2009 July
2009 July Vol. 29, No. 7
Focus on...Budget & Finance
Low Reserves and Defaults Challenge Boards
Even in the best of economic times, preparing a co-op or condo’s annual budget can be a tiresome task, fraught with uncertainty, estimations
and shifting numbers. Factor in one of the most harrowing economic downturns in
a century, with cash-strapped owners sometimes “skipping” their monthly maintenance fees—or even winding up in foreclosure—and you have a downright daunting task.
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Shoring Up What Lies Beneath
Not so very long ago, pretty much any individual or corporate entity could get a
loan quickly and easily, with only some cursory paperwork separating borrower
from lender. The so-called subprime mortgage crisis put a stop to all that, and
banks great and small suddenly threw on the brakes and heeded the advice of
Polonius: “Neither a borrower nor a lender be.”
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Struggling to Strike a Balance
When you walk down many large commercial thoroughfares in New York, whether it’s Fifth or Madison Aevnue in Manhattan, Kings Highway in Brooklyn or Main Street
in Flushing, you’re sure to notice many more empty stores than usual—living proof of the current recession. You’ll see them on the side streets, too. Many of these stores are on the ground
floor of old rental apartment buildings or in one- or two-story “taxpayers.” But others are on the ground floors of condo and co-op buildings.
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Sidestepping Bank Foreclosures and Defaults
Unemployment is up and apartment sales are down. That’s the trend of headline news lately. But, so far, New York City co-ops and
condominiums seem to be weathering the storm in reasonably good shape.
According to those close to the situation, boards have not seen significant
increases in shareholder or owner defaults on monthly maintenance payments or
any bank foreclosures.
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Feds Seek to Boost Homeowners and Buyers
Fresh from hoisting up the banking and automobile sectors, a newly muscular
Uncle Sam is now turning his attention to putting the skids on the real estate
meltdown.
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Keeping it Healthy in Today's Tough Economy
In today’s harsh economic times, maintaining a healthy reserve fund is more important
than ever. A co-op or condo’s reserve fund can be used to cover any number of emergency expenses from sudden
repairs to legal costs. In addition, a reserve fund can be used for ongoing
maintenance projects or for anticipated future repairs.
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Energy Audit Legislation Aimed at Co-ops & Condos
Proposed legislation by the New York City Council to require energy audits, while a nice idea, is extremely cost-prohibitive especially in today’s economy. The bottom line is that the spending proposed in this bill (Intro 967) will be taken straight out of the operating budgets of co-ops and condos and not the city coffers. Read More
New Rules for Co-ops and Condos
In the last two years, Fannie Mae has amended it’s guidelines for selling and serving mortgages on condominiums, cooperatives,
and planned unit developments three times. Why should service providers,
cooperative corporations and community association managers care about what the
mortgage giant does?
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Q&A: Entitled to Tabulated Election Results?
Do the shareholders in a New York City co-op have the right to obtain the tabulated results of a board of director’s election, rather than simply the names of the shareholders that won? If you are a shareholder who is running for the board, are you entitled to know how many votes (shares) you received? Are you entitled to know how many votes (shares) your opponents’ received? Read More
Q&A: When Unit Owners Fail to Pay
Our 200-unit condo association has seven delinquencies. Six of these cases have been delinquent for over a year. Liens are in place, and all are in the hands of our attorney for collection. Most are mortgaged past fair market value, so foreclosure is out of the question. Last year we wrote off a significant amount but settled for six-months in fees from the mortgage company as per state statute. The court awarded some attorney fees, but the cost of collection exceeds the amount awarded. We moved our collections from a large regional firm to a local attorney in an attempt to cut costs. What more can we do to cut the collection costs and yet collect what is due? Read More
Q&A: Minuteless in Manhattan
“I am newly elected to the board of a small (32-unit), self-managed condominium, where traditionally there has been little transparency between the board of trustees and the unit owners. I have asked the board president several times over the past three months, publicly and privately, (as well as the board secretary) to provide me with the minutes of the last three years so that I can better acquaint myself with board decisions, the history of repairs, capital improvements, etc. I would have thought that my interest would be regarded as positive, but instead I was given the run-around. As a board member, don’t I have a legal right to inspect all corporate documents? What more should I do to access these minutes?” Read More
