You’ve worked hard for this, and now, at last, you are in the finishing stages of closing on your new co-op or condo apartment. If you have purchased a resale, renovations are likely on your mind. Before any upgrades are to commence, an alteration agreement must be prepared, submitted and approved.
We help you understand the process and provide helpful tips to help expedite.
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What is an alteration agreement?
Shared buildings such as co-ops and condos require what’s called an alteration agreement before any work can begin. It’s understandable that you’d like to start work immediately, but it’s highly unusual and almost impossible to get a board to agree on renovations before the sale has closed.
Why would that be? Because you’re not a shareholder (co-op) or owner (condo), not yet anyway. Making nonstandard requests like this could jeopardize your board interview. Also, any drastic changes to a unit could cause problems for other tenants.
The alteration agreement allows the board to review your planned renovations and put certain restrictions on when, how and what you can do. When you have closed on the unit, you can schedule a meeting with the board to discuss the terms of the agreement and the renovations themselves.
What goes into the alteration agreement?
Buildings have a general alteration agreement that has already been prepared by their attorney. This can be edited as needed for each project though, of course, the board would have to approve such changes. Every alterations agreement should, at a minimum, include the following.
The person performing the alteration agrees to indemnify the building and its shareholders/owners from any claims that may arise from the renovation.
A deposit will need to be made to the board to cover any potential problems that require the services of an architect or engineer. The deposit ensures that the resident can pay back the charge for this immediately.
Certificate of insurance (COI)
There will be a certificate of insurance coverage minimum that any contractors hired for the project will need to cover. How high this will depend on the building and the size of the project.
Due to the inconvenience for other tenants, there are restrictions on when work can be done. A good benchmark would be limiting noisy work from 10 am to 4:30 pm, non-noisy work from 8:30 am to 5:00 pm and on weekends only.
If work is expected to least six months that would not be fair on other residents. Most agreements limit construction time to 120 calendar days with high charges for each day you exceed the limit. You may be able to ask for an extension, but it will have first to pass board approval.
Right to Stop
If the board has reason to suspect that something may be amiss, they will have the power to stop the work at any time without incurring any liability.
Gas Line No-touch Policy
Gas lines cannot be moved without first the gas being shut down. If a leak is found, it must be kept shut down until it is located and repaired, this impacts every other resident. As such, expect the agreement to have a gas line no-touch policy.
‘Wet over Dry’ Renovations
Expect to see probation on moving or expanding wet areas like bathrooms and kitchens over dry areas like bedrooms or living rooms.
Future Maintenance and Repair Obligations
Both the resident and any prospective owners must be liable for any repairs or maintenance if necessary.
Guidelines on Hazardous Material Removal
Specific instructions will state how any dangerous materials such as lead paint and asbestos can be removed.
Conformance to Plans
The finished project must match the approved plans and blueprints.