5 Things to Do Before Signing an Alteration Agreement

Co-op and condo boards – the smart ones – have their attorney draw up an alteration agreement that must be signed by every shareholder or unit-owner who wants to renovate or combine apartments. The agreement typically covers a lot of ground: the scope of the work; review and approval by the board’s architect or engineer; a completion date (and per diem charges for jobs that run overtime); proof that the contractor’s insurance covers the board and the building; and provisions for the building’s engineer or architect to inspect the work in progress, to ensure that it sticks to the plans. Nobody wants to discover a surprise jacuzzi in Apartment 15-J. 

C. Jaye Berger, an experienced Manhattan co-op and condo attorney, has advice for anyone undertaking a major renovation or apartment-combining project: since the board has taken steps to protect itself, the building, and fellow residents, the person undertaking the renovation needs to take similar self-protective measures. Here are five tips from Berger, principal of Law Offices C. Jaye Berger: 

1. Read the Alteration Agreement Before You Hire a Contractor. This might sound ridiculously rudimentary. Not so, says Berger. “A client came to me recently and asked me to review an alteration agreement she was on the verge of signing – and she hadn’t even read it!” Berger recalls. “She didn’t realize she had 60 days to complete the work – which didn’t seem like enough since her last renovation project took four months. You’ve got to understand how much time you’ve got to complete the job before entering into an agreement.” 

2. Get the Timing of the Work in Sync With the Alteration Agreement. “One big thing to keep in mind is that you have to have your game plan organized before the job starts,” Berger says. “Your contractor has to agree to a time frame that fits in with what the alteration agreement allows. And if the work runs past the agreed-upon deadline, you need to make sure the contractor is responsible to pay the per diem charged by the building.” 

3. Insurance, Insurance, Insurance. “Your contract with the contractor needs to require appropriate insurance for you,” Berger says. “The board demands a certificate of insurance that names the board and the managing agent as additional insureds. Likewise, you want to make sure you have it in writing in the contract that you’re named as an additional insured by the contractor.” 

4. Avoid Costly Delays. Once the work begins, the clock starts ticking, so it’s in your best interest to have your architect or designer draw up specific plans and arrange for timely delivery of all required materials and appliances. “If the plans say you’re installing new cabinets,” Berger says, “then you need to choose the cabinets and work out delivery ahead of time. If you don’t, you risk delays in the project while these details are worked out.” And time, as the alteration agreement makes clear, is money. 

5. Get a Pro to Manage the Job. “It’s not a good idea for the shareholder or unit-owner to manage the project,” Berger says. “They don’t have the training. There’s a lot of coordination that needs to happen, and there are always surprises. You need a professional – usually an architect, engineer, or interior designer – to do what’s called ‘contract administration.’ You want someone coming by periodically to keep eyes and ears on the job and make sure that the work is in accordance with the design and that the contractor’s doing what he’s supposed to be doing. People don’t want to pay for contract administration, but the board is sending someone to inspect the work. They’re doing it to make sure your contractor isn’t damaging the building. You need someone who’s there for you.”