Page 8 - CooperatorNews New Jersey Winter 2022

8 COOPERATORNEWS NEW JERSEY —WINTER 2022 NJ.COOPERATORNEWS.COM WE ADVISE, YOU SUCCEED accesspm.com NJ Offices Flemington, Edison, Paramus, Mt. Laurel 908.237.9900 PA Offices Lehigh Valley, Horsham 610.791.1600 SINCERE Est. 1989 Knowledge and Experience. Always, in All Ways. Our team of highly qualified and experienced Engineers and Architects have made us the “go-to” Highrise Experts for more than 23 years. Capital Reserve Reportsapital Reserve Reports C Facade Inspection and Restoration Mechanical, Electrical and Plumbing Design Domestic/Heating Water Riser Evaluations Balcony Repair and Reconstruction Flat Roof Inspections, Repair and Flat Roof Inspections, Repair and Replacement Lobby Renovation and Design Parking Garage Repair Water Infiltration Window, Flashing and PTAC Replacement Forensic Investigation & Litigation Forensic Investigation & Litigation Support Building Condition Reports/Planning (646) 292.3515 350 7th Avenue, Suite 2000 New York, NY 10001 682 Highway 202/206 Bridgewater, NJ 08807 (800) 839.7740 potential penalties for doing so might be.” Ellen Shapiro, an attorney with Marcus, ment are generally fl at, and not based on Errico, Emmer & Brooks in Boston, adds percentages of any kind. As mentioned ear- that once fi nalized, “management con- tracts are oft en sacrosanct—very little can es outside the contract to be rendered, but be changed.” She explains this to her clients may charge the corporation or association when they seek her expert advice before en- tering into a management agreement. “Like pros we spoke to for this article all agreed any contract, though, the standard manage- ment contract should contain start and end included in any management contract, but dates and fi nancial considerations, as well should defi nitely not be automatic. as the role and duties of the manager.” Th e expectations of the client—in this case a co- op corporation or a condominium associa- tion—should be clearly delineated. What’s Typically Included Th e scope of the managing agent’s or agement of the company, and perhaps even fi rm’s work, including their compensation having the property manager reassigned. and any caps on decision-making authority However, when it becomes necessary, the they may have, must be included in the con- tract. “Management agreements are used that a timely termination is sent. Generally, to exclusively appoint the agent to run and a building will have a right to terminate operate the building,” says Hakim, “from upon 30- or 60-days’ notice without cause. payroll, to transfers and sales, to repair mat- ters, to the supervision of employees. For costs to the date of termination. It’s quite example, many boards will allow agents to rare in a management agreement for a co- enter into contracts—for repairs and sup- plies costing up to $2,500, say—without the but again, the agreement must be reviewed.” board’s involvement, though that fi gure may vary depending on the size of the building. terms of the agreement, such as the agent Not having to stop and revert back to the acting outside the scope of their author- board for small decisions facilitates more ef- fi cient and eff ective operations.” Greenstein recommends that a contract agreement,” can lead the board of a co-op “designates the individual to be assigned to or condominium to dissolve a management the building by the management company,” agreement before its end. As to what legal along with “a provision giving the board the or fi nancial penalties might be incurred, right to demand a change if it is not happy “someone can always assert a claim against with that person aft er \\\\\\\[they’ve had\\\\\\\] a rea- sonable time and chance to correct any de- fi cient behavior.” Piekarsky agrees. “You will be assigned successful, then they would have to seek to a specifi c manager,” he says, “and you will enforce a judgment if obtained.” like or hate that manager—so you want to include in your agreement the ability to in- terview your replacement manager, not just notice, explains Shapiro, adding that “if the simply be given one—especially if there was termination is for cause, there is a 10-day a poor relationship with the previous one. notice requirement with an opportunity to It’s also important to consider that man- aging agents leave companies, and if your building is faced with that situation, you broken management contracts rarely end want to retain the right to interview a re- placement as well.” “Another essential provision,” says Both management and the condo board Greenstein, “is requiring the managing would have to hire lawyers to go to court. agent to notify the board of violations placed Litigation isn’t cost eff ective.” on the property, and of any condition in the building or property which is known to be unsafe, or would be a violation if noted by fi rms, say the pros, keep in mind that any governmental agency.” Also, “a board should be very specifi c as less—transition. Hakim relates one not-so- to what they want and need, particularly seamless example that demonstrates why it’s with respect to inspections and site visits,” important to keep things cordial: adds Piekarsky. “You won’t get more prop- erty visits than what the contract dictates.” Th e length or term of property man- agement contracts is usually one to three fer process, and didn’t deliver the books years. Shapiro notes that in Massachusetts, the state limits the length of management agreements to no more than three years. Services can run from basic, ‘no-frills’ type contracts to all-inclusive. Fees for manage- lier, some contracts allow for certain servic- additional fees for those services. Th e legal that renewal provisions should defi nitely be Parting Ways Breaking a management agreement is never an easy decision. “Before doing so,” says Hakim, “we always suggest having a frank conversation with the upper man- exit agreement must be reviewed to ensure Th e building is generally only liable for the op or condominium to see any penalties, Greenstein points out that “breach of the ity under the contract, mismanagement (or worse) of funds, or willful default of the another person or entity,” Greenstein says. “Th e board would have to prove there was a breach or default and then damages. And if Massachusetts regulations provide ter- mination of an agreement upon 60-day cure.” Piekarsky notes that disagreements over up in court. “Ninety-nine percent of the time, there can be a negotiated resolution. Proceed with Caution When changing managing agents or you’re seeking a seamless—or near seam- “One of our condominiums terminated its managing agent,” he says. “Th e old com- pany refused to assist in the turnover/trans- MANAGEMENT... continued from page 1