New York based property management firm, All Area Realty Services blog. Find tips for Co-Op Boards & Residential Building Management.

Are Co-Ops A Thing Of The Past?

Posted by All Area Realty Services Team on Oct 16, 2018 3:03:36 PM

Although co-ops represent some of the most desired addresses in New York they are also known for a harsh history where prospective owners had to pass notoriously difficult boards, meet rigorous income standards, and abide by inflexible “house rules” when it came to renovations and resale. Due to this infamous history co-op sales have been dropping and more prospective buyers have been looking to buy condos. So the question is does this mean co-ops are becoming a thing of the past? 

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In the prior year co-op sales priced $5 million and up fell nearly 20%, and in co-ops priced $20 million and up sales declined 25%. This is all despite the fact that co-ops compose 70% of Manhattan’s owned housing units. 

Condos Are Rising in Popularity 

There are a few pros to condos in comparison to co-ops that it is enticing to prospective buyers. These are:

  • Condos have a more immediate buying process.
  • They are generally full-service buildings with gyms, high-tech amenities, and on-site daycare services.
  • Condos allow more freedom to sell or rent the space.

Co-Ops are finding it hard to compete with these enticing pros condos have. 

The 5 Valuable Benefits Co-Ops Still Offer

  1. The bright side to the fall out in sales of co-ops is that there are great deals out there for qualifying patience buyers. 
  2. Co-ops, on average, are more affordable compared to their condo counterparts. 
  3. Co-ops still count for some of the most prized real estate in New York making them a better long-term investment. 
  4. There are never foreclosures in co-ops because everyone is in equal financial standing. 
  5. Co-ops have more tools to raise needed funds and to handle delinquent apartment owners. 

The truth is that real estate is cyclical. Even though sales have dropped recently for co-ops it does not mean it is the end. Co-ops still offer comparable benefits to condos, and they represent the most luxury housing in the city. Co-ops will never truly go out of fashion. 

All Area Realty Services is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area. Contact us today if you're looking for a professional property management company. 

 

Topics: Co-Op Board, Co-Op Building, Buying a Co-Op, Buying a Condo

Handling Lawsuits As A Co-Op or Condo Board

Posted by All Area Realty Services Team on Oct 2, 2018 4:14:43 PM

Lawsuits are expensive and time-consuming, and can quickly turn into a financial burden. And unfortunately in some cases it is the only option for resolution.

The Basics

The most common lawsuits include noise complaints between neighbors, construction defects in units, and attempts to collect delinquent payments from residents. If you are the defendant the lawsuit will begin with you being served with a complaint. You will have 20 days to answer the complaint with either an answer or to file a motion to dismiss. You can seek to dismiss the complaint on two grounds: you can say that suit is not strong enough for “a cause of action” or you can try to dismiss by virtue of an “affirmative matter.” 

Also, keep in mind most cases are settled before the going to trial, or the completion of a trial. 

iStock-660743394Don’t Go Through a Lawsuit Alone 

If you attempt to resolve the dispute yourself it could ultimately create more legal challenges. You could find yourself in the trap of selective enforcement. Inconsistent rule enforcement could not only get you in trouble, but empty threats can result in issues as well. In the first phase of a lawsuit, the involvement of your attorney is crucial in steering you to a successful path to resolution.

Although all lawsuits are public record if you have an attorney all of your discussions will be protected by the attorney/client privilege. If you discuss the lawsuit or seek advice to anyone else you will not have this confidentially protection and could have personal information about the lawsuit leaked. 

It is important to note that if you’re covered by general liability insurance or Directors & Officers coverage you could have your defense provided by your carrier.  

How Much Will a Lawsuit Cost 

Predicting the cost of a lawsuit is difficult. The more actions necessary to take place during a lawsuit and the longer it is all run up the price. If you come into the situation with reasonable expectations, a willingness to compromise and communicate you can really save yourself a lot of time and money. 

Alternatives 

You can try to meet with the other party and resolve the issue amongst yourselves. However, as mentioned above this is a gamble and could end up costing you even more money in the end. At the very least an attorney should be present as a mediator. 

The Consequences of Constant Litigation iStock-478524467

A long history of litigation may hurt your standing with prospective buyers and lenders. Prospective buyers may question the building’s financial stability, if the board is ruling effectively, or if the residents have hostile relations with the board. Also, lenders may take the constant litigation into consideration when underwriting their loans. 

