Page 48 - NY Cooperator Expo April 2019

48 THE COOPERATOR —APRIL 2019 COOPERATOR.COM by financing it or assessing the owners, Wollman says: “It depends on the clien- tele in the building. The economics of an assessment may be too expensive for the residents. In an environment where mon- ey is cheap, it may pay to go with financ- ing. The increase in costs to the owners will show up in their maintenance, and will be only a few dollars a month per each apartment – so no real pain.” Con- versely with an assessment, they might be forced to come up with a large sum immediately, or relatively large sums monthly for some period of time. Not ev- CAPITAL RESERVE... continued from page 35 acerbate a problem. “We’ve had situations where some people just act kooky, and other scenarios where residents are truly in need of an in- tervention. If it’s a really serious matter, then you can call the local police of course. “In New Jersey, we’ll often have situ- ations with elderly folks who are living alone, and they’re potentially being ne- glected or cannot take care of themselves, or it may be a behavioral health issue on top of a medical issue. Every county in the state has something called adult protec- tive services, or APS. We’ll call their office in these situations to see if they can look into things. And certainly, if there are oth- er family members available locally, we’ll reach out to them to intervene and indicate that there’s an issue. “In New Jersey there is also mandatory alternative dispute resolution (ADR), so we might use that process to sit down with the resident, approaching them in a kind and relaxed manner, and engage a dialogue, as- suming that they are both cognizant and cogent enough for that process to have merit. “The worst thing that people can do is to be confrontational with those who have sensitive behavioral issues. There are peo- ple who absolutely need to be attended to, medicated, or even institutionalized. The test in New Jersey is, ‘Are they a danger to themselves, others, or the property?’ And at that point it becomes a police matter. “We had an elderly woman in a co-op who was living alone; her kids had aban- doned her. She had a continence problem, and when you got off the elevator in the co-op building you could smell the urine. Eventually she was noncompliant in so many areas that we had to file legal action to evict her from the co-op. But it actually worked out, because she called legal ser- vices, and legal services called APS, and finally out-of-state family got involved and placed her in assisted living near a relative – which should have happened long prior. I obviously felt bad dragging a 75-year-old to court, but it actually was in the best inter- ests of everyone involved. We had a kind, sensitive judge, good legal professionals, and we did what her family should have done for her long ago. “But every case is different in my experi- ence and, if management can’t solve some- thing, get on the phone with a lawyer, be- cause we have the resources and deal with this quite frequently.” n Mike Odenthal is a staff writer/reporter for The Cooperator. MANAGING... continued from page 37 be mainly climate-based,” notes Malone. “What’s really important for a geothermal field, in order for it to be both economi- cal and functional is that you’ve a more balanced climate. You want your heating and your cooling loads to offset each oth- er. Chicago is at the upper end of that. In Tempe or Fort Lauderdale or what-have- you, you’re always cooling. For geothermal to be successful, you want to be putting heat into the ground during the winter and removing heat during the summer. “The area in which you live will inevi- tably impact performance,” Malone con- tinues. “Projects in Chicago have very well-performing ground conditions, but in other areas those may vary. Out west, for example, you’d have to install more wells to get a comparable performance, which would add to the cost of your geothermal field.” Complications aside, Malone is op- timistic for the future of geothermal in residential properties. “It improves the value of a house or an association,” he says. “Green energy is very marketable and improves the value of the house while protecting against utility rate increases, and people are growing more cognizant of that. For anyone looking for a home that has those features, I think they’ll find that geothermal is quite impactful.” n Mike Odenthal is a staff writer/reporter with The Cooperator. GEOTHERMAL... continued from page 39 in the building. “It doesn’t happen often, though,” she says. “Boards don’t like to admit it, but they are trying to maintain high values in their buildings.” Hardy points out correctly that most condominium association governing documents have a right of first refusal clause, which gives the board the right to buy your unit at the same price you would sell it, if the board doesn’t want to approve the sale. In the event an agreed price was too low, the board could buy the unit for that price and try to sell it for more. But the board also might end up selling it for less. In the end, pricing, like valuation, is both an art and a science. Marks sug- gests the following to anyone seeking to obtain the services of a listing agent to sell: “First, they must see the place. Sec- ond, the seller must get a survey of opin- ions and take the advice of professionals. Third, make sure the unit is properly marketed and properly priced.” The broker you choose should be ex- perienced in your market and building. Ask for credentials, references, and a his- tory of successful transactions! n AJ Sidransky is a writer/reporter at The Cooperator, and a published novelist. WHAT THE MARKET... continued from page 47 eryone can afford that. The Difference for Condominiums The main difference for condominium owners when it comes to reserves and major capital improvements is that their financing options are more limited. In a co-op, the owners own shares in the corporation that owns the building. The building is intact as collateral, so as a cor- poration, they can borrow money against the property. But in a condominium, each unit is owned as individual real estate. No mortgage can be put on the entire prop- erty. Financing for capital improvements, as opposed to large upfront assessments, is available. Seligman explains that National Co- operative Bank has a special program for condominium buildings. The loan is treated as an unsecured loan. Liens are put against the condominium’s cash ac- counts, such as its operating accounts and any reserve accounts they may have. The loan is made for 10 or 15 years, and is self-amortizing. The monthly cost of the financing is built directly into the con- dominium’s common charges. It’s cash- based lending and, like the options for co-ops, can take away some of the sting of a large one-time assessment. Capital reserves are an important and prudent component of community fi- nancial management. Even in a new or well-built and well-maintained building, something inevitably will go wrong and need repair. “What you have in reserves may never turn out to be what you need,” Wollman points out. He cites a real-life situation in which a co-op had a large reserve fund, but then suddenly needed to do a $650,000 elevator project. Rather than depleting itself completely, the co-op raised $325,000 through an assessment implemented on a monthly basis, and took $325,000 from its reserve fund. “When you know what you need, over what period of time, then you determine how to raise the money, assessment or debt,” Prisand says. Or a combination of both. n A J Sidransky is a staff writer/reporter with The Cooperator, and a published nov- elist. NEW YORK HILTON MIDTOWN — THURSDAY, APRIL 11, 9–4:30 FREE REGISTRATION: COOPEXPO.COM THE COOPERATOR EXPO 2019 WHERE BUILDINGS MEET SERVICES THE BEST TIME TO FIND AN EXPERT IS BEFORE YOU NEED ONE.