Is It Really Necessary to Increase Maintenance Fees Every Year?

Aug. 10, 2015 — Annual maintenance increases are an extremely important strategy to keep up with cost-of-living increases, which we face every year. Since overall operating expenses never seem to decrease, annual maintenance increases allow us to be proactive in planning to cover these expenses.

One of the co-ops we manage, 21 Fort Washington Avenue, a Housing & Development Finance Corporation building, implements a minimum 2 percent increase every year to maintain financial stability. Thus, even if our projected budget does not call for an increase, it is important to stay consistent and maintain the increase.

Also, it is much easier to communicate a 2-percent increase per year than a 15 to 20 percent increase every 10 years or when the co-op is in financial distress. Shareholders understand the need for these increases and it allows the building's accounts to maintain a positive cash flow throughout the year.

Joseph L. Bavaro is senior vice president and director of property management at Finger Management.