Question

I live in a Bronxville co-op, and we have had our maintenance fees increased twice in the past two years to account for the drastic increase in energy costs. With energy costs having recently reached five-year lows, shouldn’t my board decrease the maintenance obligations? It seems as though boards rarely ever consider decreasing maintenance fees, and that doesn’t seem fair, particularly during a recession.

Answer

“Co-ops have the legal right to decrease maintenance charges, but in practice rarely do,” said Kenneth Jacobs, a real estate lawyer with offices in Yonkers and Manhattan.

Mr. Jacobs says that even if energy costs have gone down, other operating-cost increases usually eat up the savings.

“Surplus funds are generally funneled to the building’s reserve fund or used to reduce next year’s maintenance increase,” he said. And in a recession, boards consider it even more important to build up a cushion against increased shareholder defaults.

Continue reading…

By Jay Romano

Source: The New York Times – U.S.A.