Tag Archives: co-ops

Legislature Extends NYC’s Co-op/Condo Property Tax Abatement

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Several months ago we discussed the failure of the New York State Legislature to extend the property tax abatement for co-ops and condos, says Ira Meister, president and founder of Matthew Adam Properties, Inc., a premier property management firm.  Well, the good news is that earlier this year, the  legislature voted to continue the abatements, though with several significant changes.  However, the legislature’s action came too late to include the abatements in the 2012/13 fiscal year, so they will be applied to the 2013/14 taxes.

The legislature also failed to make permanent the abatements, which have been authorized with continuing legislation since the late 1990s, Meister notes.

The impact of the abatement is significant. “There are approximately 365,000 co-op and condo units in the city and the city estimates the abatement saves these taxpayers on average approximately $1,200 per unit,” Meister says.

Condo owners pay the property tax directly to the city.  For co-op shareholders, the tax is included in the monthly maintenance charges.

The most significant change is in eligibility. To qualify, the unit must be the primary residence.  If not, the abatement will be phased out and completely removed for the 2014/15 fiscal year beginning July 1, 2014.  If the eligible taxpayer owns three or fewer units in the building, all  are eligible for the abatement.  If four or more, none are.  The city’s Department of Finance is checking income tax records and other filings to ascertain whether the unit is the primary residence.

The abatement is based on the assessed valuation of the property.  For fiscal year 2012/13 it is 25% for properties assessed at $50,000 or less,  22.5% for properties between $55,001 and $55,000; 20% for those assessed at $55,001-$60,000 and 17.5% for those assessed over $60,001.

The abatement increases again in the next two fiscal years for all except the highest level.

Before the extension, the abatement was 17.5% for all units valued at more than $15,000 and 25% for those assessed at $15,000 or less.

“Remember,” Meister says, “this is the assessed valuation based on a complex formula and not the market price of the unit.

“While the new legislation increases the abatement for co-op shareholders and condo owners, it still assesses them at a higher rate than owners of single-family homes,” Meister says.

Ira Meister’s Fire Safety Tips

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.Since childhood, we’ve repeatedly heard tips on fire prevention and what to do if there is a fire

“While most of us have heard these tips, they bear repeating,” says Ira Meister, founder and CEO, Matthew Adam Properties, a leading property management company. “And remember, one of the easiest and most important steps is to check the smoke and carbon detectors in the apartment.”

When clocks are moved each spring and fall, there are announcements that residents should check their detectors, Meister points out.  Unfortunately, many people ignore this.  It is easy and takes less than a minute.  Each detector has a test button that can be pushed to see if the battery is charged.  The city recommends changing the battery every spring and fall.  Detector batteries also give off a shrill sound when they are dying, a sign to replace them. These detectors, by the way, are required for all apartments under city law.  The city also recommends changing smoke detectors every 10 years and carbon monoxide detectors every five to seven years.

In addition to having the detectors in apartments, buildings should place them in the hallway as well as in incinerator rooms and the garage, Meister says.

Ira Meister Keeps His Residents Safe and Secure 

Equipment that should be checked periodically by building staff are the sprinklers and standpipe located in stairwells to make certain that all are working properly.  This can be done by outside contractors.  Yet, Meister believes the best procedure is to have it done by the superintendent, who has been received certification from the city.  Certification requires taking an approximately 25-hour course and passing a written exam.

The benefit of having certified staff is two-fold, Meister says. The inspections should be conducted monthly and doing them in-house is much less costly. Secondly, in the event of a malfunction, personnel are on-hand who are familiar with the system.

Residents, particularly those with children, should develop a fire evacuation plan and also remember to obey Fire Department instructions.  This would include knowing when to leave an apartment, and when to stay, having an escape route to the exits in the event of a heavy smoke, arranging for a meeting point and what to do if it is best to stay in the apartment.   As a quick guideline, Meister says, fire travels up, so if the fire is below, evacuation should be considered.  If the fire is above the apartment, it may be best to stay in the unit.

There is considerable literature available on fire safety from the city and Fire Department.

“It doesn’t take much time to be prepared, and it can save lives,” Meister says.

The Importance of Good Communications

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“After many years in property management, I know that good communications is essential to successful management,” says Ira Meister, President and CEO, Matthew Adam Properties.  He notes that often problem arise because good communications is lacking.

