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L & Tea Time with Michelle: Episode 5

Topic: Rent Impairing Violations
Guest: Aida Gashi, Managing Co-ops vs. Apts.

MMI: Welcome to Landlords TV, a production of LandlordsNY. This is L & Tea time with Michelle, the show where you get to have a cup of tea with me, Michelle Maratto Itkowitz and we talk about an area that I have being practicing law in in New York City for over 20 years, and that is real estate. And today I am honored to have LandlordsNY member Aida Gashi, who is a property manager at R.E.M. Residential.

A: Michelle, thank you for having me. I am honored to be here.

MMI: Thank you for being here. So, I deal with a lot of people who say they "grew up in real estate". But, you literally, really grew up in real estate, because your father was a resident manager of a luxury condo on the Upper East Side.

A: Yes.

MMI: So, from your earliest days, you remember him on site just dealing with all kinds of property management problems.

A: Yeah, we moved in to that building when I was 7 years old as they were still building it. So, he was resident manager, and he was superintendent, and he was construction manager and all that. And from the age of 7, you know, I saw what he was going through. I have seen my father go through, you know, because it was a luxury condo, you had the shareholders, and board meetings , and dealing with different owners, dealing with contractors, dealing with his property manager And now, I am a property manager.

MMI: Did you think that was going to happen, by the way? Did you say that I am going to grow up and be a property manager?

A: Never, never. I studied Political Science and English in school. Those two have definitely helped me in real estate, but I’ve never imagined that I’d be working in real estate.

MMI: And before R.E.M, I think this is very interesting, you were at the Department of Housing Preservation and Development (HPD).

A: Yes.

MMI: I don’t know if have met anybody who…

A: Well, I wasn’t… People usually think of HPD and city agencies as like, your know, they are a bane of their existence. I worked as a research assistant. So, what we did is we studied the effects of affordable housing on families, so it was a little bit different. So, I wasn’t one of those clerks behind the counter.

MMI: No, I understand perfectly.

A: But I learned a lot. That also helped me a great deal, now, in my transition to property management.

MMI: So, I read a very interesting blog post that you wrote. It was really excellent. You were talking about you, and your friends, other property managers having a drink and it got to be this whole conversation, those who manage co-ops versus those who manage rent-stabilized units and who has it harder. One set has board meeting, one set has paperwork. Very interesting. Where do you come down on that?

A: Yeah, that was an article every month i write for the Mann Report, real estate publication, and that month I decided to do an article on the pros and cons of co-op and condo management versus rental. I do rental, and a lot of my friends in the industry, and you know, just personal friends, they do co-ops and condos, and they always complain about board meetings. It took us so long, Michelle, just to even get a date when all of us could get together, because most of them have board meetings at night.

MMI: At night. Right.

A: Exactly! Whereas, granted in a property management even if you are doing rentals is not a 9 to 5 job. You are married to your phone; you are always on call no matter what. But it was really, really interesting. The article is interesting, and the discussion was interesting. They were saying: “Oh, we have to listen to our shareholders talk about their dogs and summer camp", and so on and so forth. And I am like, ok, but I have to listen to Ms. you know, so and so complain about her leaky faucet, or you know, the superintendent did not, you know, come on demand. They are two different animals, but essentially, it is the same thing. You are still dealing…you have to have people skills. You have your landlords who are your clients for property manager that does rentals, but if you are doing the co-ops and condos your, hmm, your clients…

MMI: Your clients too.

A: Right.

MMI: Actually, that was another interesting conversation we had off camera that I’d like to ask you about. You were talking about the phenomena of the first time homeowner/ shareholder, someone who is just bought their first co-op and, you know, what they are like to deal with. How they are a sort of hybrid between shareholder and tenant.

A: We manage a condo in Green Avenue in Brooklyn, and it is up-and-coming neighborhood, great area and a lot of the buyers, owners there are first time owners. They probably, you know, just got married, they were renting in Williamsburg up until now, and now that transition from -a renter where you know, you pick up the phone and you call up to complain to the superintendent or, you know, the property manager, to - it’s my responsibility, like I have to pay if kitchen tile breaks, for example. So, a lot of them, they are not too familiar with the, you know, they have to read that offering guide very carefully, but we are always there to help them.

MMI: I see that in my practice a lot, because sometimes people don't understand that shareholder has skin to skin within the walls, but then, if you go a little bit into the pipe, then it’s really a building. So, how much is education unofficially or officially part of your job as a property manager.

A: It is a big part. It is a big part. At R.E.M. one of the big things that our boss Rick Elezi emphasizes is education. Every single week we go to NYARM seminars. We go to RSA seminars, CHIP, he provides, you know, education for us, if we want register after work for, you know, any continuing education courses in real estate and property management.

MMI: It is excellent.

A: Yes, it is really, really good. And, it comes in handy. It also gives you up the upper edge if a tenant or even an owner, meaning co-op or condo shareholder is disputing something, if you know your facts and if you know what you're talking about, and of course the way you say it, too, can give you a great deal of leverage.

MMI: Very interesting. Here is a question for you. What is it like being a woman in a male dominated field? Most property managers, I think, if we look at it statistically are men.

