Is Having Stable Maintenance Fees a Good Sign?

Aug. 7, 2015 — It could be. But beware: you need to do some research. Has the building been taking money from the reserve fund into its operating fund to keep the maintenance stable? Has the building reduced services to keep the maintenance the same? Has the building had assessments to cover operation shortfalls? Does the building have a large amount of unpaid bills? Has the building balanced its budget or run a deficit? If the answer to any of the above questions is yes, then the "great" news is not so good.

Although not having increases may look great at first glance, it may be hiding a multitude of problems. This could be a ticking time bomb. The next maintenance increase may be huge to cover many years of operating shortfalls. It is very rare for buildings not to have even small maintenance increases year after year. Realistically, most expenses go up. Water, payroll, real estate taxes, insurance, and other essentials have risen every year. Some buildings have a small maintenance increase even when it is not needed just to gather extra operating funds.

So you need to do your homework, read the minutes, ask questions, and look deeply into the building's financial information to get a true picture of what has been and what is going on; then you will really find out if it is truly "great news."

Steven Greenbaum is director of property management at Mark Greenberg Real Estate.