To counter this, Matthew Adam Properties asset managers are trained to be good listeners and to be pro-active.  “It’s not only promptly replying to phone calls, text messages or emails,” Meister says.  “It includes visiting the properties and talking to board members, staff and residents.  A few words with someone can alert the manager to a potential problem or help resolve an issue quickly.”

Another vital area of communications, Meister says, is alerting residents to repairs in the building that can cause temporary service disruptions.  A while back, residents were notified by a sign in the elevator, or in the lobby, telling them that the elevators may be shut down for a few hours or maintenance of the boiler will curtail hot water for several hours.

Ira Meister Keeps His Residents Notified and Up to Date With Building Events and Changes

Today, there are numerous ways to notify  residents.  Meister says that Matthew Adam Properties works with a company called “My Building” to help communicate with residents.  A website is customized for each property to provide numerous services to keep residents informed, make maintenance and service requests, notify them of package deliveries, or to make monthly maintenance, common charge or rent payments.

The system provides various options to notify residents of upcoming service interruptions, emergencies or building news.  Most visible is a monitor usually located at the  front desk or in the mail room that shows by unit number whether there is a delivery to be picked up.    The monitor also shows current information about service interruptions or building news as well as reminders of building policies.

Other means of communication include text messages and phone alerts.

“The use of technology has greatly increased our ability to communicate with residents in real time,” says Meister.  “While useful and needed, technology does not replace the personal contact and quick response time to messages that are at the heart of excellent management.”

 

Creating Value in a Condo or Co-op Part II

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The “curb appeal” of a property sets an immediate impression for a visitor or prospective buyer, says Ira Meister, President and CEO, Matthew Adam Properties, a leading property management company.

“Starting with the landscaping (if there is any) and the entryway it follows as one enters the lobby,” Meister says.  Frayed or dirty furniture or rugs are a total turn-off and can immediately kill any initial interest by a prospective buyer.  The same with peeling paint and dirty carpeting in the hallways.  Some buyers may even look in the laundry and garbage chute rooms to see their condition. These areas say a lot about the upkeep of a property and the attention to detail.

Amenities also come into play. “Older buildings have to compete with newer, amenity-laden properties,” Meister notes.   A desired amenity for many is a health club or gym.  If an older building lacks such a facility, the board and asset manager should explore the feasibility of creating one.  Another possibility is creating or upgrading the roof deck so it becomes a desirable location rather than “tar beach.”  “In one East Side property, we took unused basement space and created a playroom for young children, which is very popular and a real plus for the building,” Meister says.

The attitude and performance of the staff are key, Meister says.  Poor morale leads to lack of attention and sloppiness.  Residents have daily contact with the staff and their attitude, work ethic and capabilities are important in the successful operation of a property.

Finally, technology. In the past decade or so, technology has begun to play an important role in keeping residents informed, and managing the operations of the front desk and the building.  Using technology increases efficiency, can reduce costs and create value.

It is clear that the asset manager plays a significant role.  In fact, the professionalism and capabilities of asset managers and the company they work for help create value.  “People who have sound management abilities, an understanding of mechanical systems, sensitivity to keeping a lid on costs, attention to detail, good people skills and a drive to make the property a showplace are the keys to creating value,” Meister says.

“This is one reason we at Matthew Adam Properties devote time to hiring, training and, most importantly, retaining our asset managers, many of whom have been with us for several decades.  Their knowledge, experience and dedication are behind our creating value.”

Creating Value in a Condo or Co-op Part 1

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If apartments in two different co-ops are essentially the same in terms of size, location and amenities, why is one getting a higher price per square foot than the other?  Could it be the uniform and demeanor of the doormen?  This might sound like a small detail, but first impressions are vital in determining a sale and price, says Ira Meister, President and CEO, Matthew Adam Properties, a leading property management company.  Paying strict attention to details is essential to creating value in a co-op or condo, one of the prime goals of a residential property management firm.

Meister says that Matthew Adams Properties feels so strongly about viewing a home as an important investment that it calls its managers asset managers.  “They are there to preserve and increase the asset value of the property, and thus the sale price of the units,” Meister says.

Ira Meister Adds Value to Condos and Co-ops, Improving Living Experience

Numerous factors contribute to creating value, some, such as the condition of the building, are obvious.  Others, such as the demeanor and look of the doormen, are less dramatic.           Here are some factors that add up to creating value in a property:

“One of the most important is the financial condition of the building,” says Meister.  How large is the reserve fund, is there debt, are the maintenance charges too high in relation to similar properties and have the monthly charges increased dramatically in the past several years?

