Renovating a Co-Op or Condo Unit in NYC: ‘A Little Bit of Work’ Isn’t Always

The following article is a guest post by Attorney C. Jaye Berger.

With all the pandemic-related restrictions being discussed in the media, it’s sometimes startling to realize how much renovation work is still going on in and around co-op and condominium apartments.

It’s long been routine for co-op boards to require alteration agreements before residents can begin renovation projects in their apartments, but more condo boards are mandating alteration agreements for work in their buildings as well. These agreements serve the same purpose in both types of community—to ensure that a resident’s project does not damage, unduly disrupt, or otherwise negatively impact the building’s common elements, or their neighbors’ property or use thereof.

Along with those concerns, condominium boards also need to be mindful about how an alteration agreement could complicate any outstanding building violations their association may need to remedy, or make those violations more difficult to remove as time goes by. For example, in one instance I know of, unit owners in a condo building planned to have some renovation work done. They secured permission from the board, applied for and were granted a permit by the Department of Buildings (DOB), but then never actually went through with the project. No one thought anything of it until years later, when the board attempted to secure a certificate of occupancy for some commercial space it wished to lease. Before the C of O could be issued, the building needed to cure a violation it received during a prior DOB inspection. It turns out that the board couldn’t start work to cure the violation until the residents’ unused permit was withdrawn—but it had been so long since the permit was filed however, that the DOB no longer had the drawings, and therefore could not withdraw it until the drawings were recreated, the permit application re-submitted, and then re-approved. Ultimately it took well over a year to remove that one violation—all because of some long-forgotten paperwork for a project that didn’t even happen.

Friction between boards and residents can be another potential complicating factor when it comes to renovations. I receive many calls from owners and shareholders—many of whom have just closed on their apartments—eager to proceed with renovations, who are being told by their board that their work can’t begin “just yet.” The owners want to go ahead with their projects as soon as possible after closing, and are frustrated at what they perceive as foot-dragging by the board.

Upon closer inspection however, it often becomes clear that there’s more to it than just a recalcitrant board. For example, in one recent such conversation, the caller was a unit owner looking for legal counsel to accompany her to the next board meeting to state her case. She told me that she just wanted to do “a little bit of work” on her unit and couldn’t understand why she had to jump through so many bureaucratic hoops before the project could start. She felt that the board was being unreasonably difficult.

When I asked for details about the proposed project, however, the caller told me her plans included installing a shower where there had been a bathtub. To a layperson that may seem like “just a little bit of work,” but as a construction and co-op/condominium attorney, I see a lot of potential complications right off the bat. First and foremost, the project as described involved what’s called “wet over dry” work—renovation work on a “wet” area, like a bathroom or kitchen, positioned over a “dry” area, such as a bedroom, on the floor below. In addition to that, it was not clear whether a building permit would be needed, and the caller said she had not worked with an architect in preparing the sketches presented to the board. No wonder they were taking their time!

While the idea of a shareholder or unit owner just commencing a major renovation project without any sort of notification to their board may defy common sense, it’s more common than you might think. Indeed, thanks to the pandemic, some buildings have been virtually abandoned as many residents relocated to weekend homes in order to avoid exposure to COVID. Stories have emerged of residents taking advantage of the situation to get around their buildings’ rules about alteration agreements for renovations. In one instance I’m familiar with, a party purchased a condominium unit in cash and then just began renovating the apartment—including a bathroom—without submitting any plans or securing board permission, much less an alteration agreement. (The board did stop the project when it realized what was going on—no doubt leading to extra costs for the owner that could have been avoided had they followed proper procedure before beginning the work.)

In all but the most superficial of renovation projects, boards have a duty to review proposals, vet plans, and make sure that the work being done on one resident’s home isn’t negatively impacting anyone else’s. Boards have considerable discretion to do so under the Business Judgment Rule, and should have very specific rules in place as safeguards. Resolving matters in court is difficult, time-consuming, and expensive, so when it comes to renovations, alteration agreements, and the documentation to support them, it’s always advisable to work things out with the assistance of counsel before a single nail is hammered.

C. Jaye Berger, Esq., is an attorney and principal at the Law Offices of C. Jaye Berger, located at 110 E. 59th Street, 22nd Fl., New York, New York 10022, 212-753-2080. She focuses on the areas of construction, real estate, and co-op and condo law and litigation.