My 111 unit co-op is in upper Manhattan and we are not a wealthy population by any means. We save up over 12 months and pay off the Real Estate Taxes all at one time in July. So in August, we start savings up for the following July’s annual real estate taxes. We got our bank to drop the escrow requirement for the mortgage (NCB) and they allow us to do this internally. There are three benefits: the co-op receives interest each month as we save up; we get the discount on the 2nd, 3rd and 4th quarters of early paid tax (the 1st quarter is considered paid ‘on-time’ and not eligible for the discount); and we have created a working capital reserve in case of emergency. We estimate that we either save or earn about $4,100 per year.

There is an additional benefit. This assists in creating a Board culture of saving up ahead of time for expenses and projects (fiscal discipline). For example, we are completing a $500k roof replacement project without assessment or loan as we already had funds on hand.

Finally, we also self-escrow the annual insurance charges. This allows us to pay off the annual worker’s compensation and building insurance policies fully when due to avoid paying the insurance premium finance fees. We used to self-escrow for the annual water/sewer bill (frontage) but since we switched to quarterly billing (meter), we save up for the quarterly bill.

Seems like you are in a well-run coop. What other tips do you have? Maybe Habitatmag can do another article on $ saving methods and tips.

congratulations, sounds like your in a winner

Our roof was repaired sometime in 1997-1998 (checking our records for the exact date). It was obviously not a great job as we had to repair them again in 2012.

The Board took the approach that this is a once in a 20 year job and it should be done “right”. We engaged Rand engineering to be our engineer and to develop specifications for the roof repairs. Our management company, Blue Woods, provided management oversight. The Board also wanted to perform every item of roof maintenance all at one time so as to not have to go back up there (for a repair) for the near future. We adopted a do it once and do it right approach.

The job entails parapet repairs, replacing the cockloft vents, hazardous material removal, replacement roof access doors, new skylights, repairs to the elevator room masonry and roofs (bulkhead), removing old insulation and re-insulating, repainting the vent pipes, some lintel repairs and a 20 year seamless cold fluid applied roof painted white. This cost $4,500 per unit and we had the funds on hand.

Well, when we opened the roof to pull out the old insulation and put in new insulation, guess what we found? We found only a very thin layer of foil and little insulation (some units had none over them). Stunned, we continued with our plan and placed 8” of new insulation and then resealed the roof.
Well the initial impact was visual. On the 10/31 snowstorm, the building which had the roof re-insulated had a layer of ice and snow on it, un-melted. The other two buildings where the re-insulating process had not been completed yet were clean and dry as a bone; you never knew that it had snowed. The escaping heat had blasted that show away.

Since then, we have turned down our boiler to the lowest setting and we have more heat in the units now than ever before. We are even getting complaints that the buildings are too hot! We are investigating heating control solutions now.

The Board is stunned with the revelation of how many dollars were wasted over the years by our lack of insulation. Our savings on gas alone may mean no maintenance increases for two years.

I guess what we learned is that was doing a repair job on the cheap, like our original roof job in 1997-1998, ended up costing us a lot in the long run.

Hi Steve,
Your building's repairs sound so similar to our proposed roof repair.
It has been proposed by our Engineer, and originally estimated at $300,000, that our 1980's, wood constuction, non fireproof building, flat roof, with cockloft vents, on Long Island, put a second roof covering on. It will be the forth and final layer before a total new roof has to be put on. Our last roof covering was put on in 1989. The roof has been leaking since at least 2005. We have sustained considerable damage to our apartments over those years.
The 4 bids came in considerably higher at between $450,000- $600,000.
And as you experienced we have no true idea what we will find, even though drill hole tests were done. They were minimal.
My question to you is. Did you evaluate the cost effectiveness of a whole new roof repair as opposed to a new last layer before you went ahead? The bids we received were on a single layer, inner-tube thickness membrane with placement of plywood and fireproofing material underneath and a 15 year NDL warranty.What are your thoughts about us considering a whole new roof as opposed to this recommendation by the architect?What was your initial budget and final monetary expense after all was said and done?We have only $500,000 in our reserve and will have to raise maintenance and the reserve to do either and maintain that very important reserve fund to draw buyers with mortages and allow us to refinance our Balloon mortgage in 2016.
Please tell all.
Dee Dee-Long Island

Did you have a point here? A message? A question? Or did you just want to vent? I got lost. I can tell you're angry and frustrated, and probably with good cause. However, I believe this venue is for people to assist one another with their coop issues, get questions answered, receive suggestions and recommendations from others having experienced similar problems... NOT to be a sounding board for inarticulate, rambling rants.

