Why did you hire Adam Leitman Bailey PC?
He was labeled as a fantastic real estate lawyer in New York. I didn’t know that yet and then and then I did some research and said we absolutely have to hire Adam after I did some searches about Adam and all the results he’d gotten and because of our type of situation in a conflict with a sponsor and building defects it seemed that he was the perfect representative for the building because he understood the sponsors perspective and also understood the issue perspective.
What was your role in the building?
I was the fifth person to move in or the third resident of the building and at that point the board had not yet been formed and we had advocated with the sponsor to get our board representatives as part of the offering plan until myself and another person were the condo representatives to the board which the sponsor unilaterally controlled. We started identifying defects we started identifying things from other residents as the first ten or so were full and that’s when we started on a separate campaign to engage Adam. I had organized a meeting for at that point 13 or 12 units to all come into Adams office to meet Adam and discuss what the issues are and what our options were and whether we wanted to engage Adam and I think every resident came away quite impressed by Adam so we engaged him as a group of residents prior to engaging him as the board, and then once we took control of the building we engaged him as the representative to the board.
So what was wrong with your building, what were some of the biggest issues?
Well the biggest value that we got by working with Adam going through this process is we identified some initial issues; those issues were relatively minor to what we identified after we hired Adam and after Adam hired Brand to do the reviews and once we got the engineering consulting report we really could evaluate what was important to us what we could use as leverage, what were defects but not necessarily material defects and things that we otherwise would not have identified. The things that led us to contact Adam were basically when you buy a new building in New York the sponsor under the offering plan provided a 6 month warranty and what was happening was people were identifying issues during the 6 month warranty and the sponsor was not resolving them in a timely manner and this was really stupidity of the sponsor because had they resolved the issues the people would not have organized to hire Adam and their ultimate liability would have been much less. So instead the sponsor ended up paying a lot more the building’s in a much better situation but we would have never gotten here had the sponsor acted quickly and efficiently to resolve the issues. The issues in the building that led to engagement of Adam were our lobby floor was not up to par. It looked nice from a distance but when you got into it tiles were starting to crack, caulking in the apartments around the tubs and everything wasn’t working and really the biggest issue and a quality of life issue that led everyone to this point is the flooring. The sponsor installed pretty bad flooring. Actually the flooring itself is what you would expect in a decent apartment but the sponsor didn’t install it properly, didn’t leave gaps along the edges and therefore floors started buckling and you could hear the pops because the floor was not properly dried prior to installation. You started seeing large gaps the first winter when the floor boards dried out and that’s the main issue that led everyone to engage him. There was a lot of noise transfer between apartments which only later did we realize it’s because of the fact no insulation was put in between floors so that was the main quality of life issue that led everyone to this process to engage Adam.
Okay, so that’s what brought you in the first place, then what other problems did he find once you got into it?
The flooring remained one of the bigger issues and a big lump of the goal of the settlement was to resolve the flooring issue. People contributed legal fees upfront to get that so that was always the highest priority but once we got in there we identified that the offering plan said that the parapet walls were all new, the parapet walls were not new and one of the other large pieces of the settlement, something we never would have found out is the fact that part of the settlement the sponsors replaced the parapet walls per the offering plan which should have been done up front and is now being done after the fact. The electrical systems were not provided as per the offering plan. Irrelevant of whether they were sufficient or not sufficient, what we bought wasn’t what they sold and that was really at the heart of the issue. Our ultimate issue is that we identified was roughly a million dollars worth of various defects obviously some of them over time were insignificant some were more significant but some of the larger ones were the engineering, the heating in the lobby which was missing, and really misrepresentations of the offering plan that we never would have discovered without going through this process.
Because being a board member the cost of an engineer for this process is quite expensive so unless you have other issues you need counsel for you as a board will have a hard time saying we should do this analysis because it’s expensive to do upfront and especially if you’re not going to invest to fix the problem you’re not going to do the work.
Okay, what services did we provide you?
Once we were engaged, Adam really kept us on track and the other associates and partners at the firm in terms of what our rights were what our issues were and really driving the strategy. I do have a level of legal experience myself so you know it was a really collaborative environment in that, although Adam and the various associates and partners here had a view of how to do things, I didn’t feel I was sidelined in terms of my views and we had some good disagreements that led to better results for both of us so that was something that was important to me, I didn’t feel like I was being sidelined by the counsel but I could also always trust their advice.
I should point out that both, everyone at the firm was unbelievably responsive so whenever an issue came up they were on top of it. If there was dead silence, they were okay with that. It was a really good relationship. We had some slow points and we had some starts, and I think especially when you’re on the board and now I am the president of the job and this is your second job not your primary job it was great to actually have them keep driving the process when they knew there was momentum and also know when to slow down when in order to let things move through when momentum slowed down but still re engaged at the right times.
Did you have to go to the attorney general with your case?
We did not, we were regularly discussing that as an option, luckily we reached a resolution prior to needing to go to the attorney general but we were ready at a position that we were ready to go had we not engaged in a more fruitful conversation.
So did you end up suing at all?
