Page 1 - CooperatorNews New Jersey Winter 2022

NEW JERSEY THE CONDO & HOA RESOURCE COOPERATORNEWS Winter 2022 NJ.COOPERATORNEWS.COM continued on page 8 205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED to the next, “it’s not a standard real estate contract—every manage- ment company has its own form,” says Scott Piekarsky, an attorney with Phillips Nizer in Hackensack. That being said, “items that should be included and should be standard include, but are not lim- ited to: the fee, whether the fee may change and when, and by what fee schedule the client is to be charged for services outside of what the contract specifies. It’s also important to define when the contract ends, whether it’s cancelable with or without cause, and what the There are elements of board service that can vex even the most committed, most in- trepid volunteer—and negotiating a building’s management contract is probably at the top of that list. Vexing or not, however, the extent and quality of services available to your building community hinges on what’s in that contract; managers and management compa- nies are obligated to provide what’s agreed upon in it—nothing more, nothing less. That’s why securing the appropriate terms for the appropriate price is an essential component of maintaining a sound, properly functioning building. The Nuts & Bolts “Management agreements are the basis from which managing agents assist and help operate properties on a day-to-day basis,” says Mark Hakim, an attorney with Manhattan- based law firm Schwartz Sladkus Reich Greenberg Atlas. “A management agreement is intended to be ‘soup to nuts,’ providing a roadmap of the agent’s duties and responsibilities, including administrative and financial matters. The agent is intended to be the arm of the board, generally handling all matters during the term of the agreement, while the board continues to make the actual material decisions. Some ministerial decisions, like purchas- ing of supplies and so forth, are delegated to the managing agent so the board can focus on the bigger-picture items.” And while “management agreements for co-ops and condominiums contain many boilerplate provisions,” points out Dennis Greenstein, an attorney with the New York office of global law firm Seyfarth Shaw, “the devil is in the details. There may be unique physical, financial, and staffing considerations that should be considered and provided in the agree- ment to cover them.” And while there are certain elements that are pretty much universal from one contract Management Contracts 101 Negotiating Your Community’s Most Important Contract BY A. J. SIDRANSKY What Size Management Company Is Best? A Question of Service & Scale BY A. J. SIDRANSKY The Year in (P)Review Multifamily Trends in 2021— and Predictions for 2022 BY DARCEY GERSTEIN Co-op and condo communities come in all shapes, sizes, and configurations. They range from three-unit, wood- frame houses to high-rise apartment buildings containing hundreds of units, to sprawling townhouse communities in park-like settings. Like these com- munities, firms specializing in their management and operation can be large or small, generalist or boutique. The question for boards, shareholders, and owners is, what type of firm is right for you and your community? Big vs. Small, General vs. Boutique There are management firms that em- ploy literally thousands of professionals in all sorts of specializations, and small firms that employ just a handful of spe- cialists. Size does not dictate approach, however. Some firms are more geared for the efficient and effective execution of basic, daily management tasks—let’s call them generalists—and some take a more tailored approach to provide each client with exactly the experience they are seeking. This dichotomy between generalists and boutique firms has much more to do with a company’s pro- fessional approach than with how many people it employs. “Large firms offer more redundancy in terms of both services and person- nel,” says Stephen DiNocco, owner of Affinity Realty and Property Manage- ment, based in Boston. “Some clients view this as more availability, in that there’s always someone there to cover their property’s needs. That’s not to say that smaller, more specialized compa- nies can’t do that, too, but in general, larger firms have a larger client base, Remember in 2020, when everyone was so excited for 2021, “when all of this insta- bility and uncertainty will be over”? Right. Well, while there was some relief from pan- demic pandemonium as Americans started to get vaccinated against COVID this past spring and summer, the virulent delta vari- ant threatened to override the country’s hard-won progress and untold sacrifices. And while the overall economy seems to be on an upswing with businesses reopen- ing and consumers more inclined to leave their bubbles to make purchases, the major economic shifts needed to make enduring investments in our infrastructure, institu- tions, and the future of our planet are just starting to emerge from a Congressional quagmire. What did all this mean for the mul- tifamily market in 2021, and where do the pros see things heading in 2022? In a nutshell, it’s still a topsy-turvy world out there. Cities, which some declared ‘dead’ when population density was thought to be a major driver of coronavirus contagion, have shown a strong homebuying revival in recent months as lockdowns and re- strictions eased and vaccinations continue to be administered. The bidding wars that sent suburban home prices skyrocketing in 2020 and early 2021 have resumed in the urban markets—even in the luxury sector, which dipped significantly when the pan- demic and other economic factors chilled high-end homebuying. Adding to all this complexity is the reckoning that has come in the wake of the tragic collapse of the Champlain Towers South condominium in Surfside, Florida, this past June, which has prompted a wave of reforms and a recognition of the advanc- ing age of a large portion of the country’s housing stock, as well as the role that cli- mate change plays on structural integrity and the pitfalls of deferring building main- tenance for the sake of short-term financial savings. It’s the Economy, Stupid Every bit as true as it was 20 years ago when campaign strategist James Carville continued on page 9 continued on page 11