Assessments

walk

electrogirl, unless it's an ex-Mitchell-Lama, the rent-regulated apartments are not owned by the coop corporation, but by an outside landlord who has to pay the same maintenance and assessments as everyone else. Usually, that's the "sponsor"; often the sponsor is the former owner of the whole building from before it became a coop, when it was entirely (or nearly entirely) rent-regulated tenants.

So you wouldn't be subsidizing rent-regulated tenants.

Nonetheless, those charges are outrageous, and you should look elsewhere.

electrogirl: Did you ask WHY the monthly costs are so high in this building? Does the building have a land-lease? You should ask to see the financials before making any offer and read them very carefully (even the footnotes). Also, you should check how much is in the reserve fund and how much cash they receive from maintenance vs. how much they spend each month.

Many times, you would not see the financials until after the offer, but with a monthly charge of $3.7/sq foot, you have every reason to check it BEFORE the offer.

This monthly charge per square foot is twice as high as I have seen in good full service buildings. So, something is going on.

After reviewing all of the info, if you still want the apartment, then make sure the purchase price is reflective of these issues...

Thanks all. I asked current residents and they said... 'the back wall needed repair and the entire facade of the building was redone with new brick. Scaffolding was up for at least two years while this happened. There is no door man here. It's maybe 35 apts, small studios or 1 bedrooms... one or two combined units. I have only asked for financials when one apt I liked was in a co-op that was more than 50% owned by the sponsor... thus no or difficult financing. My lawyer reviewed their financials with a buyer beware response and I passed. But still someone bought it because it was on the park, but financing took forever. The only reason I considered this is because it has a very rare view... not a lot in this price range available with that kind of view. But you can't live in a view.

Those monthly charges for that size apartment took my breath away, but I assumed you at least had a doorman, if not daily maid service! No doorman? Oh my.

The financial documents deserve careful scrutiny for sure, but even if you and your attorney think it all makes sense, consider this--you never get back the money you spend in maintenance, and it will depress the price of your apartment forever unless there is a plan of action to reduce maintenance (such as paying off an underlying mortgage, terminating the assessment). Sure, the price is great, but you know why. As I love to say, real estate is an investment whether you like it or not.

Karla Harby
Charles Rutenberg Realty
kharby@crrnyc.com

What is the common practice for charging assessments? I thought it was a certain dollar amount x # of shares divided by 12 months? is it normal to be collected in one shot?