Well that is what i have been trying to do since starting here.
i want a template on bringing my management company/BOD to the right court., They refuse to provide me with the shareholders list and the financial s allowed for it the proprietary lease.

i have evidence id of a lot of failures. i asked for a template of how to bring them to court before , i got nothing, i don't need a lawyer for this stuff, and i haven't found one yet, i want to start,
i don't care if you find it inarticulate, the pictures are very articulate, The recording's i have of the president at the annual meeting stating 4 times for my recorder that he will self deal whenever he wants too, is very articulate. My calling a board member fraudulent in his listing for 10 years as the building as his residence, when he has never lived here.
i have evidence of a lot of failures. i asked for a template of how to bring them to court before , i got nothing, i don't need a lawyer for this stuff, and i haven't found one yet, i want to start.,
i don't care if you find it inarticulate, the pictures are very articulate, The recordings i have if the president at the annual meeting stating 4 times for my recorder that he will self deal when ever he wants too,is very articulate.

did you look at the pictures? That fire door lack of inspection and maintenance lies in the realm of criminal liability if someone was injured due to it. Did you see the picture of the stairwell ? is that how your building looks? would anyone here consider that proper maintenance? No ! I worked in maint for over 25 years, not building maintenance but utility maintenance, they have a lot of parallels. This Managing agent has 20 years experience In ??? is my personal guess. it is evident that his boss doesn't care, The board , is very liable , they probably have been given the wrong info on being indemnified for board decisions, , i explained to a new guy , that they are not indemnified for self dealing lack of due diligence, and not fulfilling their fiduciary duties to the co-op. They have failed multiple times times over the last couple years. Due to multiple actions of fraudulent behavior, such as changing the voting, not in accordance with the by-laws, plus 10 years of improperness by the appointment of the wife and daughter of the pres and vice-president to count the votes, and now new improprieties with the proxy votes and the handling of the proxy votes by a non shareholder, but son of the president , i see a extreme amount of problems that directly reflect my value of my co-op, including approx 50% owner occupied, but they tell the buyers it is 90% O/O and sign off on the mortgage papers from the banks That it is 90%Owner/Occupied.
So if you look at the pictures,and you think that its no big deal, your not paying for maint service, or if you provide them your standards are so low, that your in the wrong business , nor IMO be on a board, because your a liability, the proof of their failure in the pictures and violation they received from the FD , i may bring them to court so that is is paid for out of the managing company pocket. I also pointed out last annual meeting, that the contractors who are paid to remove the work debris, put it between floors, threw the tiles and debris plaster in the space above me. When a pipe broke and my super opened the ceiling to see where the water was coming from he was bombarded with tiles, that were dumped the previous contractor. They were too unprofessional to do what they were paid to do. The super or i could have been injured by the tiles and excess weight . it cost the building more money ,needlessly, since a lot of my ceiling had to be plastered,not sheet rock , a hawk with brown coat to the lathing , with a white coat, This was a professional job,.
So this is not just a rant, it is evidence of the manging company not doing the job they are paid to and given raises for the last two years,plus most likely a Xmas tip to the MA, something i find totally inappropriate The BOD not doing their Fiduciary duty to the building, plus add in all the lack of due diligence when self dealing is reported to the BOD . The BOD is required to look into all reports of self dealing by the pres and anyone else, The BOD is required to check into reports of fraud by other board members which they do not do

I have a question, which perhaps you, Eric, can answer. Or, anyone else knowledgeable about this? I live on the top (6th) floor. Last winter, while my neighbors on the lower floors had too much heat, apts. on the 6th floor got almost none (it went down as low as 57° inside my apt.) And whatever did come up dissipated almost immediately, due to the windows, etc. Last summer, the building converted from oil to gas. THIS winter, I receive more than enough heat, and it's wonderful. Do you think the conversion is responsible for this? Thanks.

