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Triangle of Habitability

About seven years ago my longtime friend Jack came to me with a dilemma. “My wife wants to buy a co-op apartment,” he said. “She thinks it’s a good investment.” It sounded fine to me until Jack added: “There’s one hitch. The owner doesn’t live in the apartment. He’s got a renter in there.”

Uh-oh, I thought, and immediately said, “Forget it! It will end up being a hassle for you. You’ll be her landlord.”But Jack didn’t listen to me or to his lawyer, who also warned him off the deal. At his wife’s insistence, he bought the apartment. Since then, my poor friend lost lots of money, time, and (rapidly graying) hair as he dealt with the tenant and the managing agent and the board.

Boards don’t often look at the owner/investor side of issues. Perhaps they should, however, since investors like my friend Jack share the board’s interest in keeping the apartment (and the building in which it sits) in good shape. This is especially true in times of crisis.

And Jack had a crisis on his hands: his tenant turned out to be a hoarder. After buying the unit, Jack started getting vaguely threatening letters from the board, as well as more overtly menacing phone calls from the manager, who hinted at the terrible trouble Jack would be in if he didn’t handle the hoarder.

Perhaps it’s time for boards to rethink their strategies and try to work with the owners of rentals. In Jack’s case, he sat down with the manager and said, “We’re on the same side. What can we do to deal with this situation?”

Attorney Rachael Ratner thinks this is a good first step. “Acknowledging that there’s a problem and acknowledging that he’s responsible for it is a good prelude to constructively resolve the issue amicably, without litigation,” says Ratner, a partner at Schwartz Sladkus Reich Greenberg Atlas.

Attorney Tara Snow, a partner at Novitt, Sahr & Snow, says that the board should be very clear about what it expects. Do they just want the apartment cleaned up or do they want the hoarder out? “Maybe that’s the miscommunication,” she says. “He thinks they want it cleaned.” Snow adds: “If we do have a common goal, we would assist them. But at the same time, we would really need to be seeing that the shareholder is putting all their efforts into it; that they’re not stalling.”

And if the subtenant ultimately doesn’t comply, says Ratner, the owner must take legal action, threatening to evict her if she doesn’t comply. “If the owner doesn’t react, then the board must be poised to step in,” she says.

In short, partnering with your investors may resolve this issue – but be ready with a club if the honey doesn’t work.



Say goodnight, Jim: I answered the phone and heard a familiar voice. “Dry ice,” he said. There was a smile in my voice as I replied, “In what context, Jim?” He said: “I read your column about your rat problem. This is a way to get rid of them. You put dry ice in the holes where they come and go.”

I had never heard of such a solution, nor had my super, but I was willing to give it a shot because of its source, Jim Samson, attorney-at-law, the man with the unorthodox mind. In fact, over the years, I would often get calls from readers with legal questions, sponsor issues, refinancing woes – whatever – and I’d usually suggest some of the excellent attorneys out there. But if it sounded like my caller needed some unconventional wisdom, there was only a handful of attorneys I’d recommend, and one of them was Jim Samson.

Jim’s been practicing co-op law since before the big boom of the 1980s, but now he’s closing up shop and retiring. This crazy world of co-op and condo living just got a little smaller. Goodbye, Jim, and good luck!

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