Lawsuits can be expensive and time-consuming experiences. However, if you keep all the points above in mind it can help to cheapen and shorten the time span of your lawsuit. 

If you serve on a co-op board and need professional property management services, contact All Area Realty Services and find out why our over 30 years experience and loyal clients makes us experts.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area. 

Topics: Co-Op Board, Co-Op Building, Co-op Insurance, Condo Board Association, Co-Op Board Lawsuit

Can A Co-Op Charge Renovation Fees?

Posted by All Area Realty Services Team on Sep 27, 2018 4:08:46 PM

The short answer here is yes, and unfortunately as New Yorkers,  you already have to endure a ton of charges if you are going to renovate your apartment.

Why would you have to pay co-op renovation fees? 

These fees are meant to compensate for ancillary costs during renovations. The building may have to spend extra money or soothe complaints and concerns from your neighbors. Maybe the building will have to hire additional staff or pay over time due to the renovations. Neighbors, who have no choice in the matter, may have to tolerate dust, excessive noise, and the overall stress that living next to construction induces. The renovations could also cause traffic and back up on the service elevator from workers carrying materials up and down. These are just a few examples of potential reasons for ancillary costs.

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How often will the fees be charged? 

The fees could be a flat rate, monthly rate, weekly rate, or charged on a sliding scale that increases over time. The manner in which the fees will be charged to you is decided by the building.

Other Potential Charges During Renovations: 

  • Cleaning fees from the co-op
  • Late fees from the co-op
  • A security deposit
  • A bill if the building’s architect or engineer reviews the plans
  • A bill from the managing agent
  • Charges from an inspector
  • City permits, if they are required

To protect yourself make sure that all co-op charges are detailed in every resident’s alteration agreement. If you’re planning renovations have a lawyer overlook this agreement before signing it.

If you serve on a co-op board and need professional property management services, contact All Area Realty Services and find out why our over 30 years experience and loyal clients makes us experts.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area. 

 

Topics: Co-Op Board, Renovations

11 Mistakes to Avoid When Buying a New York City Co-op

Posted by All Area Realty Services Team on Sep 13, 2018 4:39:37 PM

Deciding to buy your first co-op in New York City can be overwhelming and scary. Seeking advice from other wannabe co-op buyers may induce even more anxiety when discussing their own bad experiences and frustrations. More often than not it isn’t you causing the complications it’s the real estate system itself. Below are 11 common key mistakes you should avoid in order to have a more successful co-op purchasing experience. 

Mistake #1: Apartment hunting without the help of a broker.

As a buyer, you pay your broker nothing to represent your interest. Yes, nothing! When apartments in Manhattan are sold the seller pays the broker for a job well done in finding a willing and able buyer. The seller pays a 5 to 6 percent commission, half of which goes to your broker.

Not having your own broker would require you to work directly with the seller’s broker. The seller’s broker has a responsibility to do everything they legally can to twist the deal in favor of the seller and against you.

A buyer’s broker will help you navigate through the complicated process of buying a co-op while protecting you from the other mistakes listed below. 

The only time your broker may be at a cost to you is if the co-op is For Sale By Owner or listings where the brokerage doesn’t take buyer’s commissions. It is better to be without a broker in these cases.

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Mistake #2: Failure to notify the seller’s broker that you have your own broker. 

Okay, now you have your broker to assist and protect you. The next step to keep in mind is to have your broker schedule all of your viewing appointments. At open houses clearly indicate that you have a broker on sign-in sheets. Failure to do this could easily lead to you losing professional representation.

Mistake #3: Inadequate mortgage pre-approval letter. 

To be taken seriously by any prospective seller you need a mortgage pre-approval letter. The mistake to avoid here is getting a pre-approval letter based on your budget. Make sure your letter is based on the maximum amount the bank will lend you.

Mistake #4: Believing it’s possible to lose a bidding war.

Believing it is possible to lose a bidding war is a false assumption. You will never lose a bidding war if you offer the maximum price that you are comfortable paying. This way if you’re outbid, then the apartment was too expensive for you; if your bid wins, you’ve paid a price you feel was appropriate for the apartment.

Low-balling never works in the most competitive real estate market in the world, New York City.

Mistake #5: Overestimating your financial strength.iStock-658242920

Co-op boards don’t only want to see that you are pre-approved for a mortgage. They need more assurance that you can still pay monthly maintenance even if you lose your job. You need to have enough liquid assets post-closing for 24 months of mortgage and maintenance expenses. If this isn’t possible you may have to be more realistic about your maximum purchase price. 

