Town Hall: Remote Control – Managing Meetings, Elections & Shareholder Anxiety during COVID

Kenneth R. Jacobs, Domenick J. Tammaro, Emanuela Lupu-Ferrante led a Cooperator Town Hall Event on October 6, 2020.

Overview

Countless co-op and condo communities postponed their annual meetings this past spring thanks to the pandemic. Not only do those meetings still need to be held, but arrears are higher, sales are slower, and it looks like we’re on our own to deal with the lagging economy and the threat of a second COVID wave this winter. How can boards adapt? In this webinar, legal pros will discuss the importance of holding virtual meetings and voting on community business, and how those tasks can be carried out safely and legally in this extremely difficult time. We’ll cover how to keep your board nomination, election, and tabulation process fair and transparent, as well as give tips on dealing with arrears, slower sales, and long-term capital planning during the long, slow recovery.

To watch the webinar on demand, visit Cooperator.com

This program was presented by The Cooperator New York.
Registration is required.

For more information contact:

Kenneth Jacobs
kjacobs@sbjlaw.com

Domenick Tammaro
dtammaro@sbjlaw.com

Emanuela Lupu-Ferrante
elupu@sbjlaw.com

Webinar: How to Effectively Conduct an Internal Investigation

On August 20th, Special Counsel, Nancy Durand gave a webinar “How to Effectively Conduct an Internal Investigation” where she will discuss strategies for investigating workplace misconduct and other allegations.

This webinar was hosted by The Knowledge Group.

For more information contact:
Nancy Durand
ndurand@sbjlaw.com

Webinar: Living in a COVID World – Confronting Real-Life Issues as Associations Reopen

Kenneth R. Jacobs, Domenick J. Tammaro, Emanuela Lupu-Ferrante led a Cooperator Town Hall Event on July 16, 2020.

Overview

Countless co-op and condo communities postponed their annual meetings this past spring thanks to the pandemic. Not only do those meetings still need to be held, but arrears are higher, sales are slower, and it looks like we’re on our own to deal with the lagging economy and the threat of a second COVID wave this winter. How can boards adapt? In this webinar, legal pros will discuss the importance of holding virtual meetings and voting on community business, and how those tasks can be carried out safely and legally in this extremely difficult time. We’ll cover how to keep your board nomination, election, and tabulation process fair and transparent, as well as give tips on dealing with arrears, slower sales, and long-term capital planning during the long, slow recovery.

To watch the webinar on demand, visit Cooperator.com

This program was presented by The Cooperator New York.
Registration is required.

For more information contact:

Kenneth Jacobs
kjacobs@sbjlaw.com

Domenick Tammaro
dtammaro@sbjlaw.com

Emanuela Lupu-Ferrante
elupu@sbjlaw.com

Webinar: Addressing Lien Law 3A claims in and out of Bankruptcy Court

Overview

Article 3A of the New York Lien Law sets up a system of trusts to make sure that construction moneys received by owners and contractors are applied to pay for the cost of the improvement. It also provides a mechanism for owners and subcontractors to claim diversion of funds against contractors who fail to apply those funds properly. Contractors face serious consequences for failing to use construction funds as the statute requires, including personal liability against the contractor’s principals. The statute applies to all construction projects, regardless of size and scope. Therefore, all owners and contractors need to understand what Lien Law Article 3A requires of contractors as “trustees”, what rights are afforded to owners and subcontractors, as “beneficiaries” under the statute, and what claims and defenses may be asserted in the context of a Lien Law 3A claim.

Review presentation materials here.

This program was presented by the Associated General Contractors of New York State.

For more information contact:
Jacob Amir
jamir@sbjlaw.com

Smith Buss & Jacobs Closes Historic Financing in the midst of the Pandemic

Co-Op City, New York’s largest affordable housing complex, will stay affordable for another 30 years pursuant to a March 31st, 2020 loan agreement between Co-op City and the City of New York.

The Agreement provides One Million Dollars ($1,000,000), at zero percent interest, with the principal forgiven, conditioned upon the Cooperative’s agreement to remain in the Mitchell-Lama program for the 30 year term of the loan.

Co-op City, which is embarking upon a $150,000,000 capital improvement program, will use the loan proceeds to improve accessibility for the disabled to its buildings.

The HPD loan is subordinate to a $621,500,00 first mortgage from Wells Fargo. Closing the transaction with the City of New York required the consent of Wells Fargo, approval from NYS HCR, and consents and subordination agreements from HUD, SONYMA and NYC HDC. In addition, special limited indemnifications were negotiated with First American Title Insurance to resolve unique risks created by the temporary cessation of various governmental recording functions related to building loan agreements and the indexing and entering of mechanic’s liens, judgments and notices of pendency. All of these issues were resolved remotely due to the COVID-19 situation.

“The ability of all parties to work together for the public good was amazing”, said Jeffrey D. Buss, Riverbay’s General Counsel and a partner at SBJ. Mr. Buss also closed Co-op City’s previous $621,500,000 first mortgage with Wells Fargo.

While the deal gives SBJ’s clients at Co-Op City more security about their future, many other cooperatives, condominiums and building owners face growing uncertainty about theirs. New York State’s moratorium on evictions until June 20th, as well as HUD’s anticipated announcement next week regarding federally insured mortgages, will provide some temporary relief to individuals. However, these temporary solutions will also create a loss of income to building owners and lenders, as well as increased debt for individuals without the ability to pay, creating a new set of problems in the near future. According to Buss, one of the key lessons from the Co-Op City transaction is that all parties are in this together. “Cooperatives, condominiums and building owners should engage in discussions now with both lenders and governmental officials”, said Buss. SBJ, which is functioning at full capacity with a fully remote work force, stands ready to assist in the recovery with creative legal solutions.