It would depend on what work was done. Changing the fuel source probably had nothing to do with it. Changing or repairing the boiler controls and sensors probably made the difference.

Many proprietary leases, bylaws or house rules have provisions for late payments. If not, try to get something added. Most credit cards charge a late payment fee each month, $20-$39 is not uncommon. You could also charge a flat % of the outstanding balance - 1% each month is within reason. Charge it after your grace period is over, if you have one. If you don't add that too.
Lastly, most mortgages require an Aztec Recognition Agreement to be completed by the condo/coop. That requires you to notify the mortgage holder (bank) that the unit is in arrears, usually once they are past 90 days, to allow them to intercede, to avoid loss of lease and their collateral interest in the property. They will then pursue the shareholder as well.

I will let the bank know. On one, I don't think they have a mortgage though. I think they bought all cash years ago. Thanks

when i bought, and later bought another better apartment and sold the first and i refinanced the second since the rates had dropped,
i have all the papers still and on every mortgage there was a clause concerning the above, subletting had to be also approved by the bank , plus a number of other riders, i also remember that banks would not give mortgages if the owner occupier ratio dropped below a certain rate, and if you had a mortgage the managing company was obligated to inform the bank that it was now under the ratio. in this coop they had a late fee but they raised it, and it was on the first late payment, basically pay the coop first,or pay a big late fee. do not let the phone of electric be higher than the co-op. Also make sure it is allowed in the bylaws and proprietary lease, or they can bring you to court and get the money back , and also probably have the coop pay all the legal fees, even for the lessee/shareholder lawyer.

If possible, the board (or a couple of board members or the managing agent) should try to meet with him weekly, preferably during his working hours (does he work Sat or Sun?). Give him a letter specifying his duties and responsibilites, include 'other duties as assigned' review it with him, have him sign that he acknowledges having received a copy of it on (date). His union or your management company might have a list of duties you could use or modify. My feeling is that he should be able to do most basic maintenance needs (light electrical, plumbing, painting, plastering, etc.) as long as it is not putting him in any danger or is illegal.
Assign him new specific tasks to do each week (replace the door closer on the laundry room door, touch up the paint on 2nd floor exit door, etc.) and when you expect them to be completed, as well as give him daily tasks to perform - sweep sidewalk and street 8-8:30 am, and 3-3:30 pm, bag trash 11 am and 4 pm. Take photos of things that need to be addressed.
Make sure he has any necessary materials to do the tasks.
Next week, follow up on daily and specific tasks. If not done, why not? Add new specific tasks each week. Continue the cycle. If not done in a reasonable period of time, write him up or have the managing agent write him up for failure to perform assigned tasks or duties. Warn him that he will be suspended for a day without pay if he fails to complete task xx by (date). Then do it. Notify his union in writing with copies of the writeups and suspensions. Next time, make it two days, warn him of the possibility of termination. After a few suspensions, if he hasn't improved, terminate him.
Few of us work nonstop at our jobs throughout the day. But there is a reasonable expectation that a reasonable amount of work be performed daily, especially some task that has been brought to our attention within the scope of our job duties.

