Page 18 - NJ Cooperator Spring 2020

18 THE NEW JERSEY COOPERATOR —SPRING 2020 NJCOOPERATOR.COM tions—and the injuries they may cause— in the first place is far preferable to taking chances with employee safety and hoping for the best. According to Jay L. Hack, a partner at the Manhattan-based law firm of Gallet Dreyer & Berkey, LLP, conducting a formal risk assessment can help guide your board or management. “I strongly recom- mend that you conduct a risk assessment of your buildings, determine what risks exist, decide whether there are methods available to reduce those risks, and then take appro- priate steps to implement those methods when it is reasonable to do so under the cir- cumstances.” The Final Word While there may be a lot of abbreviations involved in the training and ongoing safety protocols for building staff, what should never be abbreviated are the actual precau- tions and information that are in place to ensure their safety. Proper education, im- plementation, and compliance—for both employees and their employers—are the cornerstones of a safe and injury-free work- ing environment for the doormen, porters, handymen, security personnel, mainte- nance workers, elevator operators, and managers who service and support the city’s many co-op and condo buildings. Take ad- vantage of the training, advocacy, and sup- port that are available through a variety of organizations in the city and elsewhere, and always keep in mind that it’s better to be safe than sorry. n Darcey Gerstein is Associate Editor and Staff Writer for The New Jersey Cooperator. STAFF SAFETY... continued from page 17 are getting quotes from excess and surplus lines carriers through wholesalers, which tend to have higher premiums. Sarah Dolce, one of our Senior Account Managers, says she has noticed “significant increases from not only our direct markets, but from ex- cess lines carriers through wholesalers as well.” Vanessa Pupa, another of our Account Managers, indicates that “insureds on the low end are seeing five to seven percent in- creases, but many are seeing 10 to 15% on their renewals. If the property has unfavor- able claims history, the insurance company is either canceling coverage or raising the premiums substantially, taking a take-it- or-leave-it stance.” This is causing many insureds to remarket their insurance – but there simply is no place to go. Courtney Fer- retti, another of our Senior Account Manag- ers, concurs, adding that “the carriers are tightening up their guidelines, which makes it harder to place business.” I tell everyone I talk to, if you are bud- geting flat for your insurance premiums in 2020, you are making a BIG mistake. Budget PARSING... continued from page 6 10% at the very least. If the insurance pre- miums come in less than 10%, you’re ahead of the game. As mentioned above, risks with losses or issues, such as the building containing Federal Pacific Stablok panels, which are known to be defective, may see more than 10%. Eventually, the market will soften again, but I would not plan on it happening in 2020. n Ed Mackoul is the Owner and President of Mackoul Risk Solutions in Island Park, New York. responsibilities for damage, mess, or other nuisance an animal might cause. That way, if a legal question does arise, the build- ing or complex has the policies in place to support its case. Overhaul for a New Millennium Attorneys we spoke to for this story did not indicate a universal time frame or schedule for updating governing documents. However, they also pointed out that precious few co-ops, condos, or HOAs have ever updated them. Consider- ing that many co-ops and condos incor- porated in the 1980s or earlier, it’s about time that boards examine their governing documents for provisions that are outdat- ed or obsolete. “One simple amendment,” says Axinn, “is to extend the lease’s expiration date, which many co-op corporations need to do, as their 50-year leases from the 1980s will expire soon without an extension.” As co-ops’ proprietary lease expiration dates approach, it is a good time for those build- ings to examine the finer points of their leases for areas that could use an update. “Also,” continues Axinn, “it would be nice if proprietary leases and corporate bylaws took note of the 21st century and provided for notice and meeting par- ticipation by email or other electronic means.” People who’ve grown up with email and smartphone technology might just assume that their building’s bylaws already have such inclusions, but the fact is that many governing documents still contain language that refers to written or in-person communication only, without mentioning phone, email, SMS, or web- enabled conferencing. As new technology and its adoption accelerate with every passing year, it’s in- cumbent upon boards to ensure that the methods of communication they are us- ing (or want to use) with shareholders and among themselves comply with leasehold provisions. Rather than fundamentally altering their corporate and community norms, making minor updates to certain governing clauses can allow for a wider ar- ray of options. UPDATING... continued from page 11 This Old House (Rules) Most changes in technology or social norms would be addressed in the house rules, say