Gracious living is the hallmark of life at Wellington Tower Condominium. Luxuries like a round-the-clock doorman, concierge and parking valet, a skylit swimming pool, on-site maid services, dry cleaning and spa facilities provide residents “with the very essence of living well.”
Unless, that is, a resident falls from grace.
A few years ago it became obvious to the board of the East 82nd Street building that not everyone was contributing to Wellington Tower’s luxurious lifestyle. A few occupants—not many, but a few—were more than a little bit behind on their common charges. And although they weren’t paying for the kinds of comforts that smooth out life’s rough edges, they were still enjoying them. This didn’t seem right to the board. So they cut the delinquents off.
“We decided it really wasn’t fair to allow them to use the same amenities,” said board president Rebecca Sheinberg. “Other people in the building don’t want to be subsidizing people who aren’t paying.”
So now, the doormen won’t accept packages for residents who are more than a few months’ behind, and their key fobs no longer open the doors to the pool, the gym or the playroom.
“We haven’t gone to the extent as some other people, like cutting off the elevator,” noted Ms. Sheinberg, pausing for a moment of reflection. “Besides, the elevator is situated far from the front desk, so it would be too hard to enforce. And going to the extreme like that, it wouldn’t be beneficial to the other unit owners.”
Such tactics may make genteel Gold Coasters draw a disapproving breath, but they are being adopted by a growing number of buildings in New York. And for buildings that embrace medieval life in more than their “baronial living rooms,” there is even public shaming.
“Some buildings will put notices of who’s delinquent in the halls, the elevator, at the front desk,” co-op and condo board attorney Jeffrey Reich told The Observer. “What you might call Scarlet Letter techniques.”
Depriving guests of luxuries is increasingly popular with boards, Mr. Reich said, especially at condos. Co-ops are in a “first lien” position, meaning that they collect before the mortgage-holder. Not only do they get paid first, but banks will often pay a delinquent resident’s maintenance charges. Condo boards, on the other hand, get paid last and must either collect the scraps following foreclosure proceedings or win a money judgment against a delinquent tenant.
Moreover co-ops, unlike condos, did not engage in the amenities arms race of the early ’aughts that brought swimming pools and golf simulators, acres of shared terraces and media rooms rivaling movie theaters—felicities that can easily push maintenance costs above $1,000 a month, even for modest units (and unlike co-op charges, theirs don’t include the property tax bill). Also, resentment builds much faster when you see your deadbeat neighbors sunning themselves by the pool.
“If one or more shareholders aren’t paying, the cash requirements still have to be met,” said Eva Talel, an attorney at the law firm Strook & Strook & Lavan LLP, which advises hundreds of building boards and is the in-house counsel to REBNY. “It’s not just a matter of frustration—it can really become a matter of economic hardship, especially in smaller buildings.”
Restriction measures, Ms. Talel added, are not intended to be punitive—it’s just another means of getting the maintenance paid—but she admitted that they might feel that way.
“I haven’t heard of any fisticuffs on account of people having to go down to pick up their Chinese food,” Ms. Talel said. “But I expect that people are not happy when it happens. And that’s the idea.”
Fisticuffs no, but temper tantrums? Definitely.
“They create scenes,” sighed Midboro Management president Michael Wolfe. Midboro is careful to notify residents before they’re cut off, to eliminate surprises, Mr. Wolfe said, and publicizes the policy so that those with deactivated keycards will be less likely to rap at the doors with sob stories of mysterious demagnetizations. But still, there are scenes.
One of the on-site managers related to The Observer how one man last week became “very upset and screamed at the people in the pool to let him in: ‘I’m an owner here, how can you not let me in?’
“Usually, they’ll try to bluff their way out of it, but if it’s hot enough, they’ll come back with a check,” Mr. Wolfe quipped. “It is an effective tool. When the amenities are gone, certainly, life isn’t as pleasing as it might be. Also, it’s embarrassing.”
And what are the most “effective” amenities to cut-off?
“I think parking is the most painful, although I hate to use the word painful,” Mr. Wolfe struggled to find a softer word choice, finally settling on “the most motivating.”
Other management companies said that they have seen similarly promising results.
“People are angry, but sometimes things get resolved, or at least resolved quicker, when they don’t have access to the amenities,” explained David Wurtzel, the president of Cooper Square Realty.
And even the loss of small luxuries can be nettlesome. A resident of Chelsea condo Chadwin House who hadn’t paid his common charges for years and had a unit in foreclosure, pleaded with the judge to restore his doorman services if he started paying his monthly fees again, according to Robert Holland, a lawyer who represents the Chadwin House board.
