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We've Got You Covered
One of the most important pieces of insurance coverage a co-op or condo building carries is its Read More
Financial Checks and Balances
Is a co-op or condo owner, protecting your building's financial stability is of paramount importance in Read More
Keeping Track of the Bottom Line
It's a typical scenario. The board and managing agent assemble for the regular monthly meeting. Things get lively and everyone participates. The group discusses staff issues, makes decisions about the tile color in the laundry room and directs management to post signs about hot water downtime. Then it's time for the monthly financial report, and a lull falls over the room. While the managing agent and treasurer launch into a discussion about year-to-date budgeted versus actual expenditures, several board membersuncomfortable with discussions involving calculations or financestune out. They flip absently through the pages of the monthly financial report to create the illusion of involvement; but, in reality, they're confused, and hopeful that the financial discussion won't last too long. Eventually the meeting moves on to a new topic and everyone is back in the loop again. Read More
The Evolution of the End Loan
Remember the early 1980s? Reagan was president, the national economy was strong, property values Read More
New Lending Options for Co-ops
In the first cold day of the season, a group of res- idents and politicians stood in front of the Read More
The New Co-op and Condo Tax Break Up Law
Co-op shareholders and condo owners in New York City may not always agree on how the common areas Read More
Buyers Checklist
For most people, buying a home is the biggest investment they will ever make. But in order to make sure it Read More
Brokers & Bankers
Nearly 100 percent of New York City co-ops have an underlying mortgage of anywhere from a few thousand dollars to millions of dollars. If you own a co-op, having an additional multi-million dollar mortgage hanging over your head might sound like an alarming prospect. You might be surprised to learn that while homeowners generally pay off their own mortgages in 30 years or less, very few co-ops have paid off their underlying mortgage. Because so few buildings have actually paid off their underlying mortgage, they are forced to refinance when the term of their current loan comes to an end. Co-op board members looking to refinance will then turn either to a mortgage broker or a mortgage banker (or lender) to lead them through the process and obtain the financing they need. Read More
Subletting Pros and Cons
The board of a co-op is required to perform an ongoing balancing act, weighing both the needs of the individual shareholders and the good of the whole. Nowhere is this more apparent than the controversial issue of subletting. While owners feel entitled to rent out their property as need dictates, the board must be concerned with the financial well-being of the building, questions of community, and quality of life. While a "no sublet" policy may create hardship for unit owners, too much undermines the building’s financial viability, establishing and enforcing a fair sublet policy can be crucial to keeping the peace. Read More
A Mortgage Primer
To paraphrase Sy Syms, "an educated board member is a lender’s best borrower!" That concept underlies all of the articles I have written about co-op financing. Since my last article for The Cooperator ("Dial ‘M’ for Mortgage," December/January 1997), however, much has changed in the mortgage market. Refinancing an underlying mortgage is the most important decision that a board will make. This one decision will not only affect the monthly maintenance of every shareholder, but also the market value of every apartment in the building. It is a decision that warrants thorough planning, careful analysis, and diligent execution by every member of the board’s professional team. No board should attempt a refinancing on its own. It is absolutely essential that the board involve every one of its professional advisors in this critical decision from the very beginning. Read More
When Sponsors Don't Sell
Before 1989, during the height of the real estate market, shareholders were buying and selling apartments at an accelerated rate. But when the recession hit the market, between 1989 and 1993, co-op sponsors (holders of unsold shares) couldn’t sell their units and began renting them instead. As a result, shareholders felt trapped; they were tied to co-ops that because of the low percentage of owner-occupants, could no longer meet the standards necessary to obtain mortgage financing. Dara Gardens is one such property that was caught in this predicament. Read More
Analyzing Financials
There are countless war stories told by real estate brokers of deals that fell apart because the buyer felt that the building's financial statement contained negative information. There is no question that it is essential to review the financial information on a co-op corporation or condo association prior to buying. However, it is equally important to create reasonable criteria for making a good evaluation. All too frequently buyers analyze financial reports on co-ops and condos in the same manner they would any other financial investment, and this is fundamentally wrong. In any other economic investment the analyzer searches for economic opportunity to create greater profit; however, in purchasing a co-op or condo apartment, economic opportunity is not an element. Rather, the analysis is oriented to ascertaining ongoing stability. Read More
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.
Read More
Taking a Bite out of the Big Apple
In most cities, traditionally, the choicest pieces of real estate are owned by native sons and daughters, people who are from the area. Money comes in from everywhere, but the entrepreneurs making that money are homegrown. Heinz and Carnegie in Pittsburgh, Ford in Detroit, and more recently, Bill Gates in Seattle. Read More
It's Budget Time
As every board member knows, a realistic budget is essential to the financial health of their co-op or condo. Creating a workable budget is not an easy task: while you can use the current year's budget as a jumping off point, many expenses must be estimated. Determining these numbers often feels like stepping into the unknown, as predicting expenses can prove difficult. Read More
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.”
