Stoop Columns Require Urgent Repair...
Hi, We are a 3 family brownstone and the funds in our condo association are extremely limited. Unfortunately, we have relatively urgent repair work that needs to be done on our stoop and columns. There is no way that we have enough money in the kitty to fund the work, so how would we go…
Hi,
We are a 3 family brownstone and the funds in our condo association are extremely limited. Unfortunately, we have relatively urgent repair work that needs to be done on our stoop and columns. There is no way that we have enough money in the kitty to fund the work, so how would we go about getting a loan to cover the cost of the repair?
We can certainly increase the monthly dues to cover the payment of the loan.
Any feedback much appreciated. Thanks.
Yes, you can’t get a mortgage if you aren’t a coop.
But you do have some funds, presumably, so see if your bank will issue you a credit card (I think our coop’s bank offered us one – don’t remember exactly, as we had no interest in using one.)
But I think you’d be best to just assess all members for an immediate payment of a lump sum. I don’t think this work your describe is more than say, $10,000 total. Each owner should be able to come up with the money – from savings, borrowing from family, borrowing from a 401(k) even, or using credit card advances. If they can’t come up with a few thou for a needed repair, they have no business owning a condo in your building. And, you should not only assess the cost of the repair, but also raise your monthly payments so you can start building a reserve, since you seem to have a problem doing the alternative, which is to keep no reserve but just assess (and promptly collect) the costs of a repair when needed.
I think it is best to assess each owner, rather than try to burden the condo association itself with loans or any form of debt. It isn’t standard in a condo (only in coops), and in my opinion would make your units less attractive to buyers. And if you really do have owners who can’t come up with funds to maintain the property, then there may be someone forced to sell in your future – that is their viable option, if they can’t afford to own.
That is, unless all three (or a majority) agree to leave the place in rundown condition rather than pay to fix stuff – that is certainly a route many coops take – and someone who wants a better maintained place won’t buy there, based on just a visual inspection of the place when visiting; or else the one owner in the minority who wants a better maintained home may sell and move up to a better maintained place.
I do think this option to not repair is foolish, as many little things add up to a really poorly maintained structure. You’d all do better, investment wise, to beg or borrow the money you each need to maintain the place – it will really pay off when you do sell and move on.
Thanks all. Just spoke to the bank and indeed a line of credit appears to be the way to go 🙂 Accompanied of course with an increase in maintenance.
CM — It’s only a 3 families… seems like all three could get together to personally guarantee a loan, no?
3 families needing to come up with the cash immediately sounds like the problem. Seems like a line of credit would be fairly easy to come by in this situation. Like a 2-year note at 10-15% or something.
You can’t tell me the banking industry is that screwed up these days that simple loans like this don’t happen… or?
If it is urgent work you have no choice but to assess the unit owners. If it were a one-family house, you would need to pony up the funds no matter what. Real estate ownership comes with financial obligations. In your case you are fortunate that you can spread out the cost among several families.
PS: this is one instance where co-ops can be superior to condos in that most established co-ops get lines of credits at the time they refinance their underlying mortgage.
If you are in a landmark or landmark district, you may be able to get a low-interest loan from NY Landmarks Conservancy’s revolving loan (aka Historic Properties) fund – http://www.nylandmarks.org/programs_services/loans/historic_properties_fund/ (note that the Conservancy is NOT the Landmarks Preservation Commission)
Gents, what will the assessment do exactly? (new to a lot of this). If we need the repair to be done fairly quickly, will the assessment provide funds for that? It is my understanding that the assessment will raise the monthlies for a period of time. Problem is, we need the funds up front to pay for the repair. Is the only solution for one of us to stump up the money and have the other owners repay it over a period of time?
Thanks.
You won’t get a line of credit unless one or all the unit owner’s personally guaranty it. You’ll have to assess.
It’s called an assessment.
You may be able to get a line of credit, but not likely.