“He was complaining that the doorman wouldn’t open the door for him or accept his food deliveries,” Mr. Holland said. The judge was sympathetic. The man started paying around $500 a month common charges, although, given that he still owes more than $40,000 to the board—a debt that remains unresolved—it’s hardly a fairy-tale ending.
Paul Brensilber, president of Jordan Cooper & Associates, the management company that oversees not only Wellington Tower, but a handful of other buildings that have taken a hard line on amenities, has mixed feelings about the practice.
“It’s never a good thing to have owners fighting against owners. It adds a lot of tension to the relationship between neighbors,” he said. “And while, from a sporting perspective, it’s interesting to watch, it puts the building staff in a bad position.
“If the goal is to get paid, I haven’t seen that yet,” Mr. Brensilber added. “But foreclosures take forever and a few shareholders can dramatically impact a condo’s budget. Other owners have to increase their common charges to make up for lost revenue. It’s ugly.”
Ugly is putting it mildly. At 95 Greene Street, a SoHo building that Mr. Brensilber also manages, celebrity photographer Kenneth Nahoum and his Victoria’s Secret model girlfriend, Basia Milewicz, stopped paying the common charges for the four penthouses they had amassed, units that accounted for some 20 percent of the building’s square footage and a good deal of its operating budget.
After phone calls, letters and liens failed to elicit any response from the couple, the building cut off elevator service to the penthouses (legal, since the building is only six stories) and removed their names from the door buzzer. At some point, Mr. Nahoum’s courtside seats at a Knicks game further fanned the flames. The board ultimately hung posters in the building with a photo of the couple at a Halloween party captioned “Why aren’t these ‘caped crusaders’ paying their common charges?”
“We didn’t have a lot of recourse. The legal system is extremely slow,” said board president Jesse Newhouse. “We knocked around a number of ideas and this was pretty much the only thing we could think of that was in any way enforceable and legal.”
The couple fired back with a $2.1 million harassment suit; the judge asked the board to remove the posters. One of the units has since sold, but the couple still owes the board more than $100,000, according to board attorney Robert Braverman, and everyone else in the building is paying 25 percent more every month to make up for the difference. Deprivation has worked in other buildings that he advises, Mr. Braverman said, but 95 Greene is “a very unusual, crazy situation.”
“It’s unfortunate that it came down to something as silly as that,” Mr. Newhouse reflected. “But we had someone who was gaming the system and there was nothing we could do about it. He had multiple units. He certainly had the opportunity to sell some.”
Had he lost faith in the method?
Mr. Newhouse sighed. “No. I mean we have to do something. I think it’s a war of attrition at this point, but we would be negligent if we did nothing.”
Mr. Nahoum was not available for comment. Like many of the other residents in arrears The Observer tried to contact, his listed number was no longer in service (phone companies, unlike condos, do not view cutting services as a novelty). The Observer did, however, reach Solomon J. Jaskiel, the lawyer who had represented the couple in the countersuit.
“Legally, I thought the poster was breaching the board’s fiduciary duty,” said Mr. Jaskiel. “Personally, I thought it was outrageous. Can you imagine if anyone who you owed money to could hang up signs in front of your house? I mean, the fact that they were living with these people—it’s even more outrageous!”
Still, the methods are not something that boards, brokers or management agents are all that eager to discuss. The practice seems a little indelicate, in the words of one source, or tacky even, as another whispered with gleeful reluctance. Prudential Douglas Elliman and Halstead property management declined to comment, and while Brown Harris Stevens admitted to using the practice, none of the buildings they manage wanted to talk about it.
They were even more reluctant to discuss public shaming, aka, posting arrears lists, although a few expressed shock and horror on even hearing that such a thing existed.
“I don’t think that’s appropriate. We don’t shun people!” cried Roberta Axelrod, who sits on the board of 10 buildings as a sponsor representative of Time Equities residential, where she is director of the sales and rentals division.
Certainly, some residents want to know who is in arrears, she admitted, but in her opinion, it’s none of their business.
Distasteful as the tactics may be—and even if they don’t persuade delinquents to pay up—they do serve some purpose. At Wellington Towers, the results of the austerity measures have been financially negligible, Ms. Sheinberg admitted, but they were certainly worthwhile.
“Has it caused people to pay their arrears?” she pondered. “I don’t know. But it has given the other unit owners …” she paused to find le mot juste. “I wouldn’t say satisfaction, that’s not the word. It’s almost like the punishment fits the crime.”