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.

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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.

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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.

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