Mistake #6: You’re told your offer is accepted. You believe it.

Your offer isn’t officially accepted until the sales contract is executed. Without this contract executed the seller’s broker could still show the apartment searching for a better offer. Make sure you and your broker do everything you can to accelerate the execution of the sales contract.

Mistake #7: Choosing a friend or relative to be your real estate attorney.

The only time this is appropriate is if your friend or relative specializes in New York City real estate. No exceptions.

Mistake #8: Failing to ensure that the co-op is on your mortgage provider’s approved list.

Once the sales contract is executed you will have 30 days to obtain a mortgage commitment letter. If the co-op isn’t on the mortgage institution’s approval list you may not receive the mortgage.

In the case that you for some reason sign a contract that is non-mortgage contingent, you will be in breach of contract if you can’t find a willing mortgage lender. You could lose your deposit under these circumstances. 

Mistake #9: Assuming the co-op board will accept your perfect board application.

You could have perfect credit, solid financials, and impressive letters of support and still be rejected without a board interview. Reasons for this could be: 

  • They may not be investor friendly and believe that you’re trying to rent out the apartment.
  • They may be concerned that your purchase price is low enough to reduce property value.
  • They may not allow pied-à-terre, gifting, or co-purchases financed by family members.

To avoid this do your best to find out the board’s limitations before making an offer. Once rejected there isn’t much you can do but collect your deposit and move on.

Mistake #10: Failure to check if there is a lien against the unit.

A lien is a right someone may have to keep possession of the property belonging to the seller until he/she pays a debt owed to the them. In this situation, the lien holder has to be notified of the closing. This can lead to delays. These delays can lead to higher mortgage rates if the mortgage lock expires in that time frame.

Mistake #11: Buying an apartment to generate rental income. 

This works great in California and Arizona, but not in New York City with co-ops. Once you pay your mortgage and maintenance you’ll be lucky to make 4% a year on your investment. Professional renovators may do better. But passive investors will just gain stress at best, a money pit at worst. 

It may be shocking and overwhelming to discover how complicated and difficult it is to buy an apartment in New York. Keeping these 11 mistakes in mind should help make the process a lot smoother.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service professional property management for cooperative and condominium boards in the Manhattan area

 

 

Topics: Buying a Co-Op, Selling a Co-Op

When and How to Hire a New Property Manager

Posted by All Area Realty Services Team on Aug 30, 2018 11:02:00 AM

As a co-op board it can be intimidating to know when and how to find a new property manager. Hiring new co-op building management is a serious commitment like that of a marriage. You need to learn as much as possible about this new partner before you take the big leap. This is one of the biggest decisions you will have to make as a co-op board.

The most common complaints about property management are to-do lists grow instead of shrinking, phone calls go unreturned, and that the cop-op board’s relationship with the property manager is conflictive.

However Here Are The Real Issues To Look Out For:

  1. The manager provides vague financial statements, without original invoices.

This is a major red flag! Without detailed invoices there’s no true record of where the money went to. The property management could be using your money to fix things in their unit or for any number of personal things.

2. The manager makes surprise and unauthorized expenditures.

There was an incident with The Normandy, a 250-unit co-op on Manhattan’s West Side, and their management. The co-op board discovered that their property manager was spending money on personal attorney fees, a caterer for his wedding, his car repairs, and a whomping $85,280 “petty cash fund.”

Even if you notice small inconsistent unauthorized expenses it could be a sign of a major hidden issue.

3. The manager loses interest.

Even managers that have been in place and given great service in the past may need to be replaced. Over time managers can get bored and their performance can go on a decline.

Once You’ve Parted Ways, How Do You Find a New Manager

The best way is to compile a list of possible property management companies. Make this list through word of mouth, talking to the co-op board lawyer and accountant, reading industry publications, and seeing who manages nearby buildings.

If you have had any of these incidents occur with your property management it’s probably time to move on to find a better match for such a serious partnership. It’s intimidating but not impossible to find your perfect match, especially by using the tactics given above.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service professional property management for cooperative and condominium boards in the Manhattan area

Topics: Co-Op Building, Property Management, Co-Op Board

Property Management and Board Relations

Posted by All Area Realty Services Team on Jul 17, 2018 6:13:03 PM

A harmonious and collaborative relationship between you a property management company and building's co-op board is a necessity. This harmony can only take place with a clear understanding of roles and responsibilities.

