Concern over window case fallout.

Who will take the rap when there is a violation of city codes that calls for criminal penalties? The co-op community is scrambling to protect itself now that they have realized criminal penalties are part of the package that both boards members and managing agents could face.

That should come as no surprise, of course, to the sponsors of the cooperatives, nor to the other more than 25,000 owners of multi-family apartment buildings who deal with city inspectors on a regular basis.

But for the tenants who turned shareholders, and now often struggle to share tasks or must coerce other resident volunteers to hold positions on the board, the specter of possibly facing criminal records, fines and even jail sentences if something goes wrong is not quite what they had in mind for their resumes.

Neil Davidowitz, a former district attorney who is now vice president of Orsid Management, says he is pouring through New York City code books to see what violations could produce criminal punishment for the boards.

Cooperative attorney Stuart M. Saft, a partner with Wolf Haldenstein Adler Freeman & Herz, is alerting his clients to the issues. He is also drafting state legislation designed to protect volunteer housing boards and modeled on recent Federal legislation that lets not-for-profit board members off the hook, so king as they don't commit fraudulent acts themselves.

And other industry groups are resurrecting the fight to have managing agents licensed by the state.

The concerns were prompted by a legal case based on the city's window guard law that the experts believe could have a chilling effect on the membership of the city's cooperative and condominium housing boards.

Members of a Brooklyn co-op board were left facing such criminal penalties when the judge agreed with the city's corporation counsel that they could be held personally liable.

The stance was taken after a child died in a window fall, triggering a later Health Department inspection of apartments and a finding that there were missing and improperly installed window guards.

Brooklyn Supreme Court Judge Kathryn Smith declined to dismiss the criminal penalties against three members of the board, which the prosecuting attorney insisted must be part of any plea bargain.

Thus, after the judge's refusal to dismiss the complaint, along with the cooperative corporation paying a fine and pleading to a misdemeanor, the city's Assistant Corporation Counsel Louise Moed wanted at least one member of the board of directors to plead guilty to a violation in order to settle the case.

She said a violation "is less than a crime. We were not looking for a human being to have a criminal record." Violations are typical pleas for non-compliance with many city housing code issues. But there are plenty of laws that, as Davidowitz is finding, include criminal penalties.

That doesn't sit well with the cooperative community, because a criminal record could be exactly what is offered in another case.

In the window fall case against Premier House, the statute of limitations had run out on charging the managing agent in place at the time of the accident. But he has now come forward and pied guilty to the violation, and a fine of $2,050 has been imposed. That individual, Efrain Lopez, could not be reached for comment, but a board member confirmed he is no longer employed by the building.

The cooperative corporation itself has also pled guilty to a misdemeanor. A fine of $18,000 was imposed, $2,000 for each of the nine counts.

Volunteer and License Issues

The case is causing numerous discussions within the real estate industry, as Moed wanted the imposition of criminal penalties under the theory of strict liability.

According to the court decision, "this permits the finding of liability as to any individual who is responsible for the premises where such code violations are alleged to have occurred, without regard to any culpable mental state."

The court rejected the board's defense that they could not legally be held personally liable for the criminal violations of a cooperative corporation or its agent or employee, and therefore, this case has implications for volunteer boards and managers of property.

Moed told the court, "The management of a 185-unit multiple dwelling is not for amateurs, and it's offensive for the defendants to put forth the proposition that their positions on the Board of Directors were merely honorary and entailed no responsibility for the health and safety of the building's occupants."

The president of the New York Association of Realty Managers (NYARM), Leonard Jones, agreed. "A cooperative should have a well-trained individual handling their day-to-day business," he insisted. "I know of no board member that will follow-up on a window guard installation or the inspection of an elevator, or anything else. Even the self-managed buildings hire a managing agent."

Still, of the three members of the board that were facing criminal penalties and were listed on the multiple dwelling registration, one was a member of the family that sponsored the conversion of the building, and the other an employee, which is one reason Moed dismissed the idea here of the "volunteer" board.