We did not; again we went to a position where we tried to put ourselves in a position ready to sue pretty much present that we are ready to go to the AG’s office and institute a suit against the sponsor and the sponsor decided to start talking to us.
So you ended up with a settlement, what did you get out of the settlement?
Because this process lasted for so long, it went from a stage of individual line items to individual work where we as a building because we are a small 23 unit building wanted the sponsor to do the work but wanted to direct who the sponsor would do the work using because we knew some of the contractors they use were poor and it would be a lot of effort for us to manage all the projects. The settlement went through several stages into what was offered and what was agreed where we started with individual lists and individual items and work that the sponsor would do and money they would pay to the building for smaller items. We ended up with a larger lump sum that the building would manage and it worked out for the better and the work piece where we got to approve the contractor for the electrical work and the roofing and the parapet wall work that the sponsor will have to do next summer. What was useful is we have time limits set up for when it has to be done. Both Adam and [redacted] fought really hard to make sure that the sponsor had to abide by the timelines and if they didn’t there would be penalties to pay which ended up being one of the sticky points for the sponsor but we still got it included because this gave them the incentive to ensure they performed
So compared to what you actually got in the settlement as to what your original goals you were hoping for out of this ordeal, hiring a lawyer, how does that compare?
That’s actually a really good question, I think we got more than we thought we would get definitely without a lawyer and we ended up getting everything we expected to get after we got the engineering report and looking at what a reasonable amount would be to ask for and the fact that the settlement went on for a while and the fact that the board played good cop and counsel played bad cop really played to our advantage in terms of having a decent relationship with the sponsor where we could talk on the business side and the having a relationship where the lawyers could talk from the legal side- in the end we settled where we wanted to settle when we started the process which was much higher than what the sponsor initially offered. So the fact that we stuck with it for an extended period of time and continued working through this it was to our advantage. The legal fees added up more than we expected to, but nonetheless the lump sum covered that portion to the point that we were comfortable with.
How were you able to get such a great settlement without going to the Attorney General?
I fully attribute that to the work of the lawyers of this firm in particular Adam and [redacted]. They have relationships with a lot of the other counsels whether it be because they worked together from an opposing standpoint whether it be because they worked together collaboratively. The world of some of these real estate lawyers is relatively small and the fact that the lawyers have worked together in various times, opposing each other, working together actually played to our advantage because they had working relationships they knew what things people could agree to they knew the lawyers involved knew what the various positions were of the firms in general and I think Adams reputation his experience was very beneficial in this type of situation where the sponsor did not want any publicity, they wanted to keep this quietly, they had two cases of two new constructions of the same types of issues represented by different firms and so their main reason was to keep this out of the press and the fact that we had Adam who was ready to not just use the legal system but use the court of public opinion and really publicize the sponsor for their defects really played to our advantage.
Did you have any in-person settlement meetings?
We had two in-person settlement discussions. One which we hoped would lead to the settlement, and then unfortunately I don’t recollect why it got blown up but the numbers were definitely much less than where we were in the final settlement and then we had a second final settlement meeting where Adam’s presence really helped a negotiation and really helped foster a settlement that then led to the business people walking into another room and getting a handshake deal.
What were the biggest obstacles that you faced in reaching a settlement?
Time. And that’s where I think working with Adam Leitman Bailey P.C. has actually been really beneficial in that they had their view on time and were concerned the case wasn’t moving fast enough. We wanted to move it faster but also had reservations about moving it too fast and that ended up being a collaborative experience where it didn’t feel the board was sidelined by the attorney or the attorney giving dooms day scenarios of why you should settle immediately rather than waiting so it was a nice point that we felt we had a say in what was happening in the process and Adam listened to that in the argument so it was collaborative in terms of how we got to a resolution.
Time was the biggest obstacle here because in general and based on experience in real estate you want to settle relatively quickly because you never know when your sponsor is going to go belly- up. In our situation had we settled quickly we would probably have settled for half of what we ended up getting and that really wouldn’t have been enough to cover some of the major issues that we had and that’s one of the reasons why we didn’t want to settle quickly. That was probably the biggest obstacle, I think worried about the expense that we were spending to continue this process through was something our treasurer and as a building we became quite concerned about whether we could afford this process and really not showing our hands that we reall Adam Leitman Bailey, P.C. recognize what our limitations were was also very advantageous to us and helped overcome some of those obstacles.
What are the best things that Adam Leitman Bailey, P.C. did to help you reach the goals in the settlement?
Being available to talk. There was a lot of times when we needed to make decisions as a board and it was really useful that you could always get Adam or another associate or [redacted] who was primarily working on this case. You could quickly get them on the phone, have a conversation, they made themselves available in the evening so everyone on the board could participate on the calls and they were thorough in their responses. So we could lay out here is what the boards view was do you agree with this why don’t you agree and it was a very collaborative conversation so that we could all feel good about the decisions. We didn’t feel like our lawyers were sidelining us, we didn’t feel like we didn’t have any power but at the same time we didn’t feel like we were controlling everything against the advice of our lawyers and I think that was a very useful process.
Are you satisfied with the results you got?