be very careful what you do it should be the managing agent and he had better know the contract or have a labor lawyer to confer with.
If you suspend a super without going through the contractual procedures , you will wish you hadn't, any duty assigned has to be within his contract and safety equipment must be provided. unless you have spent time as a craftsman has you no idea on what is required , it seems simple but it isn't. What if the area has asbestos tiles, friable asbestos, PCB carcinogens in electrical equipment . you now have a workers comp claim. i have been a steward and union for 25 years, i have also fired a union super , all the other board people complaints were thrown out by the union at the arbitration hearing for firing, they were not union people with t knowledge of grievances, mine stuck and that was the only reason he was terminated, If it was left to managing company we would still have the super since they were lackadaisical , and probably were fulfilling a favor by giving this guy a job. You will be spending , or your managing company will be spending a lot of time in arbitration, and you may lose and find out that the task requires two people, and you will pay two people what was done by one. i am not backing the guy up, i am, saying know and read the contract, problem it takes years to properly understand it. i remember how many times we would tell new mangers it was in the contract and they just gave in. we were bs them, it worked 9 out of 10 times, until they took the step and checked with labor, we got over..sometimes they looked at the contract , but it is like the proprietary lease par 14 right to occupy, most cant interpet it. "This is not a place for some one that has no labor experience to get involved. The managing agent is paid to know these things or find out, make him do his job, if he cant , you need a new MA first, that knows how to deal with it. The same would happen with us they would get a manager that knew the contract, usually an ex steward who was promoted, he stopped all the BS in a heart beat. Camera are your friend now a days, just make sure the signs are up that the building is under surveillance, and find a way ti get the pick up for the cameras fed outside the supers control. In mu building the monitors and tapes are at the supers place, so he can make sure they done provide evidence . there are way to ip the feed to the cloud without his control, and check and save the films to support your case. Install more cameras so there is better monitoring. Video wins , but you can't spy on him. But you can have camera at any common location and entrance/ exit , and one that picks up a range close enough to areas that he may slack in. They put gps on our trucks, it was the end of a good job.

never micro manage someone that knows alot more than you on the building operation. It could cost you thousands in repair work,because the super was sweeping as told while a water leak was taking place, that he might have spotted and did a patch and saved the place from damages. Or he is pissed and did spot it but it was time to sweep. that will be his secret and payback. You have to know what the union contract says his duties are, many times painting is not in there,nor is plastering. That is a different union.
you can not force nor expect him to sign anything. He has a contract, his job is listed in there. send the papers to the union,to see if they approve. He should file a grievance if you approach him with that type of stuff.
my best advice is for the shareholders to hammer the board on the problem areas of the building not being taken care of. Not because they think he is napping for a couple hours midday. He could be up working at 6am straight thru till 2pm and he has his 8 hours in , he is done, however if at 3pm and 5pm things need to be taken care of then the managing agent should work with himon his schedule, so that things are taken care of . The board should make the MA take care of the problem, if he ant ,you need a new MA, because he cant do his job and supervise him employees, .especially when the building is suffering. The MA is Failing, he should know the duties and rules in the contract. if he doesnt he fails,i have worked and been successful firing supers, inspite of the MA trying to keep him, got rid of him too. But i was lucky, the super was under one year,on probationary status, and i was a union member and steward, so i knew the game , and most importantly was to get it done before 1 year, it a suck ass job, dont get invoved if your board works correctly, they willlean on the MA, and the shareholders lean on the board, but dont be chickenpoop, document with a camera, with the correct time and date, the dirty conditions. we didnt have the digital cameras when i did it, it makes the documentation 100 % better, especially in arbitration and grievances.

We had this problem. Our Super was never in the building, and the staff would call him, and he would appear.
The Board voted that he was to be in the lobby between 8-9am and 4-5pm every Mon-Wed-Fri. Also made up a daily time sheet of duties to be checked off and handed in on Monday. All Email communications to the Mang Agent or other Sharholders were to be CCed to the Board. All reprimands from the Board should be in writing. Business-like questions to him such as why wasnt the ??? cleaned or apartment ?? taken care of or a report filed -- need to be in writing, so that if you come to the point of replacing him, you will have a record to show the Union. Once we started doing this, our super stepped up, stayed in the building and did the work. There is a lot of down time in this Job, and the building should be well-run and spotless. VP

I am President of a 111 unit co-op on the Washington Heights/Inwood boarder. We have reserves almost equaling next year's annual maintenance and have done two major capital projects without assessments or flip taxes (we had the funds on hand for one and got a NYSERDA discounted loan for the other).

We very much like Blue Woods Management. Good luck in your search!

Steve

Matthew Adam Properties is excellent. We've been with them for over five years and have been very pleased.

