Sometimes, even with the best of intentions, things go wrong. When it comes to a design project in a multifamily building, be it a lobby renovation, a roof deck build-out, or repainting the common hallways, the ‘wrong’ part can involve anything and everything from bad taste, to a dysfunctional design committee, to a budget-busting under-estimation of costs. Disasters can happen in an individual unit, or on a building-wide basis. Often, they can be corrected without too much pain or suffering. Other times, that’s not so easy.
Get Your Permits
Jorge Arias, a New York-based architect, suggests that, “A typical mistake that architects make in New York is when they ‘concede’ to designing projects done without permits, or for projects where there is much more construction work than what is reported.”
He recounts a case that occurred in Trump Tower in New York City: an owner got clearance for some cosmetic work on two apartments. They ended up combining the apartments and doing a lot of very much not-cosmetic plumbing work without permits. The architect involved ‘let it slide.’
A few years later, the apartment was offered for sale, and during the due diligence process the buyer and his legal representatives found that according to the Department of Finance, the apartment was reported as one unit. But according to the Department of Buildings, it was two separate apartments. “That exposed the illegal work, and also created a big liability,” says Arias. “Any water leaks, gas leaks, or fire damage that might affect neighbors would provide those who suffered damage the right to sue for millions of dollars.
“The situation of course needs to be fixed to allow for the proper sale of the property,” he continues. “The corrective work involved costs much more money and time than the ‘savings’ for not doing the right thing at the time of construction. This is a common mistake shared by the owner and the architect, but it is the architect who should have rejected this possibility – and so should all other architects – in order to clarify the rules and to elevate the standards of the profession as a whole.”
Pay Attention to Liability
The Cooperator learned of a potential nightmare waiting to happen in a midtown co-op. The board of directors of the building decided to undertake the installation of a deck on the property’s roof. They hired individual contractors to do portions of the job, such as installing pavers, planters, and furniture separately – without proper plans or Department of Building approvals. Julie Schechter, a partner at Montgomery, McCracken, Walker and Rhoads, a law firm that has offices in New Jersey, New York, Pennsylvania, and Delaware, explains that there may be a wide range of issues affected by installing a roof deck, including everything from parapet wall heights to means of egress to inadvertently invalidating the roof warranty.
Setting aside the very thorny legal issues here, there are serious structural and architectural issues as well. For starters, the typical roof is not designed for the thousands of pounds of additional load that this roof now must sustain on a minute-by-minute basis. The load can – and probably will – cause noise and water infiltration problems for at least the top floor apartments, and may also seriously compromise the overall roof structure. There is also the distinct possibility that the existing roof materials will be damaged – if not in the process of installing the pavers and planters, then afterward, as people begin to use the roof as a recreational common area. All of this can result in leakage and drainage problems, further weakening the structure and causing additional problems.
Another major consideration here is added personal liability. For both safety and structural reasons, there is often a legal limit on the number of people permitted on a given roof at any one time. In a large building on a beautiful day or night, that number could easily be exceeded. That human weight can exacerbate the overload present from the pavers, furniture and decking material. Additionally, there is the risk of injury via trips and falls. Clearly the ramifications of that tragedy are innumerable, as is the cost of the lawsuit that might result from it.
Be Careful What You Wish For
Every board’s dream is to find the perfect contractor who can give them what they want for an impossibly reasonable price – but as with anything, caveat emptor is key. Going with the lowest bid is not necessarily the best route – and often it’s a huge mistake. If a quoted price sounds a little too good to be true, it probably is. It’s part of a board’s fiduciary duty to check both the references and the financial solvency of any contractor brought into the building or HOA to conduct work, design-related or otherwise.
Consider what happened to a mid-size co-op in New York City that decided to renovate their lobby after completing many other, less-visible improvements such as roof replacement, boiler upgrade and sidewalk repair. According to a board member in the building, they were on a tight budget and chose the contractor who offered them the most competitive bid. As part of the deal, the contractor agreed to pay for the construction materials for the renovation up-front, and would be compensated for what he laid out through periodic payments made over the course of, and at completion of the job. This is not an unusual arrangement with contractors in general; they often agree to this type of payment structure because it allows for some markup on supplies, which usually means the contractor will make a little extra on the job. Typically, contracted fees are paid in thirds: one third at the beginning of the job, one third at the halfway point, and one third at completion, often with a 10 percent hold-back.
What the co-op did not properly vet was the contractor’s financial position. It turns out the contractor was having cash flow problems, and didn’t have the money to pay the suppliers for their goods. The suppliers abruptly stopped shipping the necessary supplies and materials, and the job screeched to a halt. Ultimately, the co-op had to assume responsibility for purchasing of what was needed themselves. This saved a little money on the price of the supplies, but slowed the job down considerably. A project that should have taken three months in fact took eight months. And while delays and cost overruns are typical in pretty much all construction work, this delay was excessive, and the disruption to the building’s residents substantial.
The important takeaway from this building’s experience is that a co-op should always ask for extensive financial information from contractors before hiring them. No board – and by extension no co-op corporation – should find themselves in a position where their monies are being used by a contractor to play catch-up on someone else’s job. While a two-day painting job might not call for deep dive into a contractor’s books, anything requiring substantial outlay for supplies and labor should require the submission of a thorough financial package, not that different from what a co-op board would require from a potential buyer.
In another lobby overhaul disaster reported by a managing agent for a building in New York City, the co-op board chose a paint color scheme for the new lobby without consulting the residents. Typically, when a building or association is contemplating a fresh color scheme, several different options for residents to choose from are painted in swatches on a wall in the area to be repainted. In this case however, the co-op board simply picked a color and had the entire lobby repainted. The residents were very unhappy with the color choice. Ultimately, the co-op board fired the managing agent, blaming the entire debacle on them rather than on the board’s own lack of transparency and effort to engage residents in a big aesthetic decision.
Sarah Marsh, Principal with MAAI Marsh Architects, a New York City-based architecture and design firm, says that co-op and condominium owners and boards “don’t realize that they often need Department of Building approval (and in the case of individual unit work, board approval) until something happens, and the [unauthorized] work is revealed. Clients often dilute the architect’s role, and allow contractors to make changes, which can result in substandard conditions.”
Marsh mentions one such situation where a contractor made changes to the specifications and requirements for a basement, and wound up not digging deep enough. The basement wasn’t below the frost line, causing a myriad of future problems with insulation, condensation, and indoor environmental control.
While the vast majority of design jobs are executed and completed with little or no problem, design disasters can and do happen. Boards and residents can reduce the likelihood and severity of problems by doing their homework ahead of time, seeking out qualified, competent contractors with proven track records of successful projects, and resisting the urge to go with the cheapest bid. And that goes for any project – not just aesthetic ones.
A.J. Sidransky is a staff writer/reporter for The Cooperator, and the author of several published novels.