New York's Cooperative and Condominium Community
Tom Soter in Board Operations on May 29, 2012
"That's not the right way to manage," adds David Goodman, director of management at Tudor Realty. "These buildings are delusional if they don't have a balanced budget. Because the problem does not go away."
That said, there are things you can do that legitimately make up deficits. These include:
Using income from regular fees collected for storage rooms, sublets and other items. "We capture the real estate rebate in April, we have laundry income, and we have some fees, relatively minor, for the bike room, storage room and a gym. We have some rental income from an office," reports Don Asch, president of 375-unit cond-op in Manhattan.
Buildings are delusional
if they don't have a
balanced budget. Because
the problem does not go away.
Finding additional revenue sources. Many co-op and condo buildings are proactive in hunting out additional revenue sources. "About 10 years ago, I solicited wireless communications companies, and we now have four different providers using our roof," recalls Stu Hochron, board president of the 40-unit Bond Parc Condominium in Great Neck, on Long Island. "That brings in close to $200,000 in additional revenue."
At the Brwyn Mar Ridge, a 528-unit co-op in Yonkers, the board has parlayed 68 rent-regulated units into a cash cow. They inherited the apartments 15 years ago from a defaulting sponsor. When a unit becomes vacant, the co-op fixes it up and — depending on the state of the market — either sells it or rents it. In a soft sales market, the units have brought in hefty rental fees, reports president Michael Barbara. The money has gone into maintenance and such capital projects as sidewalk repair and window and roof replacement.
Saving money through negotiating. "We look at everything aggressively: Can we get a better price? More bids?" says George Doerre, the president of the 315-unit Troy Towers condominium in Union City, New Jersey. "Our treasurer has been locking in energy prices. We're searching for innovations." Says Hochron, "Two years ago, when the economy went into the toilet, I told our regular contractors — the elevator company, the HVAC company — that if they didn't lower prices, we would put the work out to bid. Everybody came through. There were significant reductions in our annual contracts."
In the end, such common sense is not so common. Yet, as Rudd notes, raising maintenance should not raise cain among owners. It should be recognized as the prudent thing to do. "It's a fact of life," concludes the management executive. "Everything goes up every year. Everything. And that should include your maintenance."
Adds Goodman, "Sooner or later, it hits the fan, and then you have an increase of 25 percent. You can't get away from it. These are the facts of life."
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