The actual Health Department inspection was conducted after a boy fell to his death from a window in a master bedroom where the guard was later found to be improperly installed. According to court records, Health Department inspectors came into the building three weeks after the June 1994 accident and were only able to gain entry to nine of the 185 apartments.

Window Guards Required

The public records show the window guards in those units were improperly installed or missing. At the insistence of unit residents, no window guards were installed where windows opened to terraces, explained Solomon Rokowsky, treasurer of the board, who was one of the original sponsors of the building but was not named as a defendant.

The window guard law exempts only one window that leads to a fire escape, and one window of any first floor apartment.

Rokowsky believes that if the case had gone to trial, there still would have been a question as to whether it was the shareholder who owned and resided in the unit, or the cooperative corporation, that would have been responsible for the window guards.

But a Department of Health booklet on window guards, in a section that will be included when regulations are re-drafted, states "your cooperative management - not you - must have them installed and must have them fixed if they need repairs."

The booklet also says that while some condominium managers also install window guards, it is condominium unit owners that are responsible for the windows in their unit, while the management is responsible for the hallways.

The Health Inspector's notes show, and Rokowsky confirmed, that the child fell from a master bedroom window. Despite a mandate that window falls by children 16 years of age or younger be reported within 24-hours by the hospital or precinct, the fall was apparently not reported by Kings County Hospital to the Health Department until three weeks later, and they sent out an inspector the following day.

Between the time of the accident and the inspection, the window was touched by numerous police officers and ambulance workers, as well as those who came to sit shiva in the apartment with the family, said Rokowsky.

By the time the inspector saw the window, two screws were missing from the guard and the window could be opened eight inches, rather than the 4.5 inches permissible for this kind of window. The narrow gap is to prevent a child's head from getting through the opening.

The Health Department issued code violations for the nine apartments they were able to enter and inspect. A year later, the corporation counsel's office brought charges against a managing agent and three members of the board.

The charges the board and cooperative corporation faced were based only on the inspector's report of defective window guards and not in conjunction with the child's death, insisted Rokowsky, as well as litigator Gerald Walpin of Rosenman & Colin, who defended the board in this action.

The child's family were shareholders and have already settled with the building's insurance company "for less than $100,000," said Rokowsky.

Lopez, the managing agent at the time of the accident, was hired directly by the board and was on their payroll. Because he was not listed on the multiple dwelling registration until several months after the accident, an earlier managing agent was cited. That complaint was later dismissed, but the statute of limitations had expired for a formal complaint against Lopez.

Walpin asserted Lopez's credentials were never an issue, nor was the building's compliance with the notice provisions of the window guard law.

Licensing

The Department of State Division of Licensing Services, however, told REW that no such person has a license to be either a real estate broker or a salesperson.

The expected holding of such a license by a managing agent has been one reason the Real Estate Board of New York (REBNY) has consistently opposed any efforts to pass a law requiring a separate managing agent license.

REBNY's President, Steven Spinola, said that anyone who collects rents must be licensed as a broker or salesperson. While he did not know what duties this managing agent was hired to perform at this building, Spinola said they are very concerned about this case and its implications.

Spinola said usually when criminal penalties are imposed, there is a finding of gross neglect, "which we are not sure was proved in this case."

Only motions to dismiss the complaint were heard by a judge, as the later plea arrangement was made.

A REBNY committee met last week to discuss the matter, along with the Council of New York Cooperatives (CNYC) proposal that volunteer boards be exempt from criminal prosecution.

"I don't know if we should just leave managing agents 'hanging'" said Spinola, of the CNYC proposal being authored by Salt and based on the Federal law exempting board members of not-for-profit corporations from such prosecution.

"We're going to seek a legislative remedy so a board discharging its responsibilities in good faith can't be held criminally responsible if something goes wrong," said Mary Ann Rothman, executive director of the CNYC. "I don't think that anyone who distributed window guard notices and complied timely to the window guard notice should be criminally liable."

The Associated Builders and Owners of Greater New York (ABO) has urged that all managing agents should be licensed.

Jerome Belson, president of ABO and his eponymous owner/management firm, says he doesn't understand why ali real estate organizations don't support this proposal.

