Frequently Asked Questions – FAQ

FAQ: What does a property manager do?

Property management professionals implement the policies and procedures established by the building’s board, governing documents and House Rules. As specialists in building management, your property manager also advises the board and its residents on a myriad of other issues, such as:

● Shareholder and unit owner relations

● Staff utilization, hiring, firing and training

● Apartment alterations

With regard to the building’s infrastructure, plant and equipment, the property manager strives to be proactive by making recommendations that recognize the need for preventive maintenance, as well as forecasts for major capital repairs which may become necessary as a building ages.

Managers must be well versed in compliance issues, as the statutes and laws governing our industry constantly change. We are up-to-date with the regulations issued by the NYC Department of Buildings (DOB), Environmental Control Board (ECB), and Fire Department (FDNY), all of which send periodic revisions. In addition, we follow the new laws regarding smoking and Board disclosure. https://gumleyhaft.com/services/property-management/

FAQ: When do I turn to my property manager?

The property manager is responsible for the management of your building on a day-to-day basis.

In most instances, if you have an issue regarding your apartment, first contact the superintendent or resident manager. If the problem is too complex, not handled in a timely manner, or of a nature that someone with more authority needs to resolve, the superintendent will refer you to the property manager.

If you are contemplating an alteration or other work in your apartment, there is a pre-established procedure that must be followed. That process is administered through the property manager’s office.

If you are selling, leasing, financing or transferring your apartment, you will be working with the managing agent’s closing, or transfer, department.
The requirements for insurance certificates, coop and condo questionnaires submitted by banks, real estate tax abatement questions, and matters of building policies and procedures, are all handled by the property manager, as well as the assistant property managers.

At Gumley Haft, all are experienced in the requisite forms and requirements of the entities involved. If you need assistance in these matters, your property manager and his or her support staff are always ready to help. https://gumleyhaft.com/services/preventive-maintenance/

FAQ: How does a cooperative fund a capital improvement?

There are several ways to fund capital improvements when it becomes imperative to replace a roof, upgrade elevators, replace the HVAC system, or renovate lobbies and hallways. Capital improvements are accounted for differently from expenses necessary to operate the building on a daily basis. Every day expenses are covered by the operating budget, which enumerates wages and related benefits, mortgage payments, taxes, energy and utilities, insurance, professional fees, and others.

Decide on a Policy for Your Building

Philosophically, Boards need to first determine whether to adopt a policy as a pay-as-you-go building, or to utilize more traditional bank financing. Of course, a Board could incorporate a mixture of the two.

https://gumleyhaft.com/services/financial-management/

In a pay-as-you-go building, a coop Board could use existing cash reserves, and/or assess shareholders for the full or partial cost of the project. The underlying concept is that it is unnecessary for the Cooperative to hold significant reserves, and that when there is a need for capital work, an assessment will be used to pay for it.

Alternatively, a Board could choose to finance capital improvements by either taking a mortgage (if one does not already exist); refinancing the existing mortgage at an increased amount, or utilizing a line of credit. Generally, if you were to either take a mortgage or refinance an existing one, it would be prudent to determine what the coop’s capital needs may be over the next 5 to 10 years to borrow an appropriate amount.

Different Types of Interest Determine Funding Choices

A mortgage generally has a fixed interest rate for the term of the loan. It may be prepaid, but is subject to a penalty, which typically decreases closer to the maturity of the loan.

A line of credit usually carries a floating interest rate (as opposed to a fixed rate mortgage): interest is paid only on what is borrowed, and the principal can be prepaid in whole or in part with no penalty.

There are variations to the above.

Sometimes a Board will elect to take a line of credit with the view that a series of flip taxes, or other one-time income, will allow the coop to prepay the loan. Other times, when the mortgage may have a year or two left before maturity, a line of credit is a better choice. The line then would be repaid when the existing mortgage came due and a new, larger mortgage was taken.

Interest and amortization (repayment of principal) are payable monthly and will increase the monthly carrying charges, unless the Board chose to repay the loan or line with an assessment.

In a Cooperative, there are generally no restrictions on the Board’s ability to borrow money and it is not subject to shareholder approval. Funding capital improvements in a Condominium is a different process, which will be explained in this space in the future.

FAQ: How do I get my renovation approved?

If you are planning to renovate your apartment, you must first request permission to do so. For this purpose, a resident must contact their managing agent, or account executive, to alert them to the type of work desired. Renovation and cosmetic work require a type of alteration agreement, which protects the building and associated parties in the event the intended work goes awry; could pose short or long-term obstacles to the building’s operation or infrastructure; or adversely effects a neighboring apartment.

Planning for a Gut Renovation vs. Decorative Changes

Typically, there are two types of agreements: an Alteration Agreement for renovation and construction work, or a Decorative Agreement for cosmetic work, such as painting.

Within each agreement, there is a set of requirements that the shareholder or unit owner must comply with. These agreements are intended to formalize the rights and obligations of the parties with respect to the proposed work.

Major renovations, such as gutting the apartment, combining apartments, or redoing a kitchen, require a written Scope of Work and a set of architectural plans submitted for review by the building’s architect, managing agent and superintendent. A pre-construction walkthrough is also completed. The plans must then be approved by the Board and its professional advisors.

Certificates of Insurance are Required for All Jobs

Next, comes the paperwork. All contractors and subcontractors who will be working on-site must submit up-to-date certificates of insurance. Required permits from various city agencies must be obtained before the work may start. Approval for go-ahead occurs only after the managing agent is satisfied that all certificates of insurance, licenses, permits, and revised drawings or other documents have been provided.

Once the Alteration Agreement is executed, personal letters to the neighbors are written to make them aware of the impending work.

Now, the work may commence.

Running the Job

During the course of the renovation, the building’s architect conducts periodic inspections. On a daily basis, the building’s superintendent reviews the job site to ensure that work performed is in accordance with the approved plans and complies with all building policies.

Once the job is completed, the architect must close-out the Dept. of Buildings (DOB) work permit in order to receive a Certificate of Completion.

It should also be noted that an Alteration Agreement has a long-term effect on a residence. The agreements are assigned to future owners. This means, the new owner assumes the alterations of all the predecessor owners and remains responsible for the work.

Step One: Speak with your Property Manager

How does a resident get a renovation approved? Before you start, we recommend speaking with your property manager about your plans to become informed about the process. https://gumleyhaft.com/why-gumley-haft/