In this challenging economy, many co-op and condo buildings are struggling to pay their bills while planning for future needs. Still, most building boards are loathe to raise maintenance fees or levy special assessments on their residents unless no other options exist. And while sometimes a fee increase is inevitable (and may even be long overdue), often there are other ways for buildings to increase their revenues. Knowing when to do one, or the other, is a matter of prudent planning.
Some of these alternative sources of funding—such as allowing advertising space to be leased on a building’s facade—are fairly obvious. But others are less apparent, which is why it’s smart for a board to involve professional consultants in such matters.
When a community is strapped for cash, it can be tempting for a board to create new fees, raise maintenance fees, or enact special assessments. It might seem like the path of least resistance—money is needed ASAP, and raising a fee might seem to take care of the need. But often such moves are contentious and sometimes they require a vote of the board of directors, which doesn’t always end in unanimity. Whether or not such a vote is successful, it is a short-term fix at best to what could be a chronic cash flow problem. Other solutions are needed.
Some of the most common avenues of revenue generation in co-op/condo buildings include renting the building’s exterior spaces out to advertisers, or putting telecommunication booster antennas on the building’s roof. That’s fine, for buildings blessed with the physical space to allow such advertising. In such cases, a building’s board might want to consider if they can fit more antennas on the roof if they already have some, or to allow more advertising.
“Buildings should investigate what the opportunities are for their roof,” says Annette Murray, a CPA and shareholder with Wilkin & Guttenplan, PC, a New York accounting firm. “They could have air rights for the space above the building.” The board of directors could contact Verizon, Sprint or other telecom carriers to gauge interest in the building’s rooftop. Such a cell phone carrier might do a survey of the roof and make a proposal to the board to erect an antenna on it.