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Finance
Need You Know More?
With mortgages as common as they are today, most borrowers know the standard steps in securing a loan for a condo or co-op. In the simplest terms, a borrower must first pick a lending institution, be it a commercial bank or mortgage banker. After that comes the application process, during which requisite financial and employment information is provided to the lending institution. After approval, borrowers close on the loan. From here, the only thing most borrowers are concerned with is making their required monthly payments. Read More
Co-op Share Loan Financing
The economic boom of the last few years has been a remarkable period of prosperity for the real estate industry in general, and co-ops in particular. Shareholders no longer need to feel trapped; the time is now for co-op boards to tackle the share loan financing issue. Read More
Are We There Yet?
Out of concern over escalating property taxes, The Action Committee for Reasonable Real Estate Taxes was formed in 1990. Created by The Council of New York Cooperatives and Condominiums (CNYC), the committee uncovered a gross disparity between the taxes paid by co-op and condo dwellers and those assessed to private homeowners and decided to do something about it. Read More
Moving in Together
You’re unmarried, but you want to buy a co-op or condo together. What do you need to know? Will it be difficult winning the board over? How do you plan for possibilities you’d rather not consider, like breakup or death? The decisions you make today may have you thanking yourself–or wondering what were you thinking–somewhere down the line, whether or not you stay together "till death do you part." Read More
Reduce Variable (and Fixed) Costs
All board members should be involved in the budgeting process of their building. However, board members come from a wide array of professional backgrounds, and often lack experience managing large budgets and do not know how to effectively cut costs. Andrew Hoffman, principal of Hoffman Management in Manhattan, and Ted Procas, chairman of the board of the Association of Riverdale Cooperatives and executive board member of the Council of New York Cooperatives and Condominiums (CNYC), offer many insights into ways that costs can be reduced–not just the costs that are traditionally considered variable, such as supplies and maintenance, but also costs that most people consider fixed, such as labor and taxes. In fact, Hoffman says, "There is no real difference between variable and fixed expenses." Read More
Sponsor Problems?
The numerous, rapid conversions of the 1980s resulted in many cases of sponsor default in the early ‘90s. But as the number of building conversions slowed in the ‘90s, it seems that potential conflict between shareholders and the sponsor may have disappeared as well. Today however, though no longer as abundant, problems still occur, and shareholders and board members alike need to be aware of difficulties they may face when sharing the building with a sponsor. Read More
The Finance Officer
A good treasurer is crucial to the well-being of any co-op or condo. Unfortunately, the position is, without a doubt, one of the most challenging offices to hold. Carl M. Cesarano, CPA, a partner with Cesarano & Khan PC in Rego Park, Queens, says treasurers are the eyes and ears of the co-op or condo. "The treasurer should be the watchdog of the entity that collects cash and pays bills." They should be familiar with the expenses of their building, in addition to any miscellaneous expenses that arise and should keep watch over how the managing agent spends the residents’ money. In turn, the treasurer organizes the information and must keep the board informed as to the building’s financial standing so that this information can be disseminated to the shareholders or owners when necessary. Read More
A Second Chance
While the real estate market today is going strong, there are still buildings facing financial troubles. Many of these are victims of the collapsed real estate market of the late 1980s and early ‘90s. The market may have dropped after the conversion of a building, and subsequently the sponsor was not able to charge the rents necessary to meet his maintenance obligations. Eventually the sponsor defaults. It’s then up to the co-op to make the payments, but they are in no better position than the sponsor was. With no cash to refurbish empty units for rental or to do even basic building repairs, the situation worsens. It can be almost impossible for a co-op to pull itself up by its bootstraps once it’s headed for foreclosure. Read More
Correct and Collect
Vincent DiCeglio worked for the Long Island Lighting (LILCO) company for 24 years as a customer service representative. During that period, he discovered numerous errors on clients’ bills, and felt that consumers could use an outside advocate to obtain refunds. In 1976, he took a leap of faith and created his own utility auditing company, Urac, in Rockville Centre, New York, which analyzed bills and recouped appropriate refunds. "I figured that if I could find mistakes at LILCO, then Con Ed and everyone else must have mistakes," he recalls. As it turns out, he was correct. His and the other utility auditing companies that have sprung up since then have recovered millions of dollars for their customers. Read More
Translation, Please!
