Planning for the Worst Smart Strategies to Avoid or Delay Assessments

 Tsunamis, earthquakes, tornadoes—these are just a few of the devastating disasters that have made headlines  already in 2011 and the emergency situations that resulted many never thought  possible.  

 As the past year’s calamitous snowstorms, earthquakes, and even dreaded bedbug infestations have  demonstrated, sometimes you just can’t plan for everything, and that’s especially true when you are living in a co-op or condo.  

 Any financially solvent co-op or condo building has both an operating budget to  cover day-to-day expenses associated with running the building and a reserve  fund that’s in place to pay for larger repairs and capital improvement projects. But what  would happen if something devastating were to happen?  

 “The best thing a co-op/condo can do is to prudently take care of hazards or  developing hazards at the building, mitigating risk,” says Todd Ross, president of Manhattan-based TM Ross Insurance Brokerage, LLC. “Putting in place proper risk transfer documents between the building and  contractors that enter the building or between unit owners and their  contractors, enforcing the requirement for unit owners and [general  contractors] to have proper insurance, and to sign proper contract with hold  harmless and indemnification provisions, are things a building can do to manage  risk.”  

 Smart boards will prepare and plan financially for a worst-case scenario, say  the pros. Building some ‘wiggle room’ into a building’s budget can help fill the gaps between operating and capital expenses, and can  spare residents from huge assessments and/or maintenance increases.  


Related Articles

Paying off Underlying Mortgages

The Pros & Cons

An Antidote to NYC’s Affordable Housing Crisis?

Mandatory Inclusion Policy Has Its Share of Criticism

Everything You Wanted to Know About Jumbo Loans

How Are They Different From Conventional Loans?