That being said, it can be easy for the duties to get blurred and overlap, but you and the board each have their own distinct set of duties. Building boards are responsible for making decisions regarding capital expenditures, which prospective. As management you are responsible for providing unbiased information to the board and carrying out the boards goals and objectives.

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Overlap usually arises when the board is too closely involved in overlooking management duties, or giving the property manager responsibilities that aren’t in the contract, therefore unanticipated. These extra responsibilities could take away a manager's ability to fulfill the actual contracted expectations. The only instance overstep is acceptable is normally under emergency circumstances. 

To sum it up, for a co-op board and property manager to have the most efficient and happy relationship there has to be clear communication about your roles and theirs. Along with that communication there has to be effort to stick to those clear distinct guidelines of duty by making sure the board and residents understand roles and responsibilities of each party. 

All Area Realty Services is New York City’s leading real estate management company specializing in full-service professional property management for cooperative and condominium boards in the Manhattan area. 

 

 

 

 

Topics: Co-Op Building, Condo Board Association, Co-Op Board, Property Management

Can A Co-op Board Member Be Sued?

Posted by All Area Realty Services Team on Jun 28, 2018 2:06:51 PM

As co-op board member, you may not think you’d ever come into a situation where you could be legally sued, but unfortunately that’s not the case. In most instances, you're being sued as a board member from an angry co-op resident who wishes to bully the board into doing something in their favor.

You might be thinking, “If I’m being sued as a co-op board member who pays the legal fees?”

Most co-op boards carry liability insurance so if you do end up being sued as a co-op board member, the liability insurance would cover the legal costs of the board.

If you’re unsure if your board carries liability insurance, you can reach out to your property management company and ask. Someone on the property management team should have a copy of the liability insurance or other insurance plans the board carries.

What are the most common lawsuits against co-op board members?

The term lawsuit is often associated with someone wanting to get financial returns on a situation they were involved with. In the case of suing co-op board members, the most common suit is against board members for pet policies.

iStock-478524467It’s very rare that you’d see a case where someone is suing for money in a lawsuit against a co-op board. Instead, they often want co-op building's policy overruled in their favor.

The plaintiff in these cases is responsible for all legal fees and once the ruling becomes a case, they’ll often add on a few other personal changes they want made in the policy to favor their situation.

It’s a common fact in New York City that lawsuits against a co-op board member are typically filed from people who do not want to follow the rules, have a lot of money and time, and simply want something to do - especially if they feel slighted in any way. Because of that, New York courts usually favor and protect the co-op boards if they show proof that the decisions made are law abiding and made in good faith.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area. 

Topics: Co-Op Board, Co-Op Building, Co-op Insurance

Possibly, the One Downside to Living in a Co-op

Posted by All Area Realty Services Team on Jun 18, 2018 2:49:16 PM

Living in a co-op building can be a great opportunity for many New Yorkers. The downside to living in a co-op is having to share building expenses regardless if the expense improves your way of living or not.

A recent example of this was for a New York City building in the West Village of Manhattan. The co-op board wanted to start a project that would put central air-conditioning in each apartment. The project was going to cost $300,000 – which would be split among all the homeowners.

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While it sounds like this would be a no-brainer “Yes” among all homeowners, what wasn’t put into consideration was some homeowners already paid for central air conditioning to be put in their individual units in previous years. In those instances, the homeowners who previously paid central air would now be chipping in for their neighbors central air. Some argued this wasn't fair.

When you become an owner of a co-op, you, along with all the owners, are expected to look after the entire building and plan for the building's future. In this case, the homeowners  who opposed this plan didn't see the value the central air-conditioning would bring to their individual units, especially if they had already paid to install it themselves previously.

The same could be true for co-ops who need to have elevators improved, common area maintenance, building repairs, etc. While these areas may not affect the individual apartment itself, the expenses do. Even if an owner doesn't use the elevator, let's say they prefer the stairs, they are still expected as this is considered maintaining, updating, and investing into the building - as it is an asset. 

If you are in the market for a co-op, the lesson here is to make sure you speak with you real estate agent so that you know what to expect. Ask your agent what is included and/or expected of you as an owner should you buy the unit. Ask about how situations like this were handled in past years, and if all owners were happy with the results.  

All Area Realty Services is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area. Contact us today if you're looking for a professional property management company. 

 

Topics: Co-Op Board, Co-Op Building, Buying a Co-Op

Is Being a Co-op Board or Condo Board Member Difficult?

Posted by All Area Realty Services Team on May 30, 2018 3:25:53 PM

What does a board member do?

