Page 6 - CooperatorNews New York August 2021

6 COOPERATORNEWS — AUGUST 2021 COOPERATORNEWS.COM CooperatorNews.com From COOPERATORNEWS.COM Co-ops Now Exempt from Portions of Tenant Protection Act Advocates, Lawmakers Unite to Correct Problematic Language BY DARCEY GERSTEIN Co-op shareholders, board members, and their support professionals breathed a collective sigh of relief last month as the New York State legislature passed a bill ex- empting co-ops from certain provisions of the Housing Stability and Tenant Protection Act of 2019 (HSTPA). The HSTPA provides protections to rental tenants by limiting the monetary and le- gal actions landlords can take against them in certain circumstances. Geoffrey Mazel, a co-op and condo attorney with Hankin Mazel in New York and legal advisor to the Presidents Co-op & Condo Council (PCCC), which represents thousands of coopera- tive units in Queens and elsewhere, explains that co-ops were inadvertently included in the legislation by virtue of the language used in it. According to Mazel, like rental buildings, co-ops provide housing under leasehold agreements—but unlike rentals, cooperatives are owned and operated by their tenant- shareholders and do not make a profit. Because of this unique ownership structure, certain provisions of the HSTPA would actually harm the tenants of co-ops rather than protect them. Mazel explains: “When HSTPA came out this time two years ago, I sat down and read it, and realized the effects this would have on co-ops. There was a lot of opposi- tion. … Co-ops aren’t owned by an individual to make money; they’re owned, well, cooperatively. \\\[The PCCC and I\\\] took this up with Senator John Liu, and both he and \\\[Assemblymember\\\] Edward Braunstein didn’t realize that co-ops were not carved out. So it became a priority of ours, and even though it took a while with COVID last year and \\\[the backlog it produced this year\\\] I’m happy to say that it was smooth sailing in the Assembly, with unanimous passage. The Senate was a little bit harder, but it passed.” Among the protections that the new legislation affords co-ops, says Mazel, is the ability to hold money in escrow—to provide housing to a financially marginal pro- spective shareholder, for example—as well as the prerogative to obtain legal and late Water Sensors Join the Internet of Things New Tech May Improve Leak Detection & Lower Insurance Costs BY A J SIDRANSKY Water infiltration in multifamily buildings has always been an issue of grave concern; leaks and homeowners is enormous and growing rapidly.” can lead to everything from unsightly stains to mold growth to crumbling infrastructure, and can mean hundreds of thousands spent on repairs and replacements. But now, in the wake of water leakage before damage has occurred, rather than after—shifting the strategy from remedi- the devastating, deadly collapse of the Champlain Towers condo building in Surfside, Florida ation to prevention. CHUBB reports that many property owners have successfully deployed IoT at the end of June—thought to be caused by long-neglected water damage—the importance of sensors in residential buildings, private homes, hospitals, research labs, universities, libraries, detecting leaks-related deterioration in high- and mid-rise buildings before it leads to massive commercial properties, and even private wine cellars. The technology actively assists property loss of property—or even loss of life—has suddenly become a pressing issue for condominium owners to avoid costly and time-consuming repairs. and cooperative administrators. Along with thermal imaging, visual inspections, and other tried-and-true methods of iden- tifying and tracing leaks back to their origins, some new technology is adding another tool to fluctuations in temperature or humidity, they are typically configured to send 24/7, real-time the arsenal against water damage: water and dampness sensors accessed through the Internet alerts directly to an app on the smartphone of the facility manager or other point of contact, as of Things (IoT). What is the IoT? In short, the IoT refers to the network of physical objects embedded with sensors, software, correct a potential problem before it becomes a costly, disruptive repair. Some solutions can and other technologies that can connect and exchange data with other devices and systems over even automatically shut-off the main water line valve when a ‘flow-based’ detection system is the internet—and these days, it can (and does) include just about everything you can think of. “The IoT refers to networks of devices and sensors that can monitor, collect, and share data about just about anything, from a jogger’s heart rate, to air in car tires, to humidity levels in a ity from advisory to actionable,” Sarma continues. “For a pipe freeze condition, the facility wine cellar, to the condition of machinery and equipment in a factory, to a condominium boiler manager may get an advisory alert that the indoor temperature is dropping and is abnormally room,” says Hemant Sarma, senior vice president and head of Internet of Things for the insur- ance firm CHUBB Life. “The number of internet-connected devices and uses for businesses According to Sarma, IoT ‘smart’ tech is now being applied to monitor and alert users about How Does it Work? Sarma explains that “when a sensor detects the presence of any amount of water or minor well as the property owner or occupant of the unit. An intuitive dashboard pinpoints the exact location of the sensor and the reported issue, so the facility manager and property owner can installed.” The details are condition-specific. “Smartphone alerts are usually tiered according to sever- low, indicating that a heating system may have failed. If the temperature drops further—which continued on page 7 continued on page 12 fees from shareholders and to adjudicate both in one court. One compromise in the bill, notes Mazel, is the limit on late fees: a co-op can now charge a maximum of 8% of the arrearages. Landlords, per the HSTPA, may only collect $50, or 5% of what is owed—whichever is less. Legislators Announce Bill’s Passage Senator Liu and Assemblyman Braunstein, joined by Senator Toby Ann Stavistky (D - Queens) along with Mazel and the co-presidents of the PCCC, held a press confer- ence on Tuesday, June 15 in Bay Terrace, Queens to announce the legislation’s passage. “This legislation finally makes clear that tenant-shareholders in cooperatives are not subject to certain provisions of the Housing Stability and Tenant Protection Act,” said Liu. “Our community in northeast Queens has a large concentration of affordable cooperative housing, and this bill will ensure this form of homeownership remains within reach. Co-ops will no longer need to fear unintended consequences of the HST- PA, and those tenants in traditional landlord-tenant relationships can rest assured that the HSTPA reforms meant for renters remain fully in effect.” “This legislation properly takes into account the unique relationship that co-op boards and corporations have with their shareholders, which is vastly different from the typical landlord-tenant relationship,” added Braunstein. “Exempting cooperatives from these provisions will shield co-op owners from bearing the burden when fellow shareholders fail to meet their financial obligations.” According to Stavisky, “While working well to shield tenants from dishonest land- lords, the legislation inadvertently included co-ops, and serves as an example of un- intended consequences. The clarifying language in this bill will correct these issues. I applaud my colleagues in both the Senate and Assembly for their support.” Warren Schreiber, co-president of the PCCC said that “The passage of this legisla- tion makes it possible for co-ops, one of New York City’s last bastions of affordable middle-class housing, to remain affordable.” PCCC co-president Bob Friedrich, added, “The road to hell is paved with great intentions - and so was the original Housing Stability and Tenant Protection Act of 2019. Thankfully, the worst parts of this legislation have now been repealed. Probably the most onerous provision was the limit on security deposits to one month’s rent. This meant individuals seeking to move into a co-op who are retired, have limited income or borderline financials could not do so. An act meant to help them hurt them instead.