Doing Renovations? Your Homeowner’s Insurance May Be Void

Posted on February 7, 2011 by BeatingUpwind

We’ve formally applied for our rehab loan and gearing up to start construction (finally!!) One of the items we knew we’d have to deal with is insurance. The bank requires it, and we want it…

When we spoke with the insurance agent our real estate lawyer recommended, he told us we needed what’s called a “builder’s risk policy” and it would cost $6,000 per year. But in talking to our loan officer he was recommending we get a homeowner’s policy that would cost a fraction of that amount.

We resisted buying the builder’s risk until we were actually doing construction. Our agent found a renter’s policy (with Chubb) that gives us liability coverage at the building (not something renter’s policies usually do). But now we need to get a proper policy and we’re conflicted. The new quote came in for the builder’s risk policy and it’s $6,916/year – almost $7,000!

We’d like to get a homeowner’s policy to save money, but in reading up on it, most homeowner’s policies won’t pay out if the building is under renovation – which is why our agent was recommending builder’s risk. You’d think the loan officer would know that – he deals in a lot of rehab mortgages. Hopefully he’ll know which insurance companies issue renovation-friendly homeowner’s policies. But the issue is that our building isn’t even habitable – somehow I think we’ll be stuck with a builder’s risk policy.

So if you’re doing renovation – check your homeowner’s policy very carefully and make sure it will payout while you’re doing work. You don’t want to pay for insurance and then find out you’re actually uninsured when you put in a claim… As much as I don’t like paying $7,000 – I’ll sleep better knowing I’m properly insured.

A Stop Work Order When Violation Is Resolved?

Posted on February 1, 2011 by BeatingUpwind

Geez… It just never ends with the NYC DOB… We STILL have a stop work order despite the fact that all the violations have been resolved. Here’s our building page on the DOB website clearly showing that we have a stop work order…

When you click on the stop work order link to see which violations are behind the stop work order you see this…

Notice there’s only one violation and the status column is “RES” (resolved). But just to reiterate the point here’s the detail page about the violation. Notice “RESOLVED” in big block letters…

I’m really sorta sick of all these sorts of things. It’s one thing to be strict, it’s another to have computer systems that are incapable of removing a stop work order when the underlying violation gets resolved. Or issuing violations for not closing an approved job that can’t be renewed.

This is 2011… They need to get a computer programmer and put some common sense into their systems…

Round 1 w/ Historic Preservation – OK So Far

Posted on January 26, 2011 by BeatingUpwind

It took us forever to get our application together for the historic preservation tax credit, but we finally got it in just after New Years. Yesterday we got a call from one of the reviewers who asked a few questions and then sent us a PDF of their comments. All in all no huge surprises. They wanted a lot more detail on exactly what we were doing with the exterior masonry. How we were getting the stucco off the brick in the rear. How we were cleaning the brick. Exactly what we going to do with the front since the brownstone is currently painted, etc. If you follow historic preservation guidelines none of those items are big deals. It’s just important to make sure you know what they want before you do it. Today we had a meeting with our contractor and the masonry sub-contractor – none of it seemed to be a problem, though it did change how he was going to handle the brownstone in the front.

They also wanted to know what we meant about raising the parapets. They prefer we put railings on top of the parapets instead of raising them. However, on the party wall fire code requires that we actually raise the parapet. The sum total is that they want us to raise parapets as little as possible and prefer railings over taller parapets since railings are easily reversible.

One issue was that we had spec’d vinyl windows in bathrooms. The windows are in shower areas and vinyl is more appropriate in a wet location. Plus, it’s in a sidewall which is a few feet from an apartment building – so not generally visible. The said they understood why we had spec’d vinyl in that particular location, but said the National Park Service usually doesn’t like vinyl windows. But the sum total was that they cautioned us to not order the windows before we get NPS approval – so it sounds like they personally think vinyl is OK in that particular situation.

The last issue was that I told her we heard from our window and door manufacturer that they weren’t able to fabricate 10 foot tall doors. That means we’d need to have shorter doors with a transom on top. I said our other option was to get salvaged doors and restore them, but our concern was that they wouldn’t be identical to what was there originally. She thought salvaged doors were the stronger option even if they weren’t like the originals. As long as they were of the neighborhood and of the era we’d be fine. However, in talking to our contractor today he’d prefer to make new replicas of the original doors. We just have a photo of our place from 1940, but I think it should be good enough for him to come pretty close to what was there originally, so that’s what we’ll propose in our revised application.

All in all nothing major. That means we can proceed with getting a loan and going into contract with our contractor. More hurdles to jump through, but we’re moving forward…

It’s Just A Construction Fence…

Posted on January 26, 2011 by BeatingUpwind

Continuing with the bureaucratic insanity of the NYC DOB… It’s amazing how difficult it is just to build a simple plywood construction fence…

First and foremost it takes a completely separate permit to build a temporary construction fence. They’re all built pretty much the same I honestly don’t know why they can’t have an approved design that people can build without a permit. If you have an approved permit for other work, then the fence should just be something that you can do without overthinking it. But no, this is the NYC DOB we’re talking about.

