Publication Date: Autumn 1997

CNYC's annual Cooperative Housing Conference, held each autumn on a Sunday, is New York's most comprehensive source of cooperative and condominium information and education. With product exhibits to visit from early in the morning, a video theater showing Co-op Roundtable throughout the day, and dozens of workshops and seminars, the Conference brings together hundreds of CNYC members for a day of learning and sharing Reviewed below is a presentation from the 16th annual Cooperative Housing Conference.

MAKING YOUR
NEXT CAPITAL IMPROVEMENT
A SUCCESS

When embarking on a major capital improvement project for your cooperative or condominium, it always helps to know who the players are, what parts they play, and, most importantly, how to go about directing them. Without strong, decisive guidance, projects can easily veer off course -- and the building often suffers.

According to Keith Skilling, a construction manager who addressed CNYC's 16th annual Conference, the number of parties involved in a project will increase with the complexity of the work. If a unit owner wants to redo his floors, he'd most likely go straight to a contractor. However, if the board wants to redo the lobby, the cast of players increases. Participants can include a board member or committee designated to oversee the project, perhaps a construction manager to keep the job flowing smoothly, an architect, engineer or designer, and the contractor. And, if things go wrong, the players may also include an attorney.

COORDINATING THE PROJECT
The board's first responsibility is to decide what the building needs and how much the corporation or association can afford to pay. Ideally, the board should first appoint a committee or individual to investigate the problem -- whether it be the roof, the boiler or anything in between. The designated project coordinator will oversee each phase of the job, making sure there are enough resources -- money and time -- for it to be completed. They will also make sure the project has enough support within the building to proceed as planned. If there's a very vocal opposition to your lobby design plan, make sure the differences are resolved before you begin incurring designer and contractor costs.

The coordinator should also understand that, while professionals and contractors each have their specific responsibilities, overall responsibility for the project falls on the cooperative or condominium. For example, contractors are responsible for complying with City code when they do the work. However, if they don't, it's the building that receives the violation and fine.

In orchestrating the project, says Mr. Skilling, the coordinator must take into account the limitations of each player. Contractors, for instance, are only concerned with getting the job done quickly. They don't often care about things like building security and quality of life, he notes. Meanwhile, residents are mostly concerned with quality of life, which generally translates as minimizing inconvenience. They might not care if a window contractor can't get into the apartment at a designated time. But if contractors cannot gain timely access, it could result in extra costs. It is therefore the coordinator's responsibility to make sure everyone's needs are met.

In larger or more complex projects, some buildings avoid this time-consuming problem by hiring a professional construction manager. The manager's job is to act on behalf of the board, solving problems and reporting on progress, says Mr. Skilling.

THE ARCHITECT OR ENGINEER
As soon as the board decides it needs to undertake a project, it should hire an architect, engineer, or interior/ exterior designer to create a design. This will often include drawings and written specifications for the project. In choosing professionals, the board should look for a firm that fits the project, says Mr. Skilling. Some firms have a solid track record in lobby and hallway design, while others have done a greater number of exterior projects. Seek out recommendations from your building's managing agent and neighboring buildings that have completed similar projects, and consult CNYC for referrals, as well.

The architect/engineer is responsible for making sure the design complies with local code and regulations, and that the finished product will perform as intended. This second element is known as the "implied warranty". For example, if the design of a roof deck causes the roof to leak, you can go back to the architect to collect damages.

Architects, engineers and designers generally work on an hourly basis -- so costs can skyrocket if you don't plan properly. Having reasonably complete vision of what you want before you call the designer will help prevent completely reworking your design after the professional has complied with your original request. "Being decisive will save you money," Mr. Skilling says.

SELECTING CONTRACTORS
Once you have a design and written specifications for the job, you can go ahead and bid the project out to contractors. As a rule of thumb, it is best to obtain bids from at least three contractors to get a realistic range of prices. To avoid potential conflicts of interest or collusion, request that bids be sealed and sent to a reliable, impartial individual, and make sure they're opened in the presence of the board of directors.

When you have selected a contractor, the next step is to hammer out a contract. One important element of any contract is the schedule of completion. You don't want the contractor hanging around the building forever. Similarly, you don't want the contractor to delay the start date of the project, says Mr. Skilling. "If you have chosen the low bidder, he may try to start the job when it fits his schedule. That's not acceptable," he says.

To avoid this, the board needs to send the contractor a "notice to proceed", instructing the contractor that he has 10 days from the receipt of the notice to begin work. This is generally sent after the contract has been signed. If the contractor does not comply with the notice to proceed, it may be considered a breach of contract. In such a case, Mr. Skilling advises handing the matter over to your building's attorney.

MANAGING THE PROJECT
One overriding principle in managing any improvement project is never to make a final payment until you are satisfied with the job. The smart way to proceed is to withhold a substantial portion of the money -- a third or a quarter -- until you or your designer has signed off on the job.

Here's how it works: Towards the end of the project, the contractor will inform you that the work has been "substantially completed" -- meaning that the goal has been accomplished in the contractor's estimation. At this point, you or your architect/engineer should walk through the project and make a punchlist of items that need to be completed. When you are completely satisfied that these items have been addressed, release the final payment. If you pay the contractor before this punchlist has been taken care of, "you'll never see the contractor again," says Mr. Skilling.

The most important piece of advice for any board member or committee overseeing a project is to establish yourself as a leader. Designers may take pride in their work, and contractors may want to earn their money, but ultimately you are the ones who have to live in your building. Notes Mr. Skilling: "If you don't display leadership, if you don't show all the people involved that you know exactly what you want, you're never going to like what you get."