Thank you both so much; I will check out each of your recommendations. Our biggest problem is the dire financial straights this building is in.. we have very little (as in no) money. Do you know what you pay them annually?

Thanks again !

We have been with David Eisenstein Real Estate for over ten years and are very happy. We havent raised maintenance in many years and the building is very well kept.

Good Luck
Sam

I would contact Lovett Realty

Read the by-laws of your co-op relating cash requirements. This is where you will find out that the Board is responsible for the annual budget or establishing the cash requirements for the building for operations. Also, the paragraph may go on to state that the Board is also responsible for additional cash requirements (assessments).

Obviously, unless a co-op is self-managed, the board will work on the budget. There is no law that requires the budget to be approved or distributed to shareholders. If you own shares of a major corporation, do you get the budget for the corporation?

Some boards may wish to share the budget with shareholders and even have a discussion before approval. In this way, board members feel that they are acting democratically and involving the shareholders. It is also helpful in making shareholders realize the expenses of the building and how they are managing them.

in the co-op i am in, the board is clueless on what their job is, words like due diligence and fiduciary duties are unknown in their vocabulary, They do not know who signs and/or co-signs the checks, the name of the bank that we recently changed out maint deposits to. we were given an account number and a po box in long island, no bank name on the managing company memo. about 4 years ago the budget was off by $27k due to a dropped zero. The managing agent with 20 years experience was doing the budget for the building, and i am sure he was paid extra. The BOD pres refused to discuss the error for more than a few minutes and the next year s annual meeting i brought it up. and the meeting after that. i will always bring it up until my questions are answered properly.
Last year i saw on the auditor report that funds in out bank account were exceeding FDIC insurance at approx 50 to 70 k at a time. i brought that up ast the annual meeting and the BoD pres and managing agent said that was not so. This year on page 19 of the auditors report it said the same thing, and since the Managing agent wrote me and said he was not discussing it anymore with me , i brought it up at the annual meeting , that i was indeed correct, that i had spoken to the auditors, and they said exactly what was printed on the report, the FDIC insurance was exceeded on a number of times a year. In my co-op the MA passes false info to the board members . They do not do their due diligence, in spite of me giving them the written copies with the paragraphs circled, and they still do not question the disparity ans remain spineless. i did infoem a couple that O and D indemnification insurance does nor cover lack of due diligence, self dealing,fiduciary irresponsibility. I never ask a question i do not already know the answer too, i like to document the falsifications. The MA refuses to record the annual meeting, in spite of my non acceptance of minutes years ago. I now record all annual meetings. They dont like it. but it is my building and my hallway. This year the president stated for my microphone that he will self deal whenever he wants to and repeated it for the microphone about 4 times, to make sure i got it. priceless.I was here at conversion 25 years ago and it was about 80% owner occupied, Now it is about 50% or less , yet they tell the new buyers it is 90%
.i need to find a good lawyer in westchester. I think i have enough to have my cost and moving cost covered,




































































































































































































































































































































































































































































































































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The Budget is the most important document our Board reviews as it sets the tone for the upcoming year. I am President of a 111 unit co-op. We set aside 5 hours once a year on the first Saturday in December to review financial results from the current year, review budget strategy, set fees, approve any maintenance increases (we didn’t have any this year), review investment strategy and approve any assessments (our first one this year of 2.5% of maintenance). We also use the time to pass on the financial culture to any new Board members: not to stifle any suggestions but to give them a perspective from where the building is coming.

We are not a wealthy population however as of our December 3rd Busget meeting, we had:
• $45k in our operating account;
• $80k in mandatory mortgage reserves;
• And $714k in voluntary reserves and self-escrows.

To put this into perspective, out annual maintenance billings are $855k. We would have never had this level of success unless we planned for it ahead of time.

Who does the Budget? I do. It is done by month so we know how bad the lean times are: how much cash we need to have to which begin the heating season. I feel strongly that the Board is responsible for knowing the details of the finances and then the Board is in a better position to tell the management company what the goals are for the year.

In our building, the Board approves the Budget.

I hope this helps!