The Meter is Running
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Ever-changing city regulations mean more fees for co-ops – and more money from shareholders.
AUTHORSami Najjar, Partner, Sandra Greer Real Estate
PAGE #pp. 82-83
How can you lessen the pain for shareholders who have to pay for projects mandated by new city regulations?
In the past 10 to 15 years, the city has imposed an ever-increasing collection of rules and regulations. Meeting these obligations is a big challenge for co-ops and condos, which are often struggling to find money to pay for projects mandated by the city. We manage a condo that found a way to pay for needed work and make it palatable for the unit-owners.
The problem with assessments is that they are usually large and unexpected, not allowing unit-owners to budget for the expense. To counter that, the board and the treasurer came up with a long-term assessment plan, in which the upfront amount would be drawn from the reserves, and the unit-owners would spread the repayment over a long period. Even after the reserve fund is replenished, unit-owners still pay small increments every month, which allows the board to collect money for future obligations. This way, there is no need to hit unit-owners with hefty assessments in one shot. In effect, it is a standing assessment.
Planning ahead is a major factor. Proper planning is a must. We can always do these small assessments spread over time and make things go more smoothly for everyone.