Money grab. The biggest economic surprise happened about seven years ago, when all of our reserves were stolen by the accountant at our management company. In 2010 the building went from rental to condo, and we started with a healthy $100,000 reserve from the sponsor. We also inherited the building’s management company, but when it closed in 2012, the board brought in a new one. A few years later the owner contacted us and told us that their longtime accountant had been skimming money from 25 of the 30 buildings managed by the company — about $750,000 in all — including ours. Instead of depositing maintenance checks into buildings’ separate accounts, she deposited them into her personal account and doctored the bank statements.
Emergency meeting. The board met that day, and we tried to figure out how this could have happened. One of our members contacted the other buildings she had stolen from, and we went to the Brooklyn district attorney, who got involved in the case. In the meantime, we were left with nothing. We got a new management company, which informed us that we didn’t have the correct insurance policy that would have covered the loss. Fortunately, we did not have any upcoming projects that we needed the money for. But unit-owners who wanted to sell their apartments were stuck, because no bank is going to lend to a potential buyer if the building doesn’t have any reserves.
Starting from scratch. We decided to do an assessment to build the reserves back up,
and in three years we had nearly $50,000. We also sued the old management company and got another $25,000. Now that there’s money in the bank again, we’re looking into fixing our roof, because there’s some water leakage. We’re still deciding if we want to do just patchwork repairs, which would cost about $40,000, since doing the whole thing would cost $400,000, which we can’t afford. Still, a smaller job would put us in special assessment territory. We’ll probably do a three-year assessment and offer people a little bit of a break if they can pay it all upfront.
Board secretary (3 years)
427 St. Johns Pl., Park Slope, Brooklyn
Years of board service: 7
Year built: 1912
Operating budget: $93,000
Ongoing assessment: Yes
Common charge increase: 3% in 2020
Property management: Choice New York
Accountant: Lesley Mozeson