Inside a Condo, a Not-So-Civil War

March 27, 2005
By JOSH BARBANEL

COMPLEX DISPUTE Avital Shimshowitz, a resident of the Future, a condo on 32nd Street, was prevented from running for the building’s board.


EVER since the Future Condominium, a modern glass and aluminum tower on East 32nd Street, opened in 1993, Avital Shimshowitz and her neighbors have lived in simple peace and harmony, at least most of the time, in this vertical Manhattan village.

So Ms. Shimshowitz, who is the manager for the Sean John men's clothing store on Fifth Avenue, was surprised at what happened when she decided to run for the board of managers at the annual meeting last June.

First, she was told that she couldn't run because there were already enough candidates and that she had missed a deadline. When she insisted, she said, the meeting was postponed a month, until the middle of the summer.

Then the day before the rescheduled meeting, the condo board president quietly filed a lien against Ms. Shimshowitz, after she had missed a single $100 installment payment on an assessment the month before.

The lien, filed without a telephone call or any notice, or even a vote of the entire board, caught Ms. Shimshowitz by surprise, she said, and she did not notice until the balloting was over that the footnote next to her name on the ballot indicated that she was "in arrears." Under the bylaws of many condominiums, owners with unpaid liens cannot serve on the board.

As many of New York's condominiums and co-ops head toward the rush of annual spring meetings, with the usual blur of financial statements, amendments and board elections, the events at the Future may be a textbook example of what can go wrong in an otherwise pleasant building.

Neighbors thrown together by financial happenstance or the luck of the real estate market are sometimes shocked to find themselves acting out childhood angst and rivalries at the condo or co-op board. In the worst cases some yearn for the clinical detachment of a rental building.

Many at the Future bought their apartments at a deep discount, at the end of a real estate recession, and have seen their values nearly quadruple. Most have come to love the unusual angled facade on their 35-story building, designed by Paul Rudolph, with balconies that jut out at a rakish angle and give the appearance of tilting downward toward the street.

But as the condo's management passes from the hands of some of the early buyers to a new generation of owners, there has been anguish and pain on all sides, and open warfare carried out in a barrage of angry e-mail messages and memos slipped under the doors of the 165 apartments in the building.

The conflict over Ms. Shimshowitz is just one of many; there have been disputes over the audited financial statements, complaints that old-timers had more than one storage locker downstairs, and accusations that a former board president absconded with thousands of dollars of granite paving stones.

"I'm thunderstruck," said Stuart M. Saft, a longtime condo and co-op lawyer who is chairman of the Council of New York Cooperatives and Condominiums and who was not involved in the case.

"I have never heard of a civil war like this. This is horrendous."

Current board members, who support the lien against Ms. Shimshowitz, talk about their rage at special treatment given to some apartment owners by previous boards, and their confusion and pain over their efforts to simply try to do some good for their building community.

"It makes being on the board a punishment," said Al Urbont, who owns a printing and design business and who is in charge of the landscaping in the large plaza next to the building. "We have to watch our backs for fear of getting knifed all the time."

The Future Condominium was conceived as a grand building, even bigger than its current disputes. Rudolph, the modernist architect who was the dean of Yale's architecture school from 1958 to 1965, was a design consultant who gave the building its distinctive sculptural shape and its skin of glass and aluminum, uncommon then in residential buildings.

The apartments, laid out by Costas Kondylis, the architect of record and current dean of New York condominium design, had high-end kitchens and in some cases, dining rooms that seemed to float over the city in a wall of glass.

But the project focused on the future was completed just as the best days of New York City real estate appeared to be in the past. The market for condos collapsed in a rash of foreclosures and bankruptcies. By 1993, prices were $350 a square foot.

Many of the first round of buyers were doctors and professionals working at and around New York University Medical Center by the East River, and board members say this group formed the backbone of the condominium's culture in its first years of independence. It is one of the few buildings in Manhattan where a transplant surgeon was placed in charge of the gym.

Larry Simms, who is married to an obstetrician who works at the hospital, was the board's first president after the owners gained control of the building from the sponsor. Both his supporters and detractors say that Mr. Simms, who manufactured and marketed construction materials but has since sold his business, seemed to have plenty of time to delve into the minute details of almost all aspects of running the building, and he almost always seemed to know more than anyone else.

After serving as president off and on for many years, he left the board only to run for election to a two-year term again in 2003. He won a seat and later took over as president for a while. And that was when the trouble began.

When it came time for the board president to send an annual letter to the building's accountant, representing to the accountant that the board was unaware of any fraud, Mr. Simms reviewed the financial records and said he could not sign the letter without some qualifications. He said he had found four instances of possible fraud involving the former managing agent, including an unauthorized $15,000 bonus to the superintendent, $61,000 of unauthorized overtime and an insurance settlement paid without board approval.

But other board members thought the accusations were overblown. Julio Marquez, an investment banker with an M.B.A. from Harvard, was the treasurer then and he was outraged by the suggestion that he had mismanaged the building's finances. "It was the most ridiculous accusation I have ever heard," he said.

At a board meeting last May, Mr. Simms was removed as president and replaced by Mr. Marquez. Toward the end of the stormy meeting, accusations about the missing bricks were brought up for the first time, participants said, and over the next few months several longtime board members, troubled by the personal attacks and the tenor of the meetings, resigned.

The mystery of the stones, as chronicled in angry correspondence over many months, began when the granite pavers were pulled up from the plaza outside the building to make room for landscaping some years before, and had been stored ever since. Mr. Simms said that the Fire Department had objected to the way the stones were stored, but that when the building staff tried to put them out as trash, the Sanitation Department refused to take them away.

