One Hanson Board Jacks Common Charges 17 Percent
According to a letter that went out last week, life at One Hanson Place is about to get more expensive. While 2008 expenses were less than expected, the Board of Managers foresees more costs this year. A couple of the reasons include service contracts for the mechanicals and the purchase of an apartment for the…
According to a letter that went out last week, life at One Hanson Place is about to get more expensive. While 2008 expenses were less than expected, the Board of Managers foresees more costs this year. A couple of the reasons include service contracts for the mechanicals and the purchase of an apartment for the “resident manager” of the building. (Nice gig!) In addition to being irked by the rising costs themselves, our tipster was extra-peeved when he learned that the Board doesn’t have a single condo owner on it, that it’s basically the tool of the developer. Can anyone confirm?
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January 21, 2009
All Unit Owners
One Hanson Place Condominium
One Hanson Place
Brooklyn, NY 11243
Re: Common Charge Increase
Dear Unit Owners:
The building’s fiscal year-end was December 31st and the Board of Managers met in order to review the 2008 operating expenses and prepare the budget for 2009.
The building’s actual expenses for this year, 2008, were less than projected; however, in 2009 there will be expenses that were not required during the first year of operations. These expenses include service contracts for all of the mechanical equipment in the building, expenses related to the purchase of the resident manager’s unit, as well as increased operating costs in utilities, water & sewer, insurance and payroll-related expenses.
It is the Board’s responsibility to ensure the building remains financially sound, and only to increase common charges in order to meet projected needs. As a result, effective March 1st, 2009 residential common charges will increase 16.93% – this fiscal discipline should make 2009 a successful year. The common charge increase will be retroactive to January 1st and will be billed in two installments in March and April.
The Board does not take lightly the need to raise common charges and thanks everyone for their understanding.
Board of Managers
dave – i disagree – older buildings get hit with all sorts of nonsense too. there is no perfect solution – just look at all aspects of the building with an inspector, and try to get as much information as possible.
In our condo the live in super’s unit was a one lump sum payment done at closing (scaled like maintenance cost). It was the only unit residing on the first floor. The price was slightly above cost I assume since it was $385K for one bedroom and the cheapest unit was $460k 1BR also (no studio).
I would not be surprised that the devs are trying to kill 2 birds with one stone. Get a live in super, get rid of the least attractive available unit (every condo has one) and have the owners pay for it.
They shouldn’t be shocked by an increase in normal maintenance costs, but they should be outraged that the sponsor used its control of the board to cause the condo to purchase a unit from the sponsor (at, unless someone can tell me otherwise, an above-market price). Apparently buying into this building meant making two purchases — a presumably at-market purchase of your unit, plus a forced, above-market purchase of a fraction of another unit. Of course you were only told about the first purchase when you signed up.
I don’t even live there and this is pissing me off.
This is very typical in new development. Developers will spec out the bare basic cost of services so that their common charges in the offering plan and marketing materials are low. Any attorney, well informed buyer or real estate agent should have known this information…..the buyers shouldn’t be shocked.
” I get the sense that the sponsor knew in advance that these costs would be handled that way.”
Yes, I am shocked, SHOCKED, that sponsors and real estate agents would EVER withhold such information from potential buyers.
This year the average increase in coop budgets was on the order of 4%, which seems about right if we look at how prices were this past year. Unfortunately, a lot of coops think it’s better NOT to increase maintenance costs, which only makes sense if operating costs also have not increased. THen when the shortfall becomes apparent, the increase is higher than is comfortable.
I would be very wary of projected costs for ANY new conversion/construction, since they only have to project for the first year. THe documents are huge, but if you are someone interested in buying in, really try to consider WHAT might have been left out of this initial budget.
This is why it makes so much more sense to look for a condo or coop in an older, long established building. The likelihood that major maintenance issues have already been addressed is higher, the “unforseen” expenses that crop up in new buildings are not there and, there’s more likely to be a large operating cusion so that CCs are only increased a minumum amount, usually less than 10% and never on a yearly basis.
tybur6…agreed. Operating costs should be for operating expenses. There should be a plan for capital expenses. Possibly your friend’s coop’s are resisting getting or increasing an underlying mortgage?
Total bait and switch at Hansen place.
“Those rent stabbers”
lol. I see you enjoy being a landlord.