"Our position is that if they license manicurists and taxi drivers, how dare they not license someone who has keys to every apartment, controls the finances involving hundreds of thousands of dollars and is responsible for the safety and security of all the families under his control," asserted Belson. "We urge the legislature actively to adopt the strongest licensing law possible."

Belson says the ABO proposal would grandfather a license to those who are accredited by any "nationally recognized" management education program, and would cover certifications granted by ABO as well as the Institute of Real Estate Management (IREM).

Even the locally powerful NYARM, which its president, Leonard Jones, says has a national affiliation, so its NYARM accredited agents would qualify under such a licensing law, supports the licensing of managers.

Jones, who is the property manager for Clinton Hill, says this incident points to a lack of training for this particular managing agent.

"If he was licensed, he would have had proper training on the inspection of window guards and how to supervise his staff," said Jones. "Part of what we do [during the NYARM accreditation course] is spend time on window guards, and those kinds of life safety regulations, and we certainly make ourselves available as to how to handle the procedure and the notifications."

Jones says he is also disturbed that the City of New York has not conducted more extensive and continuous training on the proper installation and upkeep of the window guards.

"We had to sit through a half-day city seminar on water closets," he recalled, "so why not do this with window guards?"

But Jones, like others in the industry, is worried about the possible criminal penalties being imposed on these volunteer building boards, many of which already have a difficult time finding members.

Davidowitz of Orsid Realty is also on the Board of Directors of the Association of Cooperative and Condominium Managers (ACCM). He says managers should have training and specific requirements as to what defines a managing agent and what he is required to do.

RELATED ARTICLE: Preventing window falls

Owners, agents and boards are not alone in their fight to get tenants and unit owners to sign and return the annual window guard notice, which includes a place to indicate if the guards need repair or maintenance. It also acts as notice to the owner that a child 10 or under resides in the apartment, so that window guards can be installed.

The notices can be attached to the January rent bill or delivered between January 1 and January 16, or within 30 days of a new occupancy that does not involve a written lease. New leases must have the window guard notice attached.

Many owners and boards have a difficult time getting residents to sign these forms. Those tenants with Housing Court or Division of Housing and Community Renewal (DHCR) cases and those that do not speak English are most fearful of signing any forms, lest they lose their rights to "something," perhaps even a rent reduction somewhere down the line.

If the notice is not returned by February 15, then the apartment is supposed to be inspected to ascertain if a child 10 or younger resides in the apartment, and if so, whether approved window guards are properly installed and maintained.

The Health Code requires that "the owner, lessee, agent or other person who manages or controls a multiple dwelling shall provide, install and maintain a window guard... on the windows of each apartment where a child or children ten (10) years of age and under reside, except that this section shall not apply to windows giving access to fire escapes or to a window on the first floor that is a required means of egress from the dwelling unit."

By March 1, if the owner "has been unable to ascertain the need or desire for window guards," they can write to the Window Falls Prevention Program, describing their efforts and requesting help.

Paula Savarese, project coordinator for Window Falls Prevention, will send follow-up letters to those tenants who do not return the forms, or who refuse to allow owners in to repair or inspect window guards. Last year she sent over 8,000 letters to tenants, which she says, usually helps the owners gain access.

Savarese also suggests that any new window guards being installed should be the taller four- or five-bar guards that eliminate the associated stops and the problems inherent in maintaining a space no larger than a 4.5 inches between the top of the guards and the bottom or the open window.

To prevent tampering and removal, the guards should also be installed with the one-way screws that come with the guards.

This year alone, out of 21 falls, three were fatalities, of which two were preventable. In 1996, there were 33 falls. Five were fatal and two of those were preventable.

By comparison, statistics collected before the window guard law was enacted in 1976, showed that in 1973 there were 192 falls and 32 deaths.

Managing agents, owners or boards who have questions, or who would like Savarese to make a presentation to their group, can call her at [phone].

For forms in English, Spanish, Chinese or Russian that can be reproduced by the owner; for lobby signs in English or Spanish; for window guard brochures that can be handed out to tenants; or for copies of the law, you can call a 24-hour automated line at [phone] and Savarese will process the request within a day or two.