Then with permission from the building staff, he said, he removed some of the stored stones, a few bricks at a time, and drove them to his summer house on eastern Long Island and put them down in his garden. At the time he was not on the board, he said.

After several heated exchanges, the new board president and two other board members went to the 17th Precinct station to file a grand larceny complaint against Mr. Simms, but the police took no action.

The board then proposed a new ethics policy that would have allowed a simple majority of board members to suspend any member. Mr. Simms said the proposal was targeted at him, and it was never adopted by the unit owners.

Eventually, because the board said the redesign of the lobby required matching granite stone, Mr. Simms brought the granite stones back, but he is still furious. He filed a libel and slander suit last July, dismissed on a technicality but expected to be refiled, based on the various e-mail messages and memos distributed to his neighbors. Mr. Marquez, on the other hand, said he believed that the stones were returned because of the threat of police action.

After the suit was filed, the board voted to accept Mr. Simms's resignation as a board member and appointed a new member to replace him - even though he said he had never actually submitted a written resignation letter to the board. Mr. Simms said he was so disgusted with the board that he had intended to resign but then changed his mind.

Lisa Lazarus, a board member elected last June who is a labor lawyer with the National Football League, said that on the new condo board every member has a special area of interest, from the garden to the lobby renovation to finance, and that Mr. Simms didn't fit in because, in her view at least, he knew a little about everything.

"It is a very small minority of people who are involved," she said. "The vast majority are very happy."

But despite the libel and slander suit, Mr. Marquez and several of his fellow board members still stand by their complaints that Mr. Simms absconded with building property and say they are angry about it. "There are still bricks missing," Mr. Urbont said.

They are also still angry with Ms. Shimshowitz, who they said received special favors from the condominium board and then attacked it in public.

Ms. Shimshowitz had approached the board several years ago, when it adopted a $250,000 assessment, and asked for help because she was in the middle of a divorce, under financial stress and unable to pay her $1,700 share of it.

The board agreed to let her pay $100 a month toward the assessment. Ms. Shimshowitz said that she had inadvertently missed a single $100 payment due by June 15, because the building had changed billing systems the month before and the new condo bills were inaccurate and confusing.

But by then she had already decided to run for the board. One evening Mr. Urbont and another board member, Yolanda Pessina, an architect who is overseeing the lobby renovation, confronted Ms. Shimshowitz in her apartment about some comments she had made in an elevator, defending Mr. Simms and disparaging the rest of the board. She said they told her that since she was the only one in the building to get an installment plan, she should stop complaining.

After the angry confrontation, in front of her 9-year-old daughter, Ms. Shimshowitz decided to fight back by running for the board. She had no complaint with the conduct of the former president. "Larry Simms is the straightest, most honest guy in the world," she said. Ms. Shimshowitz paid the $100 installment on the assessment due in July on schedule, but by then Mr. Marquez and the treasurer, Andrew Brint, said they had decided that since she had violated her agreement, she owed the entire $800 still due on the assessment, and with late charges the lien totaled more than $1,300.

They described the process in detail to a reporter who was invited to attend a board meeting on a recent Saturday afternoon. As they discussed the issues, some members became angry all over again.

Mr. Brint, a forensic accountant who had feuded with Mr. Simms over lockers in the basement, said that he and Mr. Marquez had the lien papers prepared in advance, waited day after day to see if Ms. Shimshowitz had paid the $100 that was due in June, and then filed the papers only the day before the meeting. He explained that the delay gave her as much time as possible to pay before the annual meeting.

Mr. Marquez said the board had no special obligation to tell Ms. Shimshowitz that she was in arrears, because the money owed for June would appear on her July bill, and that was sufficient notice. In a deposition he said that during the argument in her apartment, she said she would not pay another penny in protest, but she disputed this, and noted that she had paid her July assessment on time.

When the date of the big vote finally came and a stormy meeting was called to order at a church down the street, Ms. Shimshowitz finished last of five candidates for three board seats. The meeting ended with a loud altercation in the audience immediately after the voting, according to the minutes.

It was only after a neighbor approached her and said, "I'm so sorry I couldn't vote for you," that Ms. Shimshowitz realized one reason why. The ballot had a star next to her name and the star pointed to a note saying "owner in arrears with the Condominium as of 7-27."

A lien is a formal legal claim against a property, and is the first step in a process that can lead to foreclosure. Most buildings do not file liens until a debt is significant. In the history of the Future, a lien had been filed only once before, against an owner who now owes about $30,000. At the time of the new lien, five apartments in the building owed $1,300 to $3,300 but had not had liens placed on their units, Mr. Simms said.

Last month, after Ms. Shimshowitz had paid off the entire balance of the assessment in $100 installments, she and Mr. Simms filed suit against the board. He asked the judge, Justice Edward H. Lehner of State Supreme Court, to reinstate him to the board, and Ms. Shimshowitz asked the judge to order the removal of the lien.

As the lawyers were preparing for the hearing, the board decided to remove the lien, even though the late charges and legal fees had not been paid. At the hearing Judge Lehner appeared to agree that Mr. Simms had not resigned and fashioned a compromise in which the board's lawyer, Mark N. Axinn, agreed to hold its annual elections early, by mid-May rather than in late June.

At the end of the hearing in Judge Lehner's courtroom on March 17, after the stenographer had stopped taking notes and the lawyers for both sides were packing up their briefs, the judge leaned forward and said, "Just remember, you have to live together."

http://www.nytimes.com/2005/03/27/realestate/27cov.html?ei=5070&en=3afb7fbe17841c1b&ex=1112418000&pagewanted=print&position=