Assessments vs. Maintenance increases and the Demographic Time Bomb
Hi All,
As board president of a 57 unit co-op in the Bronx, we have really made some changes over the last few years. Much of the heavy lifting remains and as we start to plan, a heated debate has come to a head in our co-op which may impact many co-ops city wide. Read below; let me know your thoughts.
Our Metrics:
Our co-op: 1986
Units: 57
Units still owned by sponsor: 29
Leaving 28 units in purchasing shareholder hands.
The majority of the purchasing shareholders, originally purchased apartments from the sponsor over the last 20 years at considerable discount – we are talking about 3&4 bedroom apartments with 2 Bathrooms and terraces for under than 250K. Our maintance charges have always been low, considering original offering plan common charges, lack of increased, and neighbourhood (Riverdale) comparison. Consequently the building has not been maintained at the highest standard.
I purchased in 2008 and joined the board several years ago, becoming president last year. We implemented a new storage amenity, and remediated a garage where some people didn’t pay monthly charges. We also had our first capital assessment last year and a capital assessment this year to support ongoing capital work. Operationally we have seen three years of positive net income.
Now we have some major work to do, facades, elevator (already in planning), roof, terrace work, and plumbing. The Board of the co-op are thinking about implementing a rather large monthly assessment that would raise $125-150K next year. The largest assessment charge would be $214 a month on one apartment – the remaining apartments would pay $120 - $198 – depending on how many shares.
We have no ability to refinance until 2013 due to our loan provisions signed 9 years ago. We have a small credit line, which NCB has indicated they would increase, but not on the scale we need, they suggested assessments.
Our plan is public within the building, and we have received support from some shareholders.
But we have an issue – Demographic time bomb –
The average age of our purchasing shareholders is approximately 60.3 years old.
Many of our co-op residents are original purchasers from 20+ years ago, and are now in retirement or close to it. Even if they have the ability to pay, these shareholders are not happy, and feel new board members are trying to make the building “fancy”. We have received the speech “this is the way it’s been forever” from many, especially shareholder who indicated that they have no intention of selling, and therefore may not realize the appreciation.
We explained in detail about how we are boosting value, and that the assessments are capital calls for the corporation raising funds from all members to increase the satisfaction, safety, and enjoyment for all shareholders and to meet regulatory requirements.
Alas we have gone as far as to have several local realtors speak to residents – about what other buildings have done, but continue to receive pushback.
I am worried, and want to hear your thoughts. We have a beautiful building, great location, and wonderfully oversized apartments. The potential here is a diamond!
But with the demographic age increasing, the ability to raise funds is becoming challenged. We have no turnover from sponsor or purchasing shareholders (No apartment are listed today for sale, last sale was in 2008). Additionally, installing amenities that will increase our value have become contentious (for example: We may install a playground area, missing for more than 30 years, this would attract new families to our large apartments, and increase the satisfaction for some with kids). But no interest. Let’s not even go down the road of new windows, hallways, or lobby.
The board is split, and yet we are so close to realizing some of our potential, what do you think as co-op members, board members, managing agents, and interested parties?

Assessments vs. Maintenance increases and the Demographic Time Bomb
Hi All,
As board president of a 57 unit co-op in the Bronx, we have really made some changes over the last few years. Much of the heavy lifting remains and as we start to plan, a heated debate has come to a head in our co-op which may impact many co-ops city wide. Read below; let me know your thoughts.
Our Metrics:
Our co-op: 1986
Units: 57
Units still owned by sponsor: 29
Leaving 28 units in purchasing shareholder hands.
The majority of the purchasing shareholders, originally purchased apartments from the sponsor over the last 20 years at considerable discount – we are talking about 3&4 bedroom apartments with 2 Bathrooms and terraces for under than 250K. Our maintance charges have always been low, considering original offering plan common charges, lack of increased, and neighbourhood (Riverdale) comparison. Consequently the building has not been maintained at the highest standard.
I purchased in 2008 and joined the board several years ago, becoming president last year. We implemented a new storage amenity, and remediated a garage where some people didn’t pay monthly charges. We also had our first capital assessment last year and a capital assessment this year to support ongoing capital work. Operationally we have seen three years of positive net income.
Now we have some major work to do, facades, elevator (already in planning), roof, terrace work, and plumbing. The Board of the co-op are thinking about implementing a rather large monthly assessment that would raise $125-150K next year. The largest assessment charge would be $214 a month on one apartment – the remaining apartments would pay $120 - $198 – depending on how many shares.
We have no ability to refinance until 2013 due to our loan provisions signed 9 years ago. We have a small credit line, which NCB has indicated they would increase, but not on the scale we need, they suggested assessments.
Our plan is public within the building, and we have received support from some shareholders.
But we have an issue – Demographic time bomb –
The average age of our purchasing shareholders is approximately 60.3 years old.
Many of our co-op residents are original purchasers from 20+ years ago, and are now in retirement or close to it. Even if they have the ability to pay, these shareholders are not happy, and feel new board members are trying to make the building “fancy”. We have received the speech “this is the way it’s been forever” from many, especially shareholder who indicated that they have no intention of selling, and therefore may not realize the appreciation.
We explained in detail about how we are boosting value, and that the assessments are capital calls for the corporation raising funds from all members to increase the satisfaction, safety, and enjoyment for all shareholders and to meet regulatory requirements.
Alas we have gone as far as to have several local realtors speak to residents – about what other buildings have done, but continue to receive pushback.
I am worried, and want to hear your thoughts. We have a beautiful building, great location, and wonderfully oversized apartments. The potential here is a diamond!
But with the demographic age increasing, the ability to raise funds is becoming challenged. We have no turnover from sponsor or purchasing shareholders (No apartment are listed today for sale, last sale was in 2008). Additionally, installing amenities that will increase our value have become contentious (for example: We may install a playground area, missing for more than 30 years, this would attract new families to our large apartments, and increase the satisfaction for some with kids). But no interest. Let’s not even go down the road of new windows, hallways, or lobby.
The board is split, and yet we are so close to realizing some of our potential, what do you think as co-op members, board members, managing agents, and interested parties?

