Sublease 15% coop fee

My coop charges a fee per new lease AND an annual fee (varies by apartment size). I dont think this is unusual.

Most co-ops have some sort of fee schedule for subleases. Yours sounds unusually liberal (normally there is a minimal 3-yr or so live-in requirement and a cap on how many years at a time a shareholder may sublet) so this monthly fee may be a way for the co-op to curb endless sublets and discourage investors.

I guess I am afraid that the whole building is very rental centric and may not be attractive for resale later.

On the contrary, if the building were "rental-centric" they wouldn't be charging the 15% fee.

Thanks folks. Another question for you all... If the maintenance is some what higher than other units in similar size.. why is that and when it does increase and would it equal %? Also, does the maintenance fee only rise per cost per work that needs to be done on building?

jifjif, the two apartments may be similar, but the number of shares allocated to them (and thus their maintenance) will vary by floor, view, etc. It all depends on how the sponsor valued those two lines at the time the building was converted.

Maintenance will go up as fuel costs, wage contracts, taxes, financing costs, etc., go up. Ideally any major work will be covered by a reserve fund the co-op will have accumulated.

Quel coinky-dink, the 2008 financials came today.

44.6% RE Taxes
28.8% Staff
10.5% Fuel, etc.
05.3% Mortgage
10.8% Other

Increases from 2007:

+20.9% Fuel, etc.
+07.6% Taxes
+04.3% Staff
+00.0% Mortgage
-07.3% Other
+05.6% Total

NWT. where do you find this info?

Each shareowner gets a copy of the year's summary financial statements. Ideally they go out in the spring, in time for the annual meeting, so we can all complain about inconsequential expenses.

Is there way to obtain that via web?

No. Unless the co-op maintains a site with access restricted to its own shareowners.

There was a thread recently about when a potential buyer can reasonably expect to see the building's financials, but I don't remember what the consensus was.

Oh, I think that was me -- unlike corporate 10-Ks, which have to be filed by Mar 31 for the previous calendar year, co-op financials tend to lag. At this point in the year most buildings will hand you 2007 because they don't necessarily have 2008 data in an audited form yet.

ali r.
{downtown broker}

Then our accountants must be on the ball. They get the previous years' to us by May, albeit sometimes just a day before the meeting.

It was my understanding that as a potential purchaser of shares in a coop, you had a right to see the financials of the coop. If not, you wouldn't be able to see what kind of financial shape the building was in until after you buy. And you should also have access to the board's minutes.

But I was wondering about the comment of getting the past years financials in May, how do you figure out your real estate and mortgage interest deductions on your tax return if you get those figures after April 15? Do you estimate?

In May we get the whole set of financials. In January we're told how many $ per share went for RE taxes and mortgage interest. I guess it's the first thing they nail down.

Re: the *potential* purchaser seeing financials, the thread turned on the question of who and when. The buyer's not going to hand them out to every yutz who walks into an open house, but can't withhold until the contract's signed, either. I forget how brokers finagled it.

Oops, the *seller's* not going to hand them out....

I guess it's part of the foreplay... I'll show you mine if you show me yours.

"It was my understanding that as a potential purchaser of shares in a coop, you had a right to see the financials of the coop."

As a non-sharehholder, you don't have the "rights" to see anything. You do have the right to refuse to sign a contract for any reason, including not being given access to any info you want, but that's different from having the "rights" to see them. The Shareholder has the rights to examine "the books and records of the Corporation", which is somewhat open to interpretation. Many buildings which used to send minutes of board meetings out to shareholders and/or potential purchasers now demand the purchaser's attorney visit the Managing Agent's office to view them. Also, Coops are not required to file AUDITED financials, and many don't (it's something to look for in the Accountant's Letter which is usually the preamble to most annual Financial Statements). Many simply take whatever info is given them by the Managing Agent and compile an "annual report". Big difference, but most people don't realize it.

"Re: the *potential* purchaser seeing financials, the thread turned on the question of who and when. The buyer's not going to hand them out to every yutz who walks into an open house, but can't withhold until the contract's signed, either. I forget how brokers finagled it."

One of the things which soured me on taking buyers around was showing someone an apartment and having them ask about the reserve fund, the underlying mortgage, the percentage of units sold and 30 other financial questions, and when i asked if they were considering buying the unit, the answer was no: they didn't like the unit, they didn't like the building, and they weren't too happy with the location. but they still wanted to make me jump through hoops with the financials. similarly, i had buyers who wanted the fianancials of EVERY Coop they saw, and were incensed when I told them they would get them as part of their due dilegence if they were the successful bidder on the apartment. Some of these people literally were for some reason compiling a library of financial statements for every unit they saw, and since some brokers went along with it, they couldn't understand why I wouldn't.