What do You Look For in A Coop or Condo Annual Report?

The special assessments you can see aren't the ones to worry about--it's the ones lurking on the horizon. Present assessments you can evaluate and figure into your bidding. You have to have a very good attorney review the financials and minutes to spot capital projects that are slated or that should be but aren't. For example, if the building needs new windows, is that part of the budget? Is the reserve fund large enough to cover it and still be adequate afterward? Is the sidewalk vault in good repair? Local Law 11 facade work cycle completed? How are the public spaces and roof and elevator and boilers? What is the history of special assessments and maintenance increases? Does the building appear to control costs? Does it look like it will have to borrow money anytime soon? Is there a tax abatement in place that is being phased out or that will suddenly expire? These are just a few of the questions that the financials begin to answer. The financials must be viewed in conjunction with the board minutes of the past year or so and everything else you can learn about the building through due diligence and plain old asking around.

thank you, kylewest. that was an awesome answer!

another practice as part of the due dilligence is presenting the management company with a standard list of questions that can't be answered in the financials, including history of maintenance increases/assessments, any noise complaints filed by the previous tenant(s). The might charge $100 extra but it's worth it.