A co-op or condo board member's main role is to facilitate the day to day management of a building, by self management or by hiring a professional property management company. They often answer emails and calls from residents, interview and review applications of potential buyers and keep the building working efficiently according to both state/city law and building regulations - as well as keep residents informed. 

iStock-640177478Attending board member meetings is also important. Some boards stick to an agenda during their meetings while others take a more casual approach. When surveyed, property management professionals stated the biggest complaint from board members is not having a set agenda and the meeting lasting for hours.  A well led board will have a president that sets the tone, takes on a leadership role, delegates, and determines how meetings are run.  A good board president will know that having an agenda will ensure meeting stay short, run smoothly, and removes excess emotion and conflict that may arise. 

If you’re thinking about becoming a board member and you have skills in running meetings or organizing an agenda, bring this up in your application. This may give you an advantage if you can demonstrate these skills. 

What determines if you're a good candidate to serve on the board?

iStock-855667636There is not a set of guidelines to become a board member. You must first express interest and fill out an application. The board will interview you and you must pass the interview process before you can become an official board member. Most boards are looking for a team member who is well informed, committed, and has the time needed to serve the building.

Having a neutral personality and being able to remain calm and collected will help you to get a spot on the board. Another area that might help is your current job or previous job skills. Board members benefit from free legal and tax help. If you have an accounting background, you may be a great asset to help with the buildings financial books. Same goes with any construction, engineering, or legal experience. No experience? No problem. Apply anyways, its always good to have a diverse board.

All Area is New York City’s leading real estate management company specializing in full-service professional property management for cooperative and condominium boards in the Manhattan area. 

 

 

 

 

Topics: Co-Op Building, Condo Board Association, Co-Op Board

Should You Elect Diverse Co-Op Board Members?

Posted by All Area Realty Services Team on May 15, 2018 5:09:37 PM

The term ‘board member’ is sometimes associated with holding a political position. In co-op and condominium boards, this is not the case. Board members in the political sense are paid for their time and services. Board members in a co-op or condominium board are volunteers and often take time away from work and family as part of their commitment to board meetings, fellow members, and residents.

A board member is elected based on their experience and willingness to be a part of a building's board, which is tasked with the management and well being of the building and it's residents. Sometimes it’s a grand-fathered in position from one family generation to another, and other times it’s simply members who are looking for a way to become more involved in their buildings.

What Does Diversity Mean?

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Over time, the word diversity has evolved and created various meanings depending on the context in which the word is used. Let’s dive deeper.

In previous years - 50 years ago, when a corporate board of directors spoke of diversity they were often referring only to race or gender. Fast forward to today and the word is used to describe gender identity, religious beliefs, sexual orientation, socio-economic status, political preferences, age, and many others variables.

It’s been stated that most co-op and condo boards have changed in the past 5 years to conform with the new characteristics of diversity. Boards now want to have greater diversity among their board members because a diverse board means a better understanding and more options for residents to have someone to connect with when it comes to their various perspectives and situations. 

Choosing a Board Member

In some situations, the co-op board or a building's property management company will post a flier on the buildings bulletin letting residents know there is an opening to serve, only to receive one or two applications. When the candidate pool is limited, board members may be obligated to pick the first candidate who completes an application, regardless of normal board processes.

Does Seniority Over Rule Newbies?

Often, board members are the buildings residents who have lived within the building the longest. Why? Typically, it has nothing to do with seniority and everything to do with the fact of being more emotionally and financially invested in the building.

If you’ve lived in a property for a long time, you'll have some emotional ties to the building. When a new board member comes into play and wants to switch things up, you may be more apt to put your hand up and say, “Now, hold on a minute!” This causes homeowners to become more willing to step up and play the role of board member.

The question at hand – does seniority over rule newbies? In many boards, yes. But today, more and more young families are moving into buildings and want to be involved in what happens, especially if they have young children. The ideal “senior-run” board is no longer the norm.

Successfully Recruiting New Board Members

When a board member opening is up for election, it is important the property management company and the board itself drive attention to the opportunity. They can do this by putting fliers on each floor, in the elevators, on the homeowner’s online portal, sending out emails, etc. Board members should also see the benefits of recruiting new and possibly younger residents into the role.

If you’re a resident, try to get involved. Even though serving on your building's board is voluntary, it could be a great way to meet other homeowners, look after your building, and give you a sense of pride in where you reside.

All Area is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area. 

 

 

 

Topics: Co-Op Board