The Real.Est List
Inside story: Roadmap to graft starts with the super
I recently read your story about the board member and building staff pilfering their respective building and wanted to reply about it. First let me state that this type of behavior--a board member and staff working together--is rare.
What is more rampant is for resident managers (superintendents) to have their hand out. It is regarding these modern day robbers that I am writing to you.
I have worked in and around Manhattan residential properties for most of my adult life in a variety of capacities, currently as a contractor, and have seen firsthand their audacity.
I want to be clear that many of the resident managers working in the buildings today are decent hardworking men who would never do anything that was improper or illegal. Unfortunately there is a large batch of bad apples in the group (the high-end Park Avenue-type buildings are the worst) and it is this group that needs to be dealt with.
Let me explain as best I can some of the “holdups” these bandits like to pull off. Most of these heists are usually against contractors or delivery companies such as a moving company.
In many instances the super will simply come right out and say something like “things will really go smoothly with our help” or “If you need anything just let me know right away and I’ll take care of it”.
Now, let’s assume you just fell off the turnip truck and you don’t get the message and fail to deliver an envelope to the super within a few days of the conversation.
All of a sudden, the elevator becomes extremely slow or unavailable for lengthy periods of time. There are numerous inspections of the apartment and in every instance there is an issue with something that is being done. When finally it dawns on you that this is their way of reminding you that they did not receive their “tip”, you rush out and get your cash together and make the deliver and low and behold everything seems ok again. The elevator is operational when you need it, and those pesky inspection issues seemed to have all been resolved.
This exercise can be repeated numerous times in the case of an apartment renovation. In many instances where there is a large staff, the super, the handyman and in some instances the porter can even be a problem. The staff in these buildings often feels a sense of entitlement because they feel they are being underpaid by the building, and because they think contractors are making so much money that they can afford it.
Another method of corruption commonly employed by the supers is to rig the bid.
In this instance, the resident of a building approaches the super and asks if they know of a contractor who could do some work in their respective apartment. The super being the helpful person they are known to be, answers of course he does, let me get back to you with some names. Many supers will then call upon a few contractors that they know will do the “right thing” and by that I don’t necessarily mean do quality work for the best price.
The super will tell each of his contractor buddies that he has a job for him and that he is going to do his best to make sure he gets the job. What the poor contractor often does not know is that the super is making that same call to 2 or 3 other contractors telling them the same story.
Once the super has all his contractors lined up he then presents them to the tenant, telling them that he knows of their work, but recommends strongly that the tenant should check their references carefully. He will then try his best to offer his help to the resident with the bidding process trying to make sure he gets the inside information, which is an important element to the scam. Once the super has the inside information on the prices he will then be able to negotiate a better deal for himself.
Here is what they will do: Contractor 1 bids $10,000, Contractor 2 bids $13,000 and Contractor 3 bids $14,000 and now the super knows the value of the job.
He then goes to Contractor 1 and asks if he is comfortable doing the job for $10,000, when the answer comes back of course I am, then the super says ok, I want you to submit a price just under $13,000 and give me the difference. This type of situation is usually perpetrated by supers who have established themselves very well within their building and the residents have no reason to question their loyalty.
Then there is the lazy super who will try to pull of the same type of scam except all he does is wait and see who got the job and then takes claim for having influenced the tenant into giving the contractor the job. Many times these supers will simply suggest that a small token of appreciation is all they want for their effort and that in return for this “gift of appreciation” the contractor can expect to see more work in the building.This “gift of appreciation” can range anywhere from 1.5% up to 5% of the total cost of the project.
I have heard from various colleagues and other sources of stories of supers who would brag about the types of “gratuities” they were getting, such as trips to exotic locations or more menial things such as expensive lunches and or dinners at places like Sparks or the Palm.
There was a story about a super who missed an invitation by a vendor to attend a luncheon one day. Instead of simply letting it go, this individual went to the restaurant that night with a guest for dinner and told the staff at said restaurant to give the bill to the vendor the next time he was in, which the staff did.
There is the story of a super calling a vendor and asking him to meet him right away to discuss a lucrative project that was coming up in the building. The vendor anxious to make sure he has a chance rushes to meet the super and is handed the super's shopping list for Christmas. The project, which never materialized, was the lure to get the contractor to jump.
In my years around the residential real estate market I have spoken with many contractors, plumbers, electricians, apartment renovators and various other service related trades who cater to the industry and all agree that on every job they bid they include something for the building staff. It is difficult to pinpoint an exact amount but it ranges anywhere from 1.5% up to 10% of the total cost of the respective project. So on a $250,000 job, anywhere from $4,000 to $25,000 is skimmed off by the staff. That's essentially money that would otherwise be in the resident's pocket.
In the late 80’s and 90’s there were two separate and distinct investigations into the corruption in this industry conducted by the New York City District Attorney. The result of his investigation closed several management companies, led to indictments of numerous managing agents and a select few contractors, most of whom were in the waterproofing industry.
While the investigation took place over years and actually netted two groups of people there were minimal arrests of the supers. Some would say that is because they did nothing wrong, I would say that the District Attorney was afraid his office would be overrun and tied up for years if he started to arrest these guys.
No one disputes that gratuities are a part of New York and that they should be given as a reward for good service. If a super or his staff help out and are asked to do more work as a result of work being done in the building or in an apartment, they should get a tip.
What has to stop is the sense of entitlement these guys have so much so that they are reaching in to the pockets of not only the contractor but the residents of these buildings. Once it becomes known that a super is greedy, anyone working in that building will add the cost of doing business with that super in to their price, which in the end only hurts the residents of the building.
(Editor's note: This is part of a series of first-person glimpses into life in a NYC co-op or condo building. Names and identifying details have been changed. If you have a story to share, drop us a line.)