Whether you’re a co-op or condo owner or on your building’s board, you are considered a primary user of the property’s financial statements. As such, you should definitely make it a point to understand what you’re looking at–to not only be aware of the financial health of your building but to discern certain trends and relationships and anticipate the future. Other users include potential buyers, lenders, vendors, taxing authorities and insurers. As a result, financial statements are meant to present condensed organized summaries of extensive detailed financial information. Read More
Reducing Costs
Many expenses, small and large, are involved in the process of managing a residential building. A majority of these are unavoidable, such as mortgage payments in the case of a co-op, utility costs and payroll; however, when large sums of money are being dealt with, it is easy for unnecessary expenses to slip by unnoticed. As a means of protecting both a building’s budget and the quality of life for its residents, boards have a responsibility to keep costs as low as possible, without making choices that will sacrifice services that residents rely on. Fortunately, it is possible to reduce costs significantly by implementing a well-thought-out system for monitoring expenses and securing the cheapest, high-quality goods and services available. Read More
The Best Way to Grow
All healthy co-ops or condos possess healthy bank accounts. One way to make sure that financial glow stays bright is to infuse it with extra income, above and beyond the usual monthly fees and payments. There are a number of options for bringing extra revenue into the financial fold. The possibilities range from converting unused space into health club facilities, to turning your building into an advertising "star." The options are limited only by board member creativity (and a tax code or two). Read More
The Cooperative Century
Quick: the first residential co-op was created in (a) 2000 BC (b) the 1700’s (c) the 1800’s (d) the 20th century. Now, don’t laugh off choice "a," 2000 BC. While there doesn’t appear to have been co-ops quite that far back, there are records of condominiums. It might be tempting to choose "d," thinking that the notion of popular "cooperation" must surely have its roots in the culture and politics of the 1960’s, but you’d be wrong. The first known co-op in the world was brought into being after a large fire created a serious housing shortage in Rennes, France in 1720, as explained by Richard Siegler and Herbert J. Cooper-Levy, member and former member of the National Association of Housing Cooperatives (NAHC), respectively, in "Brief History of Cooperative Housing," an article in a volume of NAHC’s Cooperative Housing Bulletin. Read More
The Self-Amortizing Loan
What a time to be shopping for a new underlying mortgage! Interest rates are Read More
Detailing the Dollars
Thinking about your co-op or condo as a financial entity doesn't produce the same warm feeling as thinking Read More
Real Estate Tax Abatement Update
In June 1996 the New York State legislature addressed the long-acknowledged inequity in real estate taxation between co-ops Read More
Investing the Reserve Fund
If you were walking down the street and spotted a $100 bill on the ground, would you stop and pick it up? Of course you would, Read More
Recovering Legal Fees
Earlier this year, a survey of co-ops and condos indicated a surge of litigation between boards and building Read More
New Ruling on IRS 277
Cooperative housing corporations are not exempt from income taxation. Like any other taxpayer, a housing Read More
Amending Your By-laws
The certificate of incorporation, the proprietary lease (in some cases called occupancy agreements) Read More
Capital Improvements
If you've ever served on the board of a co-op or condo, the phrases capital improvements, emergency repair, asbestos remov- Read More
Dial "˜M' for Mortgage
With interest rates heading lower once again, now may be the ideal time to start Read More
Relocation & the Board
Even at the most stately Park Avenue address, relocation is a frequent activity as apartments are bought Read More
Tax Abatements Are Good News,
The City of New York, in its infinite wisdom, has classified properties into various categories. Class one Read More
Converting to Condo
In New York City cooperative apartments outnumber condoM-miniums by about five to one, so apartment buyers sometimes feel Read More
Underlying Mortgages
The financing of your co-op's underlying mortgage is one of the most significant factors in the fiscal Read More
A Six-Step Program for Boards
In 1991, the American Institute of Certified Public Accountants (AICPA) issued its Guide to Audits of Common Interest Realty Read More
A Six-Step Program for Boards
In 1991, the American Institute of Certified Public Accountants (AICPA) issued its Guide to Audits of Common Interest Realty Read More
Protecting Your Property's Assets
Co-ops and condos operate on significant budgets, usually in the hundreds of thousands of dollars, Read More
Financing Work in Condos
You live in a condo, and the building has come of age. The facade needs a little work here and there, and Read More
A Windfall for Sellers
As the year draws to a close, many Americans are still trying to grasp all the revisions in the tax law Read More
Refinancing End Loans
It seems as though everyone is talking about refinancing these days. With interest rates at an all-time low, more and more Read More
Lost & Found Money
Wouldn't it be nice to save your building thousands of dollars without doing any work? Well, there Read More
Rooftop Decks, Exercise Rooms and Play Areas
Co-op and condo owners whose boards are in favor of adding a rooftop deck, exercise room or play area should think twice before shooting down the idea for fear it will be too expensive. Imagine the time you'd gain in your busy schedule if you could do your daily workout right downstairseven better, if you could drop your child at an indoor play area right next to the exercise room. In many co-ops and condos the rooftop is underutilized. Wouldn't it be a luxury to be able to go upstairs to a rooftop deck or garden to catch a few rays and enjoy some outdoor time? Read More
Making Money
Money. We all need it and want more of it. And just like any business your building needs to cover Read More
