Maintenance increase

I had actually been wondering if the plummeting price of oil would help stabilize maintenance (at least in buildings where heat is included in maintenance). I would have thought market-related increases would mostly be due to increased RE taxes which, so far as I can tell, haven't kicked in yet, and the magnitude of which is thus far unknown.

i agree, maintenance in many buildings went up the past year or so to account for increased energy prices, now those prices have depressed, and RE tx increases haven't been officially announced, why would maintenance be going (generally I mean).

Agree with JohnDoe and ccdevi. cwny, I would check with a member of the board, there must be special circumstances to justify the increase.

Thanks for the feedback. The letter we received detailed out the reasoning which included potential increases in heating fuel, real estate taxes, and increases in payroll and benefits - the whopper was the increase in the assessed value of the building. Can this be the case in this market? Seems high to me.

Many buildings signed contracts earlier in the year for fuel supplies, hoping, I guess to hedge against the erroneous Goldman claim of rising fuel prices. They're now stuck overpaying for this year's fuel.

aboutready is right--many bldgs are stuck for the rest of the contract term w/ the locked in price quoted in the contract, signed earlier this year at the height of the fuel market. The same is apparently happening to some airlines.

Also, regarding assessed value of the building, taxes are paid on LAST year's valuations (2007) so many people will see increased taxes with decreased values. Talk about a lagging indicator. Increases in property tax percentages will be on top of increases in assessed values.

aboutready - thanks, that is really interesting. it makes sense now for the increase. given the current market, is there a way to dispute the increased value and get a re-assessment?

I don't know about the city, particularly coops. Are you friendly with anyone on the board? They might have some info. I don't think, even if a dispute is possible, you have an argument about today's value, everyone is in the same (roughly, except abated properties) boat. I don't know if you have an argument if it's overvalued by last year's standards.

Our maintenance is going up 4% in Jan. The board's justification was fuel prices and property tax increases. Used to be $1 per sq foot was a way to gage a reasonable maintenance. I've heard that's up to $1.25 or so per sq foot now. Does that sound right?

I may approach one of the board members and get more color. atinyc... i think your maintenance is more than reasonable. our's used to be 1.5x, but with the 15% increase in maintenance next year, it will be over that.

Most buildings will increase between 5-10% in '09 to account for anticipated increases in real estate taxes and labor costs. Buildings with major capital projects that were put off during past years for whatever reason will really be hit hard.

kylewest, aren't real estate taxes supposed to go up 7%, on top of increased tax assessments? Seems like this wouldn't be the year the tax assessor's office would let this slide, given the shortfalls in revenue the city is looking at.

ccdevi, co-op boards when planning the '09 budget have to estimate all costs -- oil, water (if not metered) ret, repairs, etc. If they err they need to dip into the reserve; if the reserve is low they need to assess (something to avoid). So they are betting the cost of everything will rise (except oil) and adjust accordingly.

cwny, there is no reason you shouldn't contact the co-op board. You are a shareholder and have a right to ask questions. It is best to contact the President or Treasurer -- they have the answers for you.
They are not omnipotents, just your neighbors and volunteers who are guiding a multi-million dollar corp. and hopefully doing a decent job. Best to e-mail or call. Avoid the elevator attack :)

Thanks W69. I will definitely do that. We've been in the building less than a year and I was definitely suprised by the increase % especially given that the building has/is in very good financial condition.

Our coop did not have any increases in maintenance for 3 years and about 5 months ago increased maintenance about 10%. This was due to increased operating and labor costs, plus the fact that it had not been increased at all in 3 years.

I think that in today's market, coop maintenance of $1.25 - $1.60 /sf or is considered appropriate and under $1.25 /sf is considered low.

We are thinking of raising ours 5 or 6%... not a real big deal, because ours is fairly low. Our annual meeting is later this month, and we'll vote on it.