Read More
New Options for Co-ops
As many readers are by now aware, a rule that proved a hindrance to the operations of many co-ops in New York was drastically altered in December of last year--and the changes are having far-reaching effects on the city's co-op communities.
Read MoreBeware of Red Flags
Consider the story of Dave. He was the treasurer for his co-op, and served the board for just over four years. Dave felt that he'd done a tremendous job—not that anyone ever noticed, much less bothered to thank him. Read More
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.
Read More
What Your Board Should Know
Co-op boards are notorious for scrutinizing potential shareholders. Condos, on the other hand, are often thought of as more lenient—and thus more desirable—by buyers because condo boards lack the power to probe too deeply into a buyer’s personal business. While this might be attractive to purchasers, it means the board has less control—and often little say—in who resides in their building. Read More
Look Out for Predatory Lending
Cons and hustles are as old as civilization itself. For as long as there have been goods and currency to collect and divide, there have been unscrupulous individuals who are ready to relieve the unwary consumer of their holdings. Banking today is no different, but it doesn't mean consumers should operate with paranoia. A healthy dose of skepticism and a pocketful of questions can mean the difference between the perfect loan and the perfect scam. Read More
Foreclosure Epidemic Skips Big Apple...So Far
Whether you own your own home or not, you can’t help but know about the subprime mortgage crisis that is sweeping across America as foreclosures are claiming people’s homes everywhere we look. Read More
What Happens When a Building Defaults?
Hard as it is to imagine such doomsday scenarios in today's more-than-robust New York City housing market, the truth is that there are plenty of buildings throughout the five boroughs that could very well be in danger of defaulting on their financial obligations. Or buildings that have members whose financial troubles will come back to haunt the board if they're not adequately handled. Read More
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.
Read More
Dealing with Special Assessments
Boston, Massachusetts may seem worlds away from New York City, but the story of one embattled condo building there represents a dire cautionary tale for boards and managers everywhere. Read More
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.
Read More
Who Makes the Cut
When the author of this story bought her home, she sat in disbelief when the lawyers handed her the last paper to sign—the one that confirmed she signed all the other papers! Read More
How Boards Deal with Late Payments
Monthly charges, including common charges, emergency repairs, lawsuits, assessments, maintenance fees, dues and so forth, are a big part of owning a co-op or condo in New York City. When an owner is late, or misses monthly payments entirely, it affects the whole building and can adversely impact the entire community. There is less revenue that month, so savings may have to be raided. Property managers have to spend time better invested elsewhere dealing with the problem. Legal fees mount. And so on. Read More
Refinancing Made Simple
Most co-op buildings carry an underlying mortgage—the cost of which is paid for each month by shareholders as part of their maintenance fees. Quite often, a co-op corporation will seek to finance a major project or building improvement by refinancing their underlying mortgage. The building's board is responsible for this major move within a co-op, and should always proceed with caution. Read More
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.
Read More
Increasing Revenue Without Increasing Maintenance Fees
In today’s economic climate, many of the city’s co-ops and condos have begun to feel the pinch as they struggle to pay their
bills. Often, buildings are forced to raise maintenance fees to make ends meet.
And while maintenance fees or special assessments might be the most common
methods of increasing available funds, they are certainly not the only ways to
do it. And when the most common options are not doable, some boards are getting
creative.
Read More
Money Makes the Board Go Round
They don’t call it “the bottom line” for nothing. When all is said and done, pretty much everything in business (okay, pretty much everything, period) comes down to money. In most business situations, a chief executive officer or a company president has the final word on money matters; the association or residential co-op business model dictates that fiscal responsibilities are shared between a building’s board and its managing agent. This complex relationship demands that managers embrace understanding, communication, and serious patience when it comes to a building’s money matters. Read More
Ordering Supplies for Your Building
Along with big-ticket items like boilers, HVAC systems, and the like, residential buildings also have to purchase lots of little, everyday things like cleaning supplies, light bulbs, and paper products to keep up with day-to-day maintenance and operations. Though not necessarily expensive in and of themselves, costs for these small things can definitely add up over the course of a year. As the ones charged with ordering and inventorying these supplies, it’s up to managers and building staff members to keep a lid on costs and be conscientious about limiting waste. Read More
Are We Immune?
For almost a year now, we have been hearing more and more about the subprime mortgage crisis. Subprime mortgages are mortgages that banks sell to borrowers whose problematic credit ratings do not allow them to get mortgages at better rates. Read More
Estate Planning for Co-op and Condo Owners
Most people would rather not talk about divorce or
death. Unpleasant as they are however, they're both facts of
life—facts that any apartment owner must face up to and plan for. In the case a co-op or condo apartment, a thorough,
legally sound plan for your property is one of the most important things to
do before the need arises. Questions over ownership and inheritance are the
last thing a grieving or separating family needs at what is already a very
difficult time. Read More