the attorneys we spoke to. For that reason, “It also needs to be clear that the bylaws allow the co-op board to amend the house rules without calling for the shareholders to vote,” says Roberts. Since these rules govern the everyday func- tion of life in the building, the process of changing them shouldn’t be encumbered by the time and effort it would take to in- volve the entire shareholder population each time. Co-op and condo boards need to be able to respond nimbly to changing regulations (smoking laws, for example) and technology (like e-cigarettes and vaping). And if your house rules include where to park your velocipede or require- ments for your water closet, quips Axinn, it’s high time for the board to address those visible lines of aging, so to speak. n Darcey Gerstein is an Associate Editor and Staff Writer for The New Jersey Cooperator. day’s tri-state property professionals are still feeling the sting from a double wave of corruption-related indictments brought by Manhattan District Attorney Robert M. Morgenthau back in the 1990s. That ended in charges for more than 80 New York real estate managers and management compa- nies. Five years later, 30 more individuals and 10 corporations were charged with stealing $4 million through kickback and bid-rigging schemes in another residential real estate industry scandal. By all accounts, the industry has cleaned up significantly since then. While there are undoubtedly still unscrupulous adminis- trators continuing to pocket money under the table from vendors, there is a common understanding that those schemes and tac- tics are part of an unsavory past. Intensi- fied scrutiny from law enforcement—and from boards and management firms them- selves—has led to a more ethical and ac- countable industry all around, but a savvy board should still keep its eyes open, and not hesitate to look closer if something seems off. “There are no stupid questions,” Wagner reminds us. “Ask the question. Challenge authority. I’ve seen some crazy things that were picked up by board mem- bers who just didn’t understand and asked the question.” When You're On Your Own So far we've focused on the bidding process when professional managers are involved. But where do self-managed com- munities turn to find qualified bidders, write an RFP, level bids, and interface with potential vendors? Given enough time, forethought, and planning, a self-managed board can defi- nitely get the job done. First, you already have a great resource: The New Jersey Co- BIDDING BASICS continued from page 13 operator! Our online Directory of Co-op and Condo Services (www.directory.coop- erator.com) includes an exhaustive list of relevant professionals covering everything from legal services to HVAC repair. But if your board simply doesn't have the time, or doubts its ability to navigate the process itself, there are other options. One such option is The Bid Lab, a New York-based consulting firm that focuses exclusively on the RFP process on behalf of small and medium-sized nonprofit boards. Maurice Harary started the company with his business partner in 2017, drawing from a background in business and procurement to put together a team of experts to help boards in the quest for new vendors, con- tracts, and services. Bids, Adieu All of this may beg the question: does every contract or project need to be bid out? According to Richard Brooks, a part- ner at the law firm of Marcus, Errico, Em- mer, & Brooks in Braintree, Massachusetts, the short answer is no – at least not legally speaking. He says it's really more an ex- ercise in common sense. Small jobs don't merit taking the time and effort to solicit multiple bids, and in an emergency situa- tion, obtaining bids just isn't practical. Cutolo agrees, though he does add that “While the body of law does not address the competitive bidding of contractor ven- dors, it’s my opinion that the best practice for communities depends on the circum- stances. As a general practice, it is wise to solicit multiple bids when the board is seeking to contract with a vendor. “However, where a project is emergent, it is not always reasonable to solicit bids,” he says. “Due to the time sensitive nature of emergent projects, such as remediating water intrusion, it may be necessary for the association to enter into a contract im- mediately. To ensure the health, safety and welfare of the community, the association may not have the time to solicit numerous bids.” Brooks adds that when it comes to longer-term contractual relationships like with a manager or an attorney, “There’s no reason to go out to bid unless things aren’t going well.” In fact, those relationships benefit from their longevity, where insti- tutional knowledge, personal comfort, and familiarity with the property have value that likely outweigh saving a few bucks by switching to a different provider. Ultimately, the process of bidding out projects on behalf of a community is just another part of a board's duties to their constituents. Understanding the basics, maintaining checks and balances, and knowing when to ask questions will go a long way toward keeping the process fair and legal. n Darcey Gerstein is an Associate Editor and Staff Writer for The New Jersey Cooperator.