Five Ways Your Co-op Can Fatten Up Its Reserve Fund

1. Aligning assessments with tax abatements. You can bolster the reserves by "assessing at the same time a co-op abatement is credited to the shareholders and for approximately the same amount," explains Jay Menachem, a certified public accountant. For example, if the shareholders receive an abatement of $500, then the building would assess them for roughly $500. "The assessment would be calculated on a per-share basis so that all shareholders are charged the same per share amount," he explains. This way, the shareholders don't have to dip into their own money to pay the assessment and the abatement money goes toward replenishing the reserves. There is a caveat, however. "Not everyone is eligible to get the co-op abatements," adds Menachem. "Only primary residents do."

2. Increasing maintenance charges. Keeping a building running smoothly costs money and those costs rise year after year. To cover things like increasing water and gas bills, buildings should prepare an annual operating budget. Included in that budget should be a line item to fund the reserves and increase maintenance charges when needed.

3. Putting unused space to good use. Take a look at unused space inside and around your building as well. Can you expand an existing storage area or create additional parking spaces? If your building has unused space in the basement, you can add storage lockers and rent them to the residents.

4. Borrowing money. If your co-op refinances its mortgage, you can borrow money not only to repay the existing mortgage, but also to cover planned capital projects and to fund the reserves. Additionally, many buildings already have a line of credit attached to their first mortgages, and you can draw on that line of credit to increase the reserves. "Having the line available does not count toward reserves," clarifies Menachem, "[it] only [counts] when it is drawn and the money is deposited into the reserve account."

5. Making the most out of your roof. If your building is located in just the right spot and stands at just the right height, then you can rent the roof to companies so they can install cellular antennas there. The going rate for just one antenna is between $2,000 and $3,000 per month, explains Menachem, who adds, "you can rent the roof out to more than one company." It's an innovative way to fatten up the reserves.