These are factors that buyers and their attorneys should consider.  “We place great emphasis on finances, not only making certain that the books are current — it is surprising how many co-ops and condos have poor bookkeeping — but we also work to keep down expenses through controls as volume purchasing, careful scheduling of staff and use of the latest technology to reduce energy costs,” Meister says.

Part of this is the maintenance of the property so that all systems are kept in good, efficient working order.  If periodic maintenance of the boiler, for instance, is not maintained, the system will probably work less efficiently and use more fuel than it should.  Periodic checking of the roof is important to detect problems early to reduce the possibility of damage to apartments and to repair the problem early, before it becomes more costly.

(To be continued)

Cleaning up After Winter’s Blast

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“Though this winter has been relatively mild, it can still leave a bleak mark on buildings and their landscaping.  While New Yorkers are thawing out in March and April, our asset manager are inspecting for damage and  repairing winter’s ravishes.”, says Ira Meister, president and CEO, Matthew Adam Properties, Inc.

Areas include landscaping, terraces, the roof, windows and air conditioning, whether window units or a central system.

Starting at the entrance, we look at plants and trees and also check for salt damage to tree planters, plants and flower beds.  The city uses rock salt to melt ice, which kills off almost anything in a planter. We also check for any cracks at the entrance.

Meister says another area to check is setbacks and roof terraces for water/ice damage and to be certain the drainage pipes are not clogged.  It’s a good idea to snake out the pipes every year.

This is also the time for a general clean-up of the building and the common areas after several months of people trudging through the lobby and halls with snow and slush on their shoes and boots.

The roofs are visually checked by our asset managers and the superintendent/resident manager for any ice-caused damage and leaks.  “In fact, they make period inspections during the winter, particularly to make certain the drains are not clogged,” Meister says.

Residents should check windows and window air conditioning units for leaks to ensure maximum efficiency and arrange for vacuuming of condensers, changing filters and flushing the coils.  If the unit was removed during the winter it needs to be replaced in compliance with city regulations. .

“We instruct all our asset managers to visually inspect buildings with window units to be certain they are in compliance,” Meister says.

In buildings with central air conditioning, the HVAC unit and the cooling towers are checked with the towers tested for efficiency at least every five years. Loss of efficiency translates into significantly higher expenses.  While this benchmark is usually done in the fall, it can be done this spring if the cooling tower check has not been conducted for five years.

“While our asset managers and superintendents/resident managers continuously inspect a building during the year looking for potential problems and areas needing repair, we urge resident to be alert and let us know if they see something that needs attention,” Meister says.  “For smooth building operations and to reduce costs, it is much better to find a problem before too much damage has been caused or when damage can be averted.”

The New Generation in Co-Generation

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“There were many lessons learned from Hurricane Sandy.  For example”, says Ira Meister, President and CEO Matthew Adam Properties, “we learned that hi-rise buildings are not immune to power outages caused by flooding that can affect a single property or a wide area.  When this occurs, a separate back-up generator is needed to maintain power, but that is expensive.  Now, however, there is a way to have a continuous operating back-up in a system aligned with a co-generation.”

The back-up generator called “Black Start” is produced by Tecogen, a leader in the field of co-generation.  Matthew Adam Properties is working with Tecogen to evaluate the installation of co-generation in several buildings it manages.

Peter Goldsmith, Field Sales Specialist, Tecogen says. “Since Sandy, we’ve been getting at least a call a day inquiring about ‘Black Start.’”

Originally, co-generation involved using the steam produced by boilers to power generators in buildings. This, however, required electric power to keep the water heaters and boilers operating.  Meister says the Tecogen system his company is exploring (called CHP, “combine heat and power”) generates electricity using a natural gas-fueled engine, which immediately reduces electrical consumption. Natural gas is cleaner and more efficient than oil and less costly than oil or steam.

Meister says that while working with Tecogen the company explained how CHP could be used to provide energy in the event of a blackout or situations such as occurred with Hurricane Sandy when flooding caused Con Ed to lose power in much of Manhattan below 40th Street.  Rather than having a separate generator which would be costly and dependent on having sufficient fuel to operate, the emergency generator component of the co-generation system runs continuously and can be utilized for an emergency, though not at full power.

There are financing incentives through NYSERDA (New York State Energy Research and Development Agency) that can reduce the initial costs.