A: Now, that is interesting, because like I said, every month I write for the Mann Report, and there is always… the hardest part for me isn't the actual writing, it is coming up with a topic to discuss, to write about that hasn't been discussed yet. And we did a brainstorming session at work a few months ago about one of the articles, and then a lot of the girls, because in my company where I work we are mostly female.

MMI: Interesting.

A: Yes, we are mostly female, and one of the girls said, “why don’t we do an article on women in property management?”. And then my boss Rick, and his wife Shpresa they were like-No, this make no sense!

MMI: I did not plan this question. I just want the audience to know that it was your curve ball question. Very interesting.

A: Yeah. And, they were like-it does not make any sense, and we were like-why not? Because I thought too as of male dominated industry, but in fact it is not. I was surprised. Many, many, many…

MMI: But, when you go to RSA, CHIP all these things, when you attend a function it is a lot of men.

A: That is what I thought.

MMI: So, property management you're saying has an equal number of women?

A: Yes.

MMI: Very interesting.

A: And my boss’s wife Shpresa, she has a very interesting take on it, although it may be politically incorrect it is still very interesting. She thinks that women make better property managers.

MMI: I don’t think it is. It makes a lot of sense.

A: And I asked her, “why is that?” And she said, “Women are always looking, look at the marriage”. She goes: “you are a property manager; you are married to your landlord, to your client, right? I said-ok. She goes:” A husband and wife in a marriage, the wife is the one that looks: to use coupons, looks to cut bills, she looks for the things on sale. The man does not care. She goes: “Female property managers are always looking for the cheapest way, the easiest way, the smoothest way to do things. Whereas man have may be…

MMI: The smoothest way, the path of least resistance is sometimes the best and most efficient and cheapest and best for the client.

A: Yes.

MMI: This is a great conversation, and we can go all day. Can you hang out for two seconds while we do the teaching portion?

A: I’d love to.

MMI: All right, so on to the teaching portion. We’ll be right back.

Teaching Segment

MMI: Ok. So, today we are talking about rent-impairing violations. So, we all know that the Department of Housing Preservation and Development (HPD) issues violations against the building, if it comes and if it finds this wrong. Those violations are categorized. So, they have numbers, and a number means a certain type of violation. For instance a 507 is: repair the roof so that it no longer leaks. So, each violation gets a category number. Now, pursuant to Multiple Dwelling Law 302 (a), HPD is allowed to designate certain of those categories as “Rent-impairing” – rent-impairing violations. So, what is the significance of this? The significance is that if a violation that is rent impairing is of record, and properly served to the owner on record at that time with HPD, six months later if that violation is still there, then the landlord is not allowed to recover rent from the tenant. So now, let’s take a minute here. I just said-rent impairing violation, more than six months of record, landlord can’t recover rent from the tenant. Now I want to clarify, if the tenant.., that does not mean that the tenant doesn’t owe the rent. If the tenant is paying the rent, the landlord can take it, the tenant can’t sue the landlord to get the rent back. But what the landlord can’t do is they can’t “recover” the rent, they can’t sue the tenant for the rent. And this is the statute’s way of making sure that people correct their rent-impairing violations. So, you know, it is a pretty serious situation and it can be even a little bit more serious in a sense that the statute says that a violation that is in a common area of a building, is against every apartment. So, if you have a rent-impairing violation for more than six months in a common area, it is theoretically possible that the whole building could say, “Hey, you know, we are not going to pay the rent.” But, let’s walk it back a little. There are a few exceptions and things you should know. For one thing, in order to raise this defense, the statute also says; this is not just like any other defense in Housing Court. In order to raise the rent-impairing violation defense a tenant is required to deposit the whole amount of rent that they are being sued for with a Clerk of the Civil Court. So, it is like a cushion built in. Also a tenant can’t raise the 302(a) rent-impairing violation defense if they’ve caused the violation, or if they are not allowing the landlord to come in to fix the violation. So, how do you know if you have a rent-impairing violation? You look on HPD and see what your violations are, and the list of rent-impairing violations, because it gets updated periodically, you should check it. You are going to go on a nyc.gov, and to the rules of the City of New York, or you can just really google list of rent-impairing violations, and you are going to get it. Then compare your violations’ numbers to those violations, and see if they have being there for six months or more. Where I see this come up is a building that hasnt been purchased recently and also hasn't been refinanced recently, or may be there hasn't been any program or subsidy that landlord has submitted themselves to where violations matter. The point is if you haven't checked your violations in a while, if you had a tenant who has been calling 311 and may be HPD has been in there-check your violations. Everybody wants a violation free building, but in particular you want those rent-impairing violations, you do not want them to hang around.

A: Michelle, that was really interesting, the point that you’ve made about the rent-impairing violations, because I deal with professional tenants all the time. So, that was definitely, definitely informative.

MMI: Thank you very much. And you know what? This has been a great show. Do you think you could may be come back in a future at some point and give us some more tips.

A: I thought you would never ask. Thank you.

MMI: Thank you very much. Ok, so you are watching landlords TV, a production of LandlordsNY. And you have being watching L & T time with Michelle.

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