What should be in an alteration agreement?

On Behalf of | Apr 23, 2024 | Construction, Real Estate Disputes, Real Estate Disputes, Real Estate Transactions

As buildings age and suffer damage over time, they could become subject to major renovations or repairs. Carrying out these types of work may be necessary to maintain a building’s structural integrity and functionality as well as to improve one or more units. However, these projects typically require extensive preparation to help keep the tenants and the building’s management aligned or informed about what will happen.

Aside from construction-related planning, adequate paperwork detailing the project, such as an alteration agreement, should exist. This legal document informs involved parties, such as the co-op, tenants, and shareholders, about the work planned for the building. Additionally, this document can help ensure the construction happens correctly and lawfully.

This agreement can also have other components, including the following:

  • Terms indicating whether a security deposit for the project is necessary and conditions to signify once work is complete
  • Indemnification provisions making the party who initiated the project, whether a shareholder or unit owner, liable for damages to other parts of the building because of the construction
  • Insurance requirements for contractors and other parties, including homeowner’s insurance if deemed necessary by the building’s management

Other terms and conditions can also apply to this type of agreement. Most building managers and organizations have standard templates for this document. Still, it could require changes according to the project’s nature and circumstances.

Creating an effective alteration agreement

When organizing requirements before initiating major renovations, repairs and other construction work, consider seeking legal guidance for the alteration agreement and other associated paperwork. Despite having templated paperwork, some projects can have varying inclusions, which should be in the documents. Taking these measures may seem tedious, but they can be helpful to keep the project running smoothly and address legal issues that may arise.