” says Bailey, who insists on a non-negotiable checklist for all apartment combination projects. “Boards should not be nervous. The key is to do preparation before beginning the alteration to prevent litigation.”
According to Bailey, there is “no excuse” for not establishing an application process that includes the following:

• The application, which should include exact detailed plans of the intended work.
• A time frame, which should state start and expected completion dates.
• An insurance policy, which names the condo unit-owner or shareholder, the board, and the building.
• A fee for processing the application and a fee for the co-op or condo for hiring its own engineer or architect to review the plans and approve them.
• An agreement between the co-op or condo and the contractor to make sure the owner and building are protected from any problems that may occur.
• An agreement indemnifying the building and the board for anything that may go wrong.

“It’s very simple,” says Bailey. “An owner or shareholder signs the alteration application, obtains insurance, follows the list of rules provided by the board and writes a check for the necessary fees, including the building’s engineer. The board approves the application, the managing agent delivers it to the person who wants to do the alterations, and you sign it. If it is not signed, then you don’t do the alterations. There is no negotiation in this. I have never seen anyone debate signing it. They follow the rules because if they don’t, the board won’t allow the alteration.”

Boards should also consider demanding the right to inspect work during the demolition or construction, as well as the power to enact a stop-work order, if necessary. Also important: an incentive to complete the work on schedule.

“These projects usually take [from] three months up to one year,” says attorney David L. Berkey, a partner in Gallet, Dreyer & Berkey. “The alteration agreement should have a time limit. If the job is delayed because they run out of cash or the contractor is slow, most agreements provide for liquidated damages to the board once you go over the agreed-upon termination date.”