2004 Jul
2004 Jul Vol. 24, No. 7
Focus on...Budget&Finance
The Refund Roller Coaster
With New York City rebounding from a sluggish economy and resulting budget deficit, Mayor Michael R. Bloomberg reached a budget agreement with the City Council that includes a $400 dollar property tax refund to city homeowners, who bore the brunt of last year's 18.5 percent property tax increase-the largest single property tax increase in the city's history. The $47 billion budget was sealed with a handshake between Mayor Bloomberg and City Council Speaker Gifford Miller at City Hall late in the evening of June 21st, and was promptly whisked off to Albany for approval. Legislators, however, adjourned for the summer without approving a state budget or the homeowner's rebate plan. It is expected though that the lawmakers will reconvene a summer session to approve the budget and rebate plan. Read More
Mermaids in Dreamland
Arline Zatz grew up in Williamsburg, Brooklyn, just a short distance away from Coney Island. She recalls that every summer she and her friends would take a short jaunt to the popular beach and amusement parks to lie on the sand and enjoy the day until the crowds dwindled. Read More
Expanded Owner Obligations
Effective August 2, 2004, a new lead-based paint regulation will force New York City property owners to change the way they deal with lead based paint in their properties. "Local Law 1 of 2004,"¯ overseen by the Department of Housing Preservation and Development (HPD), broadens owner's responsibilities in dealing with lead-based paint issues. The new law dramatically changes and expands upon the owner's obligations set forth under "Local Law 38 of 1999,"¯ which was invalidated by the New York State Court of Appeals in a July 2003 decision. Read More
Reserve Funds
The primary function of a board of a co-op or condo is to operate, maintain, repair and preserve the common property. The board also has a responsibility to maintain the value of the property. Read More
80/20 Vision
Say the words "80/20 rule"¯ to a New York City co-op board, and you may be met with groans and furrowed brows. A provision in Section 216 of the Internal Revenue Service (IRS) tax code, the 80/20 rule limits the amount of commercial revenue a co-op building can take in during a year to 20 percent of the building's total cash inflow. The other 80 percent has to come from the shareholders' fees, maintenance charges, or special assessments. If a building's outside income slides one percent past 20, shareholders forfeit valuable tax write-offs and abatements. Read More
Breaking the News
With today's uncertain economy and the prices of everything from gas to insurance on the rise, maintenance increases may be on the horizon for thousands more co-op and condo owners this year. Shelling out money is never a pleasure, but those increases do not always have to be painful. With a board that plans ahead and shareholders who are keyed in to the issues, those rising rates can be a simple, necessary adjustment, not a financial headache. The key, the experts say, is communication. Read More
Using Your Equity
New York City has been in the midst of a real estate boom for the last several years. Even with the economy in recession and the lingering effects of 9/11, homeowners have seen their apartments double, even triple in value in as little as five to ten years. To tap in to the ballooning equity, New Yorkers often take out home equity loans or do a cash-out refinancing. But for homeowners over the age of 62, on a fixed income, incurring an additional monthly expense may not be an attractive option. For this group of homeowners, provided that their co-op board allows it, a reverse mortgage can utilize the home's equity and provide needed cash without ever requiring a monthly repayment. Read More
Co-ops on the Rebound
Cooperative buildings should be run like businesses, with prudent investing and organized budgeting practices in place. As many buildings that have been on the brink of financial disaster can tell you, if you ignore these aspects of running your co-op, the results can be disastrous. Here we take a look back at several buildings, all of which had experienced serious financial problems, to see how they are faring today. Read More
