A New York newcomer recently became a first-time shareholder in a Queens co-op. When he decided to make some modifications to his apartment, he was stunned by the menu of non-refundable fees he would be required to pay. According to co-op management documents, minor renovation requires $250 along with a $500 security deposit, and major renovation requires $500 in non-refundable fees. The shareholder asked for an explanation, but the managing agent simply told him that there’s a fee for all renovations. “My curiosity is not satisfied,” the shareholder writes to StreetEasy. “Does this go with co-op territory? Is this standard?”
StreetEasy replies: Five hundred bucks? That’s all? Consider yourself lucky. Most co-ops require shareholders to sign an alteration agreement before making a major renovation. They then pile on the charges and fees, and the non-refundable fee is just a small part. Some typical charges:
Security deposit: This is the biggie that will blow a hole through your proposed budget. Some buildings charge 10 to 15 percent of the total budget for the renovation (others charge a flat fee — $5,000 or more), which is held to cover any expenses incurred by the building as a result of your renovation. That’s anything from scratching the wood panel in the elevator to damage to the plumbing.
Managing agent: The building manager will review plans, process various forms, check on contractors’ insurance coverage and coordinate schedules, all of which will be charged to you.
Architect: A major renovation will almost certainly require review of your plans by the building’s architect or engineer. Depending on how much work you’re having done and how it may affect the rest of the building structure, you could be looking at more than $1,000 for the professional review.
Cleaning: Although work crews will be required to clean up hallways and other common areas at the end of each day, many buildings tack on an extra $50-$100 a day to cover any extra work required of the building staff.
Late fees: Typically, a building will set a time limit on a project – say 60 days. If the job goes into the 61st day, the building may start fining you. Fees of $100-$250 per day are usual, and you might see $1,500 per day in some tonier Manhattan buildings.
Once the work is complete, the shareholder might decide to sublet the apartment. If so, there will surely be sublet fees. At a large co-op on the Lower East Side, the current policy forbids shareholders from subletting their apartments during their first two years in the building. After that, the shareholder pays a fee equal to 100 percent of maintenance for the first two years of a sublet; 112.5 percent for the second two years; and 125 percent every year after that. But the high rents New York City apartments fetch today make the fees worth it to shareholders. Those fees generate more than $700,000 of the co-op’s annual operating budget of $25 million – not an insignificant contribution.
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