No Permit, No Alteration Work

Every co-op and condo board needs to have an iron-clad alteration agreement in place for those increasingly common instances where a shareholder or unit-owner wants modify his apartment or combine it with the one next door. But sometimes, those shareholders or unit-owners fail to understand the importance of securing necessary permits before work begins.

Although they had signed an alteration agreement, the shareholders at a co-op I represent started work before the permits came in. A neighbor who heard all the banging and noise called 311, the city sent inspectors in, and violations were issued against the corporation. Because the corporation is the owner of the building, the city holds the co-op liable for the fines that are associated with it; and the corporation must correct them.

The corporation got the summonses and went before the Environmental Control Board, which is the tribunal wing of various city agencies. The corporation got fined a certain amount and agreed to pay that, even though it was the shareholder’s fault that the proper permits were not in place.

My advice to the boards is to let your shareholders know that it’s not only the board that needs a permit for renovations, the shareholders need the permit too, because they’re ultimately responsible. To reduce complaints, it’s also advisable for shareholders to talk to their neighbors about possible inconvenience before the plans are drawn up.

The lesson here is that the board has to be careful at several levels. The first level is when you make any alteration agreement, make sure it’s clear in the agreement that permits are required before any work can commence. Most well-written alteration agreements will have that in there. The second level is to make sure the shareholder knows and understands the importance of the permits. Do not let contractors into your building until you’re sure that they have procured permits.

There are two ways to find that out: the contractor can give you a copy of a permit; or, thanks the Department of Buildings’ new computer system, you can simply go online, look up your address on the DOB website, and determine whether or not a permit has been issued for the work in your building.

Any fines will be paid by the corporation. But the fines will then be passed on to the shareholder, along with the legal fees, the administrative fees, and the soft cost involved in hiring an expediter and an engineer to review the plans. The shareholder is going to be left holding a rather large bag.

Boards have to be aware of the importance of the alteration agreement because it concerns quality of life, personal-injury liability, property damage – and, quite possibly, a large sum of money.

Geoffrey Mazel is a partner in the law firm of Hankin & Mazel.