Co-op management question
We live in a small (5 unit) co-op, and we don’t use any kind out outside management company. The only problem is this — although we’ve lived here for 3 years we have never seen any kind of financial statement other than year-end tax documents. There is 1 tenant who is in charge of keeping…
We live in a small (5 unit) co-op, and we don’t use any kind out outside management company. The only problem is this — although we’ve lived here for 3 years we have never seen any kind of financial statement other than year-end tax documents. There is 1 tenant who is in charge of keeping track of maintenace payments, bills, banking etc., and there’s no other review of any of the finances. Does this seem odd to anyone else? I get shot down whenever I suggest a more formal accounting system (i.e., monthly statements or even an outside accountant). Am I being crazy or is this a bad situation? Does anyone else have a similar arrangement?
It is just as likely that the maintenance went up because expenses on all things are going up a lot for all coops and condos. Don’t jump to conclusions about someone doing illegal things just because you lack information if you don’t have evidence of illegal things – that’s dumb. Just get the information – you all should be getting it. Spend your time working on that rather than coming up with fantastic scenarios – it’s more productive. And it is more productive to try to work with the people in your building than to demonize the person doing all the work. I’m sure you realize that your maintenance would go up even more if you hired an outside accountant – totally unnecessary in such a small coop (brklyn girl’s suggestion that it looks more professional aside) – the only thing you need an accountant to do is your taxes. No reason to pay for an annual statement. You can type one up, or print out the yearly information from a computerized system, and it looks just as professional. The annual budget of a small cooperative is quite small, easy to understand, and transparent. Work to get the information shared among the board/owners. But there’s no reason to be a jerk about it. Coopers should remember that more often – life would be nicer.
Yes, sorry about that — $1.00/sq foot is what I meant to write. We did meet to discuss the raise in maintenance, but I am wondering how we’re not able to have more of a reserve with everyone paying so much maintenance. It just worries me that this person could (and very well might be) neglecting to pay maintenance on time and/or using the building’s reserves to finance her own renovation projects. The other tenants don’t seem as concerned, but I think it’s more laziness than trust in our system.
I just moved out of a 6 unit co-op after 5 years. Monthly bookkeeping/statements done by someone in the building is fine, but IMHO paying an outside account for a proper annual statement is worth the $1500 or so. When you go to sell you will look much more organized and professional. Worth every penny.
To OP,
I would hire an outside person to do this work, and maybe audit some past year’s statements – what would you do if, heaven forbid, something happened to this lone person who controls your financial statements? Or if there were a fire that destroyed all of the documents pertaining to the building?
I would also think hard about John Ife’s post at 8:42. It’s sad, but unfortunately true, that a good percentage of our population will steal and be deceitful if given the chance.
To 9:28, I can’t believe that an 84 unit building doesn’t have professional management. seems crazy to me…
I do the bookkeeping for an 84 unit building. I have the cheapest quickbooks available, $90. at office Depot. It works perfectly. I print out a monthly invoice for all residents on the first. I also provide a monthly balance sheet which is available at the meetings. It is about a 30 minute job once a month. No biggy. I make the deposits weekly and post payments and pay bills. Almost all the bills are auto debit from our account but we always have a few extras. If I lived in any coop or condo that was not able to provide a monthly balance sheet I would be very worried…..I am also a resident and do not charge for this. It is not rocket science and is really very easy to do with modern technology. At least 3/4 of the residents get their satements by e-mail.
We have monthly reports generated for our 5-unit co-op. Sort of excessive but we do have monthly meetings and everyone does at least glance at the reports. we do, however, pay an outside accounting firm about 2k a year, but it’s probably money well spent. At minimum, I’d say, you should get a detailed yearly accounting done by a 3rd party.
jb1228,
I sure hope you’re missing a decimal point behind the 1 in that $100/SF number!
I agree totally with the overwhelming sentiment of the replies that greater transparency and sharing of the financial duties is required than seems to be extant in the case of your building. You would not believe the financial irregularities that were discovered in a co-op where I used to live when the old president and a large percentage of the board were replaced by new people (of which I was one). For some people, the indifference to financial matters of others in a community leads to temptations that they find irresistable.
My 4-unit used Microsoft Money – there’s a check register in the program that the treasurer entered all the checks and deposits into. From there, you can slice and dice the data and print out a variety of reports.
When I took over as treasurer, I printed out a report that listed every single expenditure and deposit, by month, and by category and brought copies to every board meeting. So people would look at the report and ask questions about any expenses and we’d discuss them.
I’d print various year-end reports to give our accountant after year-end to do our taxes, and I’d also pass out the yearly summaries to the rest of the board. I did it when we met, so I was there to answer any questions. That was sometimes monthly, and sometimes less frequently, depending on how often we felt the need to meet, when doing projects. The basic monthly expenses don’t really change – it’s the contractor and repair expenses that are unusual.
Doing the reports is really time-consuming (the previous treasurer got tired and didn’t do any for over a year), but it is very useful info – not only so people can see where the money goes, but for future planning.
We meet less than we should… um, like once a year. But nothing gets decided without the full approval of everyone, which is usually not hard. The maintenance cannot be changed in our building without a full discussion by every apartment. We should be meeting one every three or four months, but if anything happens, there’s always a flurry of emails.
Make sure somebody takes good minutes at the meeting. But again, I don’t think it’s necessary to meet once a month. With five apartments, I would not want to leave anyone out of any meeting.
But it’s YOUR building. If you want to meet once a month, then you should be able to find common ground with the other owners.