Coop with multiple years of assessments
Started by qs123
about 10 years ago
Posts: 0
Member since: Feb 2016
Discussion about
A coop has four years of assessment, about 17% of maintenance each month. Is this normal? In addition, this building rented out their laundry room to outside laundry companies, is this a good sign?
Depends what work they did and how much the full cost is .
Possible that a one-time assessment would've crushed the shareholders , so it was spread out over a number of years instead to ease the burden
You have to look at the assessment history alongside the maintenance to see if it's reasonable relative to maintenance in similar buildings. Some buildings have a higher maintenance and funnel money into reserves for capital projects or borrow. Others don't maintain large reserves and use assessments for capex.
It is not unusual for a co-op to contract with a laundry company to provide and maintain machines. They usually don't 'rent out the room', but rather permit the company to install their machines and collect the income. The co-op may or may not get a cut of that, depending on the estimated cash flows.
If finances are otherwise sound, assessments (versus maintenance increases) are preferable insofar as they get added to your cost basis when you sell the apartment and can reduce capital gains if you have any that are taxable. You can't do that with maintenance increases to cover capital improvements.
But really you are just providing one data point and that isn't enough information for any conclusions to be drawn from that one point in and of itself.
Take tax advice, non-specific at that, from a non tax professional at your own peril.