Con Edison will pay 70% of the project cost for the installation of an approved BEMS in buildings with 75 or fewer units. The incentive amount is capped at $20,000.00. Average out of pocket for a building in this range is about $7,500.

They are covering 50% of the project cost for installations of BEMS's in buildings with 76 or more units. There is no cap on this, yet most projects result in out of pocket expenses of less than $18,500.00.

If buildings under the same management company pursue similar projects the cost per system is reduced thus enhancing the impact of the investment.

as stated in proprietary lease i am allowed to look at the books with notice. i have requested in writing, and i have also requested the name and contact info of shareholders. The Managing agent has refused me and the board president has also. The rest of the board are puppetry and do- say nothing. i also requested a contact info of board members and have been refused, and some of the board members do not , and never have lived in the building, even though fraudulently they say they live here.
i need to start the process, i don't have money for a lawyer, i am sure i can do it myself at this level. The managing agent also wrote and stated that i cannot have any more dealings with him since i asked for the shareholder list and asked questions about the mortgage in 2008. since no BOD contact info and MA saying go away, i will just be knocking on doors, calling apartments if possible when i have a question.
i do want to start the subpoena process , i am not sure what court in westchester that this goes before. i am also disabled, maybe there is a help unit. i have to finish writing my politicians to see if they can help, i did send 7 pages to the AG office and i need to mail in about five more, A lot of shaneggians i uncovered. I have the proprietary lease and by laws scanned and on my computer now.
It should be law that they provide the annual financial report in a spreadsheet, the same way they do it at their office. Much easier to find the Pig with lipstick. I "ll ask the judge for it in a digital format

Are all your apt units built over garages or connected to a garage in multistory buildings being told to install carbon monoxide detectors? Also years back the co-op installed a smoke detector in one hallway in every apartment.
this month we received a letter stating that we had to install a smoke detector inside every bedroom and outside every sleeping quarter in accordance with NYS law, it said this was the residential code of NYS and fire code of NYS. The co-op installed the first one, and now is saying it is now the share owners responsibility. I bought two new smoke and a CO detector long before i got this letter. I know this building would go fast, had a FF tell me that. Knew a whole family that got killed thanksgiving weekend due to a clogged flue in their Pocono country house. However I still cant see how CO could get up 6 floors , i know the areas by the radiator pipes it could, i sealed all mine off for proactive pest control, the keyhole on the interior closet door frames have a pretty powerful breeze coming out of it, it must be from the roof. On a windy day i can really feel it, i am going to seal that off too. weird though, don' t remember that breeze for the first twenty years here. I am on the 6th floor the garage is under the first floor. If i lived on the first floor i would have had a CO years ago
On the form we have to sign and initial all kinds of stuff, that we agree to test it once a month,They don't check the smoke detectors in the hallway once a month and during blackouts, many of the emergency lights don't work. i guess i will check all the emergency lights and when i return the papers give them a list of the emergency lights that fail the self test. people complained about that at Junes annual meeting, see if they did anything yet. New batteries are needed and spares should be on standby.

Do any of the Vendors sub-meter the electic service and pay Con Ed directly?

Has anyone signed up for this service? If so, your comments please.

Habitat is working on a story about "full-service" vs. "a la carte" management companies -- those with higher flat fees that cover most things, and those with lower fees that charge extra for specific services. We've heard of firms charging boards $1 for every letter they send.

If you have anecdotes that could help other boards avoid mistakes or just know what to expect, please contact me at flovece@habitatmag.com. Thanks!

My recent post was about Con Edison. On the flip side if your building is in National Grid territory the turn around time on a load request submission is less than 1 week....compared to Con Edison's minimum 6 to 8 week turnaround time.

If you want to convert from #6 oil to gas and/or #2 oil and you are in National Grid territory there is a good chance that the entire project can be completed before those in Con Edison territory even know if a conversion is possible.

Have a great weekend.

Please be advised: If you are contemplating making the switch from #6 heating oil to natural gas; either as your primary fuel or as a backup to #2 oil and your building is in Con Edison territory you will wait a minimum of 6 to 8 weeks for a response to your load request submission. At this point, if they confirm the availability of sufficient gas and pressure, and can bring it your building at no charge, this conversion project will not get underway at the earliest until late October.

Here's what you need to do:
1) get the load request in asap.
2) get 3 to 5 gas conversion proposals NOW so that when Con Ed. does render a decision you are all set to take action...as opposed to first starting the proposal process.
3) Work with a company that is an approved market partner in Con Edison's Multifamily energy programs...it is not required, yet it gives you peace of mind that the companies financials, licenses and professional history has been screened and vetted by a 3rd party.
4) Don't worry....gas conversion projects can be executed in the winter. Service will be interrupted for about 3 hours when the transition is formalized.

Do what you can now in anticipation of Con Ed. approving your project...even if it takes them until October.