Page 13 - The NY Cooperator August 2019

COOPERATOR.COM THE COOPERATOR —AUGUST 2019 13 Make the Right Mortgage Choice. $170,000 Brooklyn, NY Residential Underlying Co-Op $300,000 New York, NY Residential Underlying Co-Op/Retail $250,000 Brooklyn, NY Residential Underlying Co-Op 220 RXR Plaza, Uniondale, NY 11556 • www.FlushingBank.com Patrick Akosah 718.512.2798 MLO #674966 Patrick Dolan 718.512.2817 MLO #1016524 Cindy Lam 718.512.2816 MLO #410081 Daniel Lee 718.593.8067 MLO #64756 Anthony Montalbano 718.512.2731 MLO #1180405 Christopher O’Hara 718.512.2809 MLO #673112 Michael Pollis 718.512.2911 MLO #1703994 Community lending expertise with personal service. At Flushing Bank, we are focused on exceeding your goals. Composed of experienced lenders with local market knowledge, Flushing Bank’s Real Estate Lending team is ready to help you with your real estate mortgage solution. As a leader in community lending, we provide competitive rates, including long-term, fixed-rate loan programs. Call us today to discuss a mortgage solution that is right for you. Flushing Bank is a registered trademark FB 952 - RMU Cooperator UPDATE.indd 1 12/13/18 11:13 AM and because of this will sometimes send back or bribe are rarely as convenient as to work with vendors who are provid- friends to bid on projects. I once mistak- enly received a quote that was meant for lines their pockets.’ The cost usually ends competition is stalled, which also leads form, which states that they will not re- a board president, and which included a up being shouldered by the community’s to higher pricing and a non-competitive ceive any monies or compensation for any promise of profit. The individual was im- mediately removed from the board, and thing shady was ever happening. no work was done with that company. But it’s a very tricky field, as there are so many lead different people involved in these projects quences both clear and decisions.” The penalties associated with being Mark B. Levine, caught engaging in a kickback scheme a principal with can be steep. “Managers could lose their property manage- licenses, and directors or officers could ment firm EBMG, be subject to litigation for doing so,” says LLC, which has Gregory W. McCracken, a partner at the offices in Long law firm of Jacobs, Walker, Rice & Barry Island, Brooklyn, in Manchester, Connecticut. “Statutes and covering community association manag- ers prohibit any act or conduct that con- stitutes dishonest, fraudulent or improper viding money to dealings. Directors and officers must someone similarly act in good faith in a way they reasonably believe to be in the best inter- ests of the association. Kickbacks would dered, the price clearly run afoul of these requirements.” Paying the Cost The consequences of accepting a kick- ‘the job gets done well, and somebody ing kickbacks, the field is narrowed and boards are also now required to sign a residents, who were unaware that any- “Kickbacks have a few issues that can as future expenses and problems down from either a contractor or the board to conse- and hidden,” says Manhattan. “Because of their nature in pro- other than a contractor for services ren- for those services will be driven up to cover the extra ex- pense. In addition, if you’re only willing marketplace. This can lead to an inferior work done at their building.” company performing the service, as well the line.” Combat and Consequences Fo r t u n at e l y, there are ways that ethical residents, board members, and managers at a residential property can work to ensure that their commu- nity remains kick- back-free. “I do my best to look for signs that something doesn’t seem right, and al- ways use outside companies that are not associated with the board or anyone else involved with the building,” says But- tafucco. “To avoid conflicts of interest, “To reduce the chance of influence members and managers themselves, transparency should be sought during a bidding process for large capital projects,” adds Reilly. “Sealed submissions of bids are recommended, and having bid open- ings with multiple witnesses is encour- aged. Similarly, vendors should not be told what number to come in at to get a job.” When hiring contractors, a board or manager can do their due diligence by making it known that not only will they not solicit kickbacks, but they’ll be vigilant against even the perception of sketchiness. “Decades ago when I first started working, we were on a job, and I was with Glenn Kuffel, the owner of the company at the time,” recalls Alex Kuffel, President “Kickback or bribery schemes oft en arise when a contractor or other service provider wants to gain access to or maintain a relationship with a building or community association.” — Michael T. Reilly continued on page 17