During Sandy, a large residential co-op in southern Manhattan benefitted from having the Tecogen co-generation system with the back-up generator. When Con Ed cut power, Tecogen’s proprietary inverter and microgrid technology continued to provide power for the building.  The system powered the entire building and ran 24/7 under computerized control from an off-site monitoring station until power was restored by Con Ed.

Matthew Adam Exploring Co-Generation for Properties It Manages

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Co-generation, the reuse of energy to power systems, has been around for a while in a variety of forms and uses, notes Ira Meister, president and CEO, Matthew Adam Properties, Inc.   It has gained increased interest in the past decade with the expansion of efforts to reduce global warming, enactment of stricter government regulations and the desire to control skyrocketing energy costs in larger buildings.

Matthew Adam Properties, a leader in bringing “Green” initiatives to the properties the company manage, has instituted a program to evaluate the installation of co-generation in several buildings, Meister says. It has been working with Tecogen, a leader in the field of co-generation.  The company is currently performing financial feasibility studies at several buildings. Initial findings indicate Tecogen’s natural gas system can reduce carbon emissions and costs.

“While still in the preliminary stage, the study indicates we can reduce a building’s electric bill by 50 percent, in addition to savings in heating water,” Meister says.

The Tecogen system (called CHP, “combine heat and power”) generates electricity using a natural gas-fueled engine, which immediately reduces electrical consumption.  Natural gas is cleaner and more efficient than oil and a less costly energy than oil or steam.

In co-generation, the “waste” heat produced by the natural gas-fueled engine is recovered and replaces fuel used to operate the water heaters and boilers.  The “waste” heat can be used in conjunction with an absorption chiller to convert the heat into cooling and relieves the chillers (typically electric powered) of providing much of the site’s air conditioning.

“When Tecogen completes its study, we will have a better understanding of the benefits of installing co-generation and help us determine which buildings would benefit,” Meister says. “We, at Matthew Adam Properties, believe that co-generation can help us resolve several issues we confront as managing agents – improving services, reducing costs and adapting ‘Green’ initiatives.”

Meister says the co-generation program is part of Matthew Adam’s overall program to use innovative thinking and a professional approach to provide quality management for the buildings in our portfolio.   The “Green” efforts are spearheaded by our Sustainability Division headed by Kendra Stensven.  Kendra is LEED certified, making Matthew Adam Properties one of the few, if not the only, management company with a LEED certified person heading a “Green” division

Why Co-ops and Condos Pay Higher Property Taxes

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Much has been written and discussed in recent months about the failure of the New York State Legislature to extend the property tax abatement for co-ops and condos, notes Ira Meister, president and founder of Matthew Adam Properties, Inc., a premier property management firm.  The discussion has focused on the failure of the legislature to take action during the session that ended in June and the need to make permanent the abatements, which have been authorized with continuing legislation since the late 1990s.

The city included the abatement in the tax bills due on July 1 of this year and again on October 1, assuming the legislature would take positive action in an anticipated special session after the election.

The impact of the abatement is not insignificant. “There are approximately 365,000 co-op and condo units in the city and the city estimates the abatement would save these taxpayers about $430 million or $1,194 per unit,” Meister said.

Condo owners pay the property tax directly to the city.  For co-op shareholders, the tax is included in the monthly maintenance charges.

The property tax is based on the assessed valuation of a property.  “Here, is an issue that has been pushed into the background and is another quirk in the system that works against co-ops and condos,” Meister explained.

To the average voter it would seem that the entire New York City legislative delegation would be pushing to have the abatement passed.  But, Meister said, this is not the case and he attributed this to underlying factors. Most noticeably is the city’s practice of categorizing co-ops and condos as profit-making corporations. The city has four classes of properties and taxes co-ops and condos similar to rental properties, rather than as single family homes. “The difference is dramatic,” Meister said.

To determine the assessed value, the city applies a complex ratio to each of the four categories. For example, a single family home valued at $1 million has an assessment ratio of six percent and the assessed valuation would be no more than $60,000.  For a condo or co-op, the ratio is 45 percent and the assessed value would be no more than $450,000.

“The net result is that the condo owner or co-op shareholder is paying nearly six times more than a single-family owner,” Meister said.  “That hurts.”

A change would require a request to Albany from the City Council, Meister explained, where the majority of councilpersons represent owners of smaller properties who do not want the imbalance corrected.