I would certainly want an adequate explanation for those circumstances... do they have a cancelled check or transaction record showing that $108k payment? An accounting error would have a paper trail. Was the tax assessment appealed successfully, but only after the full amount was due/paid? Not unheard of.

Don't jump to a negative conclusion.... or an accusation that may be unfounded.

Hi,

This disparity looks ominous but isn't necessarily so. The City charges the larger amount but then it subtracts co-op abatements, STAR & senior credits so what the co-op (or mortgage company) pays is the net. The balance between the two is the shareholders, however, some co-ops assess that amount (mine doesn't).

I personally don't like that assessment as it is not an assessment on all shareholders equally, just to those with a credit due. In my mind, it tends to create two classes of shareholders so in my co-op, we just give it back as a credit on their bills.

I would suggest following the money trail. The funds are not in any way due to the managing agent unless that is in your management agreement (I sure hope not).

Presently many, if not most co ops recapture all or part of the abatement. However, it is unfair as you stated. A better and fairer way would be to assess each unit at a stated amount, perhaps, as an example 50 cents a share or whatever is necessary and in the month of the assessment recapture the rebate from those to whom it is due and expect personal payment from those who do not receive it. This would include any shares owned by the sponsor. We have been doing it successfully for years. The problem with this is the possibility of the elimination of the abatement. That will hurt many communities because those assessments are keeping many in a comfortable financial position.

Agreed, the abatement is a tax equalizer for co-op’s which as it stands are set to expire at year end. Our co-op just starting assessing it on a per share basis as one of several assessments, and yes the sponsor pays out of pocket, while shareholders pay only if the abatement doesn’t cover. This feeds directly into our capital reserve fund – which is separate from our operating funds, and reserve fund.
We do this for many reasons, but chief among them is our building needs the funds severely as we have serious local law 11, elevator, and plumbing issues. – This is what happens when your sponsor is the managing agent and still owns 60% of the building 30 years after conversion (thats a seperate conversation).
As far as differences with the city --- it happens frequently --- so nobody should rush to judgment. Most of the tax abatement information is online at www.nyc.gov in the finance section.
Note that I have seen the city take upwards of 18months to adjust their roles from sponsor to owner which has an impact to the buildings entire tax abatement amount.
A second key point is how the abatement works which is not ideal – the city credits the co-op by reducing the tax liability – so rather than cutting the shareholders checks, they adjust what is owed, which then allows the co-op to pay a reduce amount – with the difference going to shareholders.
Here is another odd twist – many – not all buildings only count their reduced tax bill as the total liability/expense for budgeting which is not correct – as they are still paying the un adjusted total, just in two ways – city as tax, shareholders as abatement funding. --- This can lead to cash shortages, delayed abatement credits, and many of shareholders concerns.
One last note, NYC’s fiscal year starts July 1, it doesn’t sink with the calendar year which is used for many co-ops reporting, please keep that in mind with differences, disputes, etc.
I hope this helps.

By law, all assessments must be on a per-share basis. This applies to an assessment for the real estate tax rebate. STAR and Veterans' credits are quite different: they cannot simply be assessed back because not all shareholders receive those credits.

As an example, consider a mythical coop with every apartment having 100 shares and maintenance of $10 per share per month. Suppose that the real estate tax abatement amounts to $5 per share. The coop assesses ONLY this amount back. On the same maintenance bill, STAR and/or Veterans' credits also appear, leading to once-a-year bills like this (the credits are just examples):

No STAR or Vet: $1000 - $500 abate + $500 assess = $1000
STAR only: ($1000 - 500 + 500) - $100 STAR = $900
STAR and Vet: ($1000 - 500 + 500) - $100 STAR - $50 Vet = $850

This sounds complicated, but good managing agents can grind out these numbers in their sleep. The per-share assessment is the same for everyone, which is the only legal way to do it.

Good catch!
All MangCo are not the same and tend to be as good as the Board demands -- but the rule should be: Trust but Varify. Also, put EVERY question in writing, start the Eamil trail.

Too many B/M consider the MangCo and PropAgent thier friends, while forgetting that they are employees whose agnedas differs from the S/H's. and whose work needs constant review and scrutizing.

We are in the process of trying to find missing monies from our accounts from a few years ago. We also discovered that our previous MangCo took the easy way out and -- by discontinuing the (legal) practice of having non-union workers fill in for vacation/sick days, we lost -- in one year -- over $60,000 by paying regulars to fill in. Regular staff is paid Union scale+benifits+etc while non-union is pay only for the hours they work. Its extra work for the MangCo to keep the non-union pool of workers.

As we go into LL11, no matter how "nice" your MangCo or PropMang are, and professional the engeener-- read the contracts, engeeners reports, take a visual tour and ASK questions. Once the work starts those expensive "Change of Orders", become a cash flow for the engeener. We discovered overlooked work during a visual tour of the building with the engeeners report in hand -- also private work on a B/M apartment was included in the cost. Too often, Common Sense trumps the experts.

If you see that the MangCo is tring to discourage questions or intimidate B/M who ask too many questions -- remember that its YOUR Money, and YOUR building -- and ultimatley the Board, if you do not do your due-dillegence (sp), is responsible.

If this sounds extreme -- its because we have experieced it all, and our Coop has learned an expensive and hard lesson. TRUST but VARIFY!
VP

Does everyone know about this?

Discounts for Early Payment
Taxpayers who pay the "Everything You Owe..." amount on the Statement of Account coupon are entitled to a discount. For bills with due dates after July 1, 2010 (FY11), you will receive a reduction of:

1% on the full amount of your yearly property tax if you pay the entire amount shown on your bill by the July due date (or grace period due date).
0.66% discount on the last three quarters if you wait until October to pay the entire amount due.
0.33% discount on the last six months of your taxes when you pay the remaining balance by the January due date.
If you pay semi-annually you will receive the 1% discount if the entire amount owed for the tax year is paid by July 1st.

Thanks for the info, we have known about it but find if very difficult to move past the pay as you go structure we have in place. With our real estate taxes over 200K, only 57 apartments, and a large foot print of 70K square feet, we have no real way to boost accruals to save the funds needed to make the payment and realize the savings. If you can take advantage of the offer, Kudos!

Yes, we save up all year, get interest on the savings and then pay it off all at once. We save/gain interest of about $3k a year.