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Real Estate :: Holiday Bonuses for Building Staff

Accounting for Holiday Bonuses

I believe that last year the board of my co-op gave bonuses to the staff and to the building manager, who is under contract, without informing shareholders. I have no doubt that this is lawful, but I would like to know how much money they gave to the staff. Do I have the right to review the books to find this information?

The New York City tradition of tipping building staff is often a fraught gesture of the holiday season. While residents anxiously stuff envelopes for the doorman, the night porter and nearly everyone else, co-op and condominium boards do the same. Building employees have come to expect (and rely on) this end-of-year windfall. “This is a substantial portion of their yearly income,” said Eric D. Sherman, a Manhattan real estate lawyer.

Boards use various methods to decide how to divvy up bonuses, and they do not have to enlighten shareholders about their methodology. Shareholders do, however, have a right to inspect the books and records of the building, and staff bonuses would fall into this category, Mr. Sherman said. Some co-ops also allow shareholders to read board meeting minutes and review the corporation’s financial records.

You could start by sending an informal email to the board president, asking for the information. It is certainly the appropriate time of year to be curious about such things (although even in the dog days of August you would have a right to inquire).

If the president rebuffs your request, send the board a written letter demanding the information, pointing out that it is part of the corporation’s books and records. Explain why you want to know. Specify a date and time, during business hours, that you would like to examine the records at the office of the managing agent. If, for some reason, the board refuses your request, you could file a lawsuit compelling the board to act. But your request is fairly innocuous, so with any luck the board will comply.

If you plan to base the size of your own tips on the information you find, keep in mind that buildings do not give bonuses so residents can duck out of holiday giving. You should base your tip on the quality of service you have received (or hope to receive next year), not on the bonus that staff members received from the co-op board.

Slow Repairs

I live with my family in a rental apartment, and our landlord relies on a handyman who is sometimes slow to make repairs. When our only toilet broke recently, the handyman was not able to come for two days. How can a tenant be expected to go without a toilet for two days? I’m at my wit’s end.

It should go without saying that your New Jersey landlord needs to provide you with at least one functioning toilet at all times. If it breaks, the landlord should fix it immediately, and by any means necessary. Otherwise, he could be violating the warranty of habitability, which requires apartments to be maintained in safe, sanitary and decent conditions, said Stacey R. Patterson, a New Jersey real estate lawyer. An apartment without a working toilet would not qualify as sanitary living conditions.

But here is where the law has some gray areas, even when it comes to toilets: Let’s say you had two bathrooms, and one toilet was still working. In that scenario, your apartment would not necessarily be considered uninhabitable, so the landlord might be able to respond with a little less urgency to the situation. “The level of seriousness will dictate how much time is considered reasonable for a landlord to make the repairs,” Ms. Patterson said.

So what happens when the only toilet is broken and the handyman is nowhere to be found? The law offers you a few remedies. You could simply hire a plumber to repair the toilet and deduct the cost from your rent (remember to include copies of the receipt). As a tenant, you are also allowed to withhold rent until the landlord makes the necessary repairs, a course of action that would not make sense in this situation. Or you could pay for the work and sue the landlord for reimbursement, but that means taking the landlord to Essex County small claims court.

Regardless of which option you choose, you must first inform the landlord of the problem in writing and give him a reasonable time to respond, unless it is an emergency that would prevent you from being able to contact him in writing before making the repair.

Costly Leaks

A water leak from one of the apartments in our co-op caused about $30,000 in damage to three other units. The shareholder did not have liability insurance, as required by the terms of the proprietary lease, nor is he responding to demands for payment of damages — another requirement. Does our board have an obligation to take legal action for these violations or is it up to the individual shareholders to bring their own actions?

Hudson Heights, Manhattan

Individual residents cannot sue a neighbor for lease violations. Only the co-op, which acts as a landlord, can do that. The residents who have sustained damages could file a claim with their homeowners insurance policies. In turn, their insurers could sue the offending neighbor to get reimbursed, said Kevin L. Smith, a Manhattan real estate lawyer who specializes in insurance coverage. (If residents are reluctant to file insurance claims, they could sue the neighbor for damages.)

The offending shareholder is in default of his proprietary lease for failing to maintain his liability insurance. The board should send him a default notice. If he fails to get the proper insurance, the board could seek to terminate his proprietary lease and begin eviction proceedings against him, or seek a court order requiring him to get the insurance.

The board should also put the building’s insurance carrier on notice. The co-op might ultimately be responsible for repairing portions of the damaged apartments, if any common elements were harmed. In that case, the co-op (or its insurance carrier if a claim is filed) may end up suing the offending shareholder for any costs incurred because he had no insurance coverage.

For more info: http://www.nytimes.com/2015/12/06/realestate/holiday-bonuses-for-building-staff.html

Posted by Kimberly English | on