BREAKING NEWS CORONAVIRUS UPDATE

Empire State Development Corporation Issues Guidance On What Businesses Provide an “Essential Function” Under Executive Order 202.6, as Revised

Executive Order No. 202.6 directed that all businesses and non-profit entities are required to reduce their in-person workforce by 75%, and Governor Cuomo’s “New York State on PAUSE” Executive Order (the “PAUSE Order” will increase that reduction to 100% for all non-essential businesses, effective Sunday, March 22 at 8PM. The PAUSE Order will also impose restrictions and include guidance on social gatherings, use of public transportation and other social interaction.

Businesses that provide “essential services” are exempt from the workforce reduction. Executive Order 202.6 referred generally to certain business groups and directed the New York State Department of Economic Development a/k/a Empire State Development Corporation) (ESDC) to promulgate guidance on what constitutes an “essential service” exempting that business from the mandated workforce reduction.

The ESDC has now issued those revised guidelines (see attached). Included within the guidelines are industries affecting our clients, as follows:

Essential services to maintain the “safety, sanitation and essential operations of residences or other essential businesses” include:

  • law enforcement
  • fire prevention and response
  • building code enforcement
  • security
  • emergency management and response
  • building cleaners or janitors
  • general maintenance whether employed by the entity directly or a vendor
  • automotive repair
  • disinfection* [See Note 1 below]

Note 1: “Doormen”, which were deemed essential under the draft guidelines, have been removed. Buildings should decide the extent to which their doormen fulfill essential functions, such as security, janitorial, mail or package distribution.

Essential specific services include:

  • trash and recycling collection, processing and disposal
  • mail and shipping services
  • laundromats
  • building cleaning and maintenance
  • child care services
  • auto repair
  • warehouse/distribution and fulfillment
  • funeral homes, crematoriums and cemeteries
  • storage for essential businesses
  • animal shelters

Essential construction includes:

  • skilled trades such as electricians, plumbers
  • other related construction firms and professionals for essential infrastructure or for emergency repair and safety purposes

Essential financing institutions include:

  • banks
  • insurance
  • payroll
  • accounting
  • services related to financial markets

Any business not identified in the ESDC’s guidance as being an “essential” business or service may request designation from the ECDC. All businesses, whether essential or otherwise, are urged to maintain social distancing, proper health guidelines and adherence to separate restrictions imposed during this crisis.

We will keep all readers informed as we learn more.

BREAKING NEWS CORONAVIRUS UPDATE

Governor Cuomo Extends Lockdown on “Non-Essential”
Businesses to 100% of Employees

Governor Cuomo announced today that New York State would take a “pause,” requiring that 100% of employees of “non-essential businesses” cannot go to their place of employment. The “pause” included specific guidelines affecting persons over 70 and vulnerable persons under 70. We are awaiting the specific text of the Executive Order.

What are “Essential Businesses”?

For real estate purposes, the following are deemed “essential businesses”:

  • trash and recycling collection, processing and disposal
  • laundromats/dry cleaning
  • building cleaning and maintenance
    security
  • emergency management and response
  • building cleaners or janitors
  • disinfection
  • doormen

Construction including

  • skilled trades such as electricians, plumbers
  • other related construction firms and professionals for essential infrastructure or for emergency repair and safety purposes

The Empire State Development website includes a number that you can call if you wish to know whether your business is “essential.”

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Electronic Notarization Available.

Notaries will now be allowed to acknowledge scanned documents that have been send to them. If they do not know the person signing, they must see proof identification before they notarize. They must also receive an original of the signed document within thirty days.

We will keep all readers informed as we learn more.

BREAKING NEWS CORONAVIRUS UPDATE

Governor Cuomo Announces Executive Order Imposing
90-day Moratorium on Mortgage Payments and Mortgage Foreclosures

Governor Cuomo announced at a press conference this afternoon that he plans to order a 90-day moratorium on all mortgage payments and mortgage foreclosures. Mortgage payments will be suspended for three months based on financial hardship, and mortgage foreclosures will be deferred or postponed for the same period.

The deferred payments would not be forgiven; rather, they would be added at the back end of the loan.

Numerous questions arise, such as whether the suspension applies to both residential and commercial mortgages; whether it applies only to principal and interest, or also includes escrow and reserve payments whether it applies to cooperatives and condominiums or only to “lending institutions”; and how “financial hardship” would be determined.

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New York Landlords Can File For Evictions and Non-Payment
Despite Moratorium on Court Action.

Even though court proceedings for eviction and non-payment actions have been suspended, the statute of limitations for filing these proceedings has not been delayed. Therefore, landlord are continuing to file papers with the courts so as not to lose their rights. Co-ops, condos and other building owners need to decide whether to do the same.
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Local 32BJ and Realty Advisory Board reach “Memorandum of Understanding” Regarding Staff Reductions

Among other things, the MOU provides:

1) The 30-day notice for reductions in force or in hours is suspended as long as it relates to COVID-19. The union must be notified of any such reduction.

2) If an employee must self-monitor or self-quarantine due to a workplace exposure, the employer must pay the employee two (2) weeks “paid time off” without affecting the employee’s other “pto” benefits. Otherwise employees can use their “pto” benefits.

3) Employee termination rights are suspended for 60 days, and the rights of senior employees to replace junior employees in the event of a force reduction is suspended for 30 days.

We will keep all readers informed as we learn more.