New York's Cooperative and Condominium Community

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Point and Click

Paying monthly building fees just got easier with point-and-click maintenance-payment facilities now offered by several property-management companies around New York.

Co-op and condo owners have long had the ability to pay maintenance by preauthorized debit, a check sent on a predetermined date by their bank, or physically mailing a handwritten check. But mail can get lost, and some shareholders are averse to third parties accessing their bank accounts at will.

“Point and click” changes all that. It utilizes an electronic lockbox, or an “e-lockbox,” by clicking an icon on the management company’s website allowing the shareholder to control the date of the payment and the amount. Better yet, payment can be made without a payment stub.

“It’s a technological breakthrough,” says Larry Kinitsky, president of the 1,850-family Windsor Park cooperative in Bayside, Queens. “You can control the payment and get it there when you want it to. It’s unbelievable.”

Kinitsky, whose co-op is managed by AKAM Associates, says his experience indicates the payment leaves his account almost immediately and is quickly swept by AKAM into the building’s bank account. “There is no possibility of a late fee [to the shareholder], and it gets to the building faster so the co-op has the use of the funds sooner,” Kinitsky notes. “As president of the co-op, those are two things that concern me.”

Kinitsky says the service had only been available for a few months but expects it to gain popularity quickly.

Gerard J. Picaso, president of Gerard J. Picaso Inc. who manages 48 buildings across Manhattan and Queens, says 70 percent of the people in his buildings now pay electronically, whether by automatic debit or point-and-click on the website.

Picaso says the advantages of point-and-click payment are widespread. “A lot of the people who send in maintenance don’t send in the bill or send in the wrong amount and that gets kicked back to us,” the manager says of the traditional check mailing method of maintenance payment. Using the website to transfer the money, “they control the amount of money and control the date,” he says. “The disadvantage is you have to do it every month. With the automatic debit, you set it up and it’s done.”

Lonny Alpert, chief financial officer at AKAM Associates, which manages 90 co-ops and condos across Brooklyn, Queens, and Manhattan, says the AKAM online-payment program using point-and-click is the fastest way for a building to collect its maintenance or common charges and reduce the possibility of arrears. Typically, there is no more than a 48-hour waiting period to see the payment posted in the building’s books. “From AKAM’s perspective, there is more working capital to pay vendors in a timely manner,” he adds.

AKAM, which is rolling out point-and-click in stages, uses third-party vendor E-Tran (a subsidiary of Data Impact Corp.) to facilitate the payment between the shareholder and the collecting bank.

“A lot of tenants didn’t like giving us authorization to take their money,” says Makhan Taylor, assistant controller at AKAM, comparing point-and-click to direct debit. “They didn’t feel like they had control using a preauthorized debit. Now the individual has the opportunity to designate what they want and pay it. It comes out ahead of preauthorized debit.”

One concern to some shareholders in an age of widespread identity theft is giving up bank details to a website even though the link they click will typically bear the logo of the bank used by the management company.

Scott Skorobohaty, senior vice president of the Business Concierge Group, North Fork Bank, a division of Capital One, says a shareholder’s bank information is stored on a server with E-Tran. The bank has agreements with E-Tran to protect and secure privacy. “For all appearances, shareholders are dealing with North Fork Bank and their managing agent,” Skorobohaty says.

Windsor Park’s Kinitsky says the security angle should not be a worry. “Because you are giving [bank] details to a secure site and a reputable company, it does not really concern me,” Kinitsky says. “It is no different from making a purchase and giving your credit card number to a third party over the phone.”

Dan Wurtzel, chief operating officer at Cooper Square Realty, which oversees 40,000 apartments in New York City, says 30 percent of his clients now use some form of electronic maintenance remittance. Cooper Square utilizes “KliknPay,” offered by Klik Technologies, as its third-party e-lockbox. “We can’t access any of the information on our shareholders that sign up for KliknPay,” says Wurtzel. “We can only confirm they have signed up. We have no information on their bank or their password.” (Klik Technologies did not respond to a request for information.)

An e-lockbox service is usually paid for by the real estate management company earning credits on deposits, says North Fork’s Skorobohaty, so there is no cash outlay. Earnings credits are effectively paid like interest for the bank having the use of the cash. With co-ops typically following the lead of the managing agent as to which bank they use, that amount of cash can be significant.

Skorobohaty says a self-managed building can theoretically use the same web-based point and click arrangement but smaller buildings may not generate enough fees to make it cost-effective. “There is a point where it is cost-effective and one where it is not,” he notes. “Four units is not cost-effective.”

North Fork’s e-lockbox with point and click currently has eight management clients and another three to five in the pipeline. It takes 30 to 60 days to set up.

Tammie Calys, vice president of sales for Data Impact, says expectations of migration from check payment to electronic payment, primarily through point and click, are 50 to 60 percent over a two-year period.

“As far as I can see, there are no complaints,” says Charles Bayor, president of the co-op at 200 East 36th Street, of AKAM’s On-Line Payment Program. “It seems to be working smoothly.”

Cooper Square’s Wurtzel though says while electronic maintenance payment is popular, they have not yet made it the only way to pay.

“We are in a service business and have to offer a range of options,” Wurtzel says. “The only thing we don’t do is cash.”

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