Maintenance fees after mortgage fulfillment

I don't understand the question. If x% of the maintenance was to pay the mortgage principal and interest, and then you no longer have to pay those things, what on earth would the coop do with that money if it kept collecting it?

The correct answer is that coops rarely pay off mortgages entirely ... there are more capital projects to do, there are shareholders who think the tax deduction is advantageous, there's more refinancing and rolling more debt into the mix.

Exactly.

Here're some that're mortgage-free or soon to be, but I can't tell whether their maintenance runs low: http://streeteasy.com/nyc/sales/nyc/status:open%7Ctype:P1%7Cdescription:%22no%20underlying%20mortgage%22

My co-op's is $1.25M, with my share at $19K, so the transaction costs to refinance every ten years are a waste. We should just assess ourselves and get it over with.

>The correct answer is that coops rarely pay off mortgages entirely ... there are more capital projects to do, there are shareholders who think the tax deduction is advantageous, there's more refinancing and rolling more debt into the mix.

Those FOOLISH co-op owners.

Alanhart, where do you live?

My co-op just refinanced to a self-liquidating loan. It is definitely the right move for our small building because the pro rata refinancing costs are exorbitant.

That said, when we were doing our budget, we found it very hard to pay down principal, adequately fund reserves, and keep maintenance at sane levels. It tends to be a "pick two out of three" game.

To accommodate the new loan payment and keep the maintenance increase palatable, we slashed our reserve contributions to "if all goes perfectly" levels, knowing that we will probably run deficits. Fortunately, we built up our reserve significantly in the two years prior to the refinance, so we're in good shape for the moment. But by the time this loan is fully paid off, I would not be shocked if we had to hold maintenance for 1-2 years just to replenish reserves.