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10 years with no cost of living adjustments? According to BLS CPI, 2010-2020 saw a 19.2% increase, so 7% is more than reasonable. The $800 also seems very reasonable given that it's the first time in 10 years they have had any special assessments. I do understand that it's a tough pill to swallow, particularly right now, but it seems to be on the conservative side. I am not seeing any COVID upcharge here.
In the future, you can opt for either higher regular fees or prepare yourself for larger special assessments.
This community IMO, has been managed very poorly by the board. Including this one, there have been two assessments in 10 years and no fee increases at all. Having lived in a co-op and now in an HOA, you need to do your due diligence before you leap to buy a condo, co-op or in a HOA. Personally, no increases would have scared me enough that I would not buy there. The reasons (among others) for no increase and assessments might be the need to keep the fees at bay since the competition might be make your place unsalable, poor management of finances by the board, or bad documents that hog tie the hands of the board. In any of these cases, I would never buy in.
People make the mistake of assuming that no increase means well managed. IMO, every community should implement at the very least a COLI annually and have a reserve study done every 5 years.
The assessment for roofs or other big capital improvements is not unusual. You don't say how many units there are in your complex, but roofs, if replaced completely and not just repaired or resurfaced, are very expensive. Roofs and roads are two of the biggest necessary expenditures. But they are good for 30 years so, if your roads are in good shape, you shouldn't have to worry about being assessed so heavily again for a very long time.
As for the 7% maintenance increase -- You probably wouldn't be aware of it, but if there are other unit owners who have defaulted in paying their maintenance, which is not unlikely due to the Covid situation, then everyone else has to pick up the slack. It's unfortunate that the paying owners have to carry the burden, but it's the reality of coop/condo life. Insurance rates also go up every year, as does everything, and if you haven't had an increase in the 5 years you've been living there, then I wouldn't assume the board has mismanaged the funds. It sucks that you got hit with so much at one time, but it's not unusual.
This is why you insist on looking at the corporate financial statements. All will become clear. Is there a sinking fund for the roof? When does the mortgage roll over? How much are we spending on maintenance compared with debt servicing? Is maintenance being deferred? What percentage of the owners are owner-residents compared with owner-investors?
All of these are critical. You wouldn't buy stock in a company with weak financial statements unless the stock was trading at a discount. The same is true for a co-op.
I understand assessments are possible in co-ops but the pain is the fact that we are being smacked with a complete double whammy when you add on the whopping 7% maintenance increase. I wonder if the shareholders could ever get together and appeal this in any way or at least lower that increase a bit. Lord knows we’re living in tough times right now.
You purchased the coop around 2016. Did you and/or your advisor take into consideration the fact that the underlying mortgage was maturing in 7 years and what the consequences might be? What is the debt amount per unit/share? What is the percentage of units that are sublets/rentals versus owner occupied? Have they been paying down any of the principal? There will be points to paid plus the possibility of an interest rate increase when the refinancing takes place.
You purchased the coop around 2016. Did you and/or your advisor take into consideration the fact that the underlying mortgage was maturing in 7 years and what the consequences might be? What is the debt amount per unit/share? What is the percentage of units that are sublets/rentals versus owner occupied? Have they been paying down any of the principal? There will be points to paid plus the possibility of an interest rate increase when the refinancing takes place.
Yep. Cry me a river. See it all the time, they buy and cry, when the questions they needed to ask before purchase are not asked.
Yep. Cry me a river. See it all the time, they buy and cry, when the questions they needed to ask before purchase are not asked.
To be fair, if someone has never lived in a coop/condo before, they wouldn't necessarily know the right questions to ask.
That being said...
To the OP: You should assume a 1-2% maintenance increase each year and try to budget accordingly. In your case, the increase was cumulative so you weren't prepared for it. Going forward, you should increase your own budget whether or not an increase is imposed.
With regard to the capital improvement assessment, by all means ask questions. Find out how much money they have in the reserve fund, what other capital improvements they foresee in the future, etc., and again, try to budget for those anticipated costs in advance.
You may also consider running for the Board yourself in the next election if you have time to both campaign and serve.
I would think $800 for your share of the roof is reasonable. I have friends who pay over $10k for the roof on their home. I would think the maintenance fee would go towards all improvements but since I never lived in a condo or co op, I have no idea.
59211420]To be fair, if someone has never lived in a coop/condo before, they wouldn't necessarily know the right questions to ask. [/b]
That being said...
To the OP: You should assume a 1-2% maintenance increase each year and try to budget accordingly. In your case, the increase was cumulative so you weren't prepared for it. Going forward, you should increase your own budget whether or not an increase is imposed.
With regard to the capital improvement assessment, by all means ask questions. Find out how much money they have in the reserve fund, what other capital improvements they foresee in the future, etc., and again, try to budget for those anticipated costs in advance.
You may also consider running for the Board yourself in the next election if you have time to both campaign and serve.
I disagree. While you may not know all the right questions to ask, it is your responsibility to research how you are spending your money. There are tons of websites that will guide you in this decision. A good realtor and a good real estate attorney are crucial. The decision to purchase a home, regardless of co-op, condo or single family home is often the single largest expenditure one will ever make and you owe it to yourself to make a sound decision. That decision starts with the financial stability of the building you are considering.
Just basic economics should tell you that at the very least a COLA should happen yearly or at worst every two years. I have no idea what the finances are here, but no increases in a decade and 2 assessments in that time frame, in my mind require the board offer a sound reason for the same.
I asked a few questions in this regard and got a no reply.
Pretty sure they are hurting badly and 10% is probably just fine. Don't go if you can't afford it or don't want to spend another $10
Why is there always that one person who is ok with paying extra and gives some negative words to those who oppose it?
It's like the others said, approving these "fees" are where it usually starts or if nothing else it sends a message that it's ok to play around with other prices in the future. Next thing you know the fee will get extended post pandemic for these places to "make up" for their losses. I'm not saying I don't feel bad for the restaurant industry, but how about all the people who are out of work or had their hours slashed, etc? Not to mention myself who's now looking at more payments every month without a raise in sight? Now if I want to go to NYC for a meal one time I gotta pay extra? A line should be drawn somewhere. Instead of them approving extra fees they should allow a tad more than a measly 25% for indoor dining.
This community IMO, has been managed very poorly by the board. Including this one, there have been two assessments in 10 years and no fee increases at all. Personally, no increases would have scared me enough that I would not buy there. [/url]
This seems like an a$$ backwards statement. So bc there have been no increases in 10 years that should scare a buyer? The community has been wonderful since I've moved here and everything I've heard and even READ in the financials I've gotten every year has indicated that things have been good if not great.
Quote:
Originally Posted by 562026
You may also consider running for the Board yourself in the next election if you have time to both campaign and serve.
Yeah I don't really understand how the "board" voted and approved these increase. Wouldn't those people (since they actually live here and pay) be against this?
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