Next up our architect had never drawn a construction fence and didn’t want to be responsible for it. I guess there are liability issues since pedestrians come in contact with it. The architect/expediter who works for him hadn’t ever drawn one either. So we asked our contractor to take care of it. His expediter searched around for the architect with the best price and $800 later we had plans we had approved plans. I doubt our contractor will charge us $800 to build the thing – it’s just plywood and 2x4s…

But that’s not the end of it… We have a permit for construction, we have a permit for a fence, but we still have a stop work order on the property so we can’t do anything…

The original stop work order that was issued in 2007 for working without a permit when no work was being done and a permit was in place (but not displayed) – that one got lifted. But apparently the new stop work order they put on us in late December for having two sets of approved plans is still in place. But I’ll reiterate – the first set has expired and cannot be renewed. We filled out the paperwork to cancel the original (expired) job a couple of weeks ago now, but they still haven’t lifted the stop work order. How is this so complicated? Old plans that can’t be renewed + new plans that reference the old plans… What’s not to understand?

All we want to do is build a construction fence to resolve a violation (for the current fence not being constructed properly)…

Once we have the stop work order resolved things should go a bit more smoothly. We want to start renovations in earnest in mid to late March. Before then we want to get sewer, water, electric and gas service re-established. But sometimes it just feels like it’s never going to happen…

Bureaucratic Insanity @ The NYC DOB

Posted on January 7, 2011 by BeatingUpwind

There are times when all you can do is shake your head in disbelief… Let me go back in time to explain…

November 2005 – The prior owner of our townhouse submits plans to the DOB to convert it to two family.

July 2006 – The plans still aren’t approved, so the owner submits a smaller set of plans just to do demolition. They’re approved in August and a permit was pulled on August 2, 2006.

November 2006 – The original full set of plans are finally approved.

January 2007 – A permit for the full job was pulled.

February 2007 – Plans were filed and approved to build a construction fence.

March 2007 – Plans were filed and approved for structural, mechanical and plumbing. No permits were ever pulled and none of the work was ever done.

July 1st/2nd, 2007 – The permits for demolition and renovation expired on the 1st and were renewed on the 2nd.

July 14, 2007 – A violation and full stop work order was issued for not having the renewed permits for the full job posted. However, a permit was in effect and as far as we can tell no work was ever done on that job.

August 2007 – The permit for the construction fence was pulled. It was renewed 11 days before it expired.

July 1, 2008 – All permits expired.

March 2010 – We purchase the building.

April 2010 – We submit plans to renovate the building.

August 2010 – Our plans are approved.

December 23, 2010 – We pull a permit to do work (but don’t actually start).

January 3, 2011 – An inspector stops by the house and issues another violation for not having resolved the stop work order on the building from 2007 even though the stop work order was issued for not having a permit when a permit existed and no work was being done and we still weren’t doing any work.

Our problem at the moment is how to get rid of the stop work order from 2007. It should never have been issued in the first place – no work was being done and there was a permit in effect at the time (it just may not have been displayed at the property). But now that it exists it won’t go away… In fact we got another violation 3 days ago for not resolving the first one. We thought if the violation was for not having a permit, that getting a permit would resolve it, but no… You can have a permit and get a violation for not resolving a stop work order that was issued for not having a permit (when there was a permit).

Our contractor’s expediter is saying that we should withdraw the previous owner’s job application. The problem we see with that is that that job is the primary job number for our job. Because that job was never started (or completed) and our job has roughly the same scope of work our job continues that job. If we withdraw it we worry we’ll void our current approval and permit.

To me it’s just absurd that DOB is enforcing a stop work order that probably never should have been issued in the first place when we’ve resolved the underlying issue. It’s also absurd that you can get a stop work order for not having a permit posted when you’re not doing any work. It’s also absurd that it doesn’t seem anyone can press a “resolved” button somewhere and make it all go away. I mean a full stop work order in a situation like this? Please…

UPDATE: The expediter got back to us. It’s not quite as bad as it sounds… They do recognize that the original 2007 stop work order was an error and it should get cleared without a problem, though it will take them a few days to handle it. And the stop work order a few days ago was because we technically had two “Alt-1s” active at the same time. In other words two sets of building plans had been approved for the same place – the 2005/2006 set and the 2010 set. Thing is, we’ve been told previously that the old plans cannot be resurrected – once they’re expired for two years they’re completely dead. So it’s still a bit crazy that we got a violation / stop work order for not formally withdrawing plans that can’t ever be reopened. Why can’t the system just automatically withdraw them for you?

The one lesson from this is that you should clear all violations and pull ALL your permits before starting your mortgage. If we were paying $5,000+ a month on a mortgage while all of this was happening I’d be freaking out right now. As it is, it’s just a somewhat amusing irritation. Hopefully the expediter won’t charge us an arm and a leg to take care of it.