More than satisfied, I think we did better than we expected to do and in the end we got what we said- what we thought we would be settling at when we started the process. I think that’s the biggest plus here- one of the things at play in our settlement was not just cash but an extra unit in the building that the sponsor couldn’t do anything with. And that was a tough thing because the sponsor kept trying to trade that for some insane value and the key there was not trading that for any value, not attributing value and making them throw it in and we ended up getting them to throw it in and still got the amount that we really needed to get everything done. So I think we’re more than happy with what we ended up getting settlement wise because when you looked at the engineering report when you looked at what the issues were we said we’ll probably settle at this number and I think we probably got more than that number and that’s been pretty huge. Something I forgot to mention about a larger issue in the building is, the building has three duplexes on the first floor one of the duplexes actually the sponsor had to split up because they didn’t create a fire escape for one side of the building. That would never have been identified had we not hired Adam Leitman Bailey P.C. and hired engineers to do that. That cost the sponsor an additional amount completely outside of the settlement. So if you compute the total value of cash, work, plus things they had to do and did that they otherwise would not have done, we’re probably talking about a million dollars which has been tremendous for a relatively small building.
So you are a lawyer, in your opinion, is there anything Adam Leitman Bailey P.C. did better or worse than other law firms you’ve worked with?
I think the thing they did better was they were responsive. I mean that’s, you know in these types of relationships especially when there’s negotiations especially when you’re looking for advise on a regular basis, having attorneys that return your calls promptly and also have answers to the issues that you have and if they don’t immediately telling you that and saying we’ll get back to you is tremendous value because without that you can’t make decisions whether from a business side or legal side and the best experiences I have with attorneys are attorneys that respond to calls and answer questions and it’s amazing how many don’t do that so to always have someone available that would quickly respond whether that be via email, via phone call, via meeting, conference call that was tremendous because it allowed us to make decisions much quicker than we otherwise could have. The other advantage is that they were available to answer some of our other questions in the fact that we were a new board and they were willing to say lets remove this from the litigation issue and lets talk about some issues we have as a board and can you represent us there and can you assist us and advise us and they were very open to helping there as well.
Is there anything else we could have done?
I don’t think so, short of moving into the building. I mean, and I say that kind of jokingly but the reality is the firm and its staff were available at any point even to the point of messengering documents to me to get them signed to get the settlement done, making themselves available and their offices available for settlement meetings if we needed it for really helping me organize the building before there was any structure to get organized you know, that kind of advise was invaluable because it was not just a professional relationship but it was kind of a personal relationship that really helped the process and gave me confidence to go along with the process and invest the time and money into doing this. Which I think at some point really felt like futile based on how things were going and so it was really useful to have their support behind that. That was outside of a you know- this is a client- they’re earning money for us but in terms of a personal relationship that says here are your issues I think you’re going to get there, here are the steps we need to do to get there.
How was the team worked between Adam and [redacted] when they were working on your case?
I think they worked fantastic, the team, in that if a question came through one of them always responded, really if [redacted] didn’t know something or [redacted] knew something more than Adam- there was no problem chiming in and providing their views and opinions and their opinions didn’t always agree and that was useful to hear as well and it wasn’t a disagreement in that I’m right you’re wrong, it was of here’s my view on it, here’s my view on it – lets discuss those different views and reconcile them, which one do we agree with, which one makes sense to us argument wise and that was a really useful process because at some points- because the case had slowed down so much we were worried about where we were going how we were going to get this settled, next steps, how much was it going to cost us, and I thought their relationship working together was phenomenal and there was never a point where you would reach one and the other didn’t know what they were doing so the right and left hand always worked together.
Overall, how would you say the customer service of this firm is?
I think it’s on top with some of the better firms I’ve ever worked with on my business side in that they’re responsive, they’re available, they’re easy to reach, and going through a process like this that’s one of the most important things because if something happens quickly they make it a priority to address it. So, in last minute emergencies and closing they were there answering questions and dealing with issues through the late evening to get the deal done because they knew there was momentum that it needed to get done.
How is ALB at giving you general corporate advice? Are we equipped to handle all condominium and coop services?
Absolutely, I was nervous being president of the board in saying okay we’ve gone through the litigation process but if we have other legal issues, who do we rely on? I’m an attorney but this isn’t really my area of expertise I can do the softball questions as the president of the board but that’s not really my role and you know as we matured as a building and we asked questions everyone at the firm has been available and knowledgeable to answer the questions with respect to people not paying their common charges, issues resulting from construction work that should be done because it was affecting another apartment and it not being done, and Adam being there to write a letter to the point of illegal rentals, they’ve always been useful in helping the building and I think we will definitely continue using Adam Leitman Bailey P.C. for the corporate issues surrounding the work for the building.
Do you have any last comments or suggestions?
You know, my biggest comment is that if anyone needs a real estate attorney I’d always recommend Adam, I think Adam Leitman Bailey P.C. is very good for real estate related issues especially if it results to building defects, if it results with permitting, if it results with any construction or closing type of real estate issues, I have friends that have done various construction projects or have bought new condos and I’ve always recommended Adam Leitman Bailey P.C. as the attorney to represent them if they’re having issues.
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