Common Charges Increase on Coop
Hi, I recently decided to buy into a coop in Park Slope North. However, after I had the inspection done, I was notified that the common charges would be going up due to rising cost of fuel. They decided on about a 9% increase. My question: 1) any other coop owners experience a similar increase…
Hi,
I recently decided to buy into a coop in Park Slope North. However, after I had the inspection done, I was notified that the common charges would be going up due to rising cost of fuel. They decided on about a 9% increase. My question: 1) any other coop owners experience a similar increase recently, and 2) is it strange that the increase came after a deal was close to being sealed?
…but of course, there can be corrupt boards, but that’s a different thing entirely.
Hi Bolder, OP and others:
Co-op board members DO know when increases are coming…they have to vote on it after all, but if they are a responsible board (a board’s primary duty is FIDUCIARY, after all), they set the maintenance once a year, after reviewing the budget from the previous year and discussing proposed increases. If they get it right (and there are no UNEXPECTED increases…ie fuel prices skyrocketing), there should be no additional increases until after the next year’s budget meetings. If there are unusual or unexpected increases, there may be a special assessment.
The suspicion should be placed on the seller and possibly the agent, and nowhere else.
If you are buying a coop, definitely review the financials, but also ask when increases generally happen and are any planned, do they have any notice of impending increases, and is there any capital work in the offing. In other words, frame the question as many ways as possible so that if the agent has the information, s/he has to reveal it. But Bolder’s right: costs have gone up. Expect maintenance to go up too.
Every co-op board member knows when increases are coming. But they don’t put that in the minutes, so even due diligence wouldn’t have ferreted it out. As a current board member, I can say that we only put things in the minutes that are decided upon; otherwise it’s just speculation and jawboning.
Both times we bought co-ops the maint. went up 10-15% as soon as we moved in. We thought it was suspicious, too.
Heating oil has been a killer the past 2 years. Not happy about a pending city tax increase, either.
Agree with Troll,
It’s not a concidence, at times some things are out of the coop’s control such as the aformentioned price of fuel.
Also it would have been diligent of your RE lawyer to ask this question after reading the minuets etc.
Heating is 20% of my coop costs. Taxes up 6% and water/sewer charges up 10%. The only thing down this year was insurance. The days of no CC/maintenance increases are over.
The past couple of years, my co-op has been adding a “special assessment” for increased fuel costs running from November through April. This way we avoid a permanent increase and can make the assessment equal the increase in fuel costs, which fluctuate. I’m told the assessment this year will be much less than the last two, but that is mostly because we put in a new, more efficient boiler and did some weather stripping in areas of great leakage.
I agree.
Fuel costs are a big part of any coop budget. In buildings without doormen etc it may be the largest part of the budget (along with RE taxes, tho this is more variable due to whacky city assessments). While no longer part of a coop I have seen our heating costs rise a lot over the past few years.
Nice thing is that so far this year is lower than last based on the price of a barrel of oil.
Yeah…..Oil is up ~9% YoY.
Yes, the raise is to be expected. They raised the maint. on my brothers condo recently due to increase costs. Its not strange that the increase came after the deal was closed. Its just circumstance. Don’t read too much into it.