Long-Term Planning Is Essential for Co-ops and Condos

Many co-ops and condos take a narrow approach to long-term planning in an effort to keep a lid on maintenance or common charges, says Ira Meister, president and CEO Matthew Adam Properties, a leading New York property management firm.

“Boards fail to maintain adequate reserve funds and delay or give short shrift to preventive maintenance and neglect making repairs when necessary, or doing just the minimum,” Meister says. 

Boards often smaller ignore repairs resulting in much bigger repairs in the future

He believes this approach can cause the slow deterioration of a property and create more expensive major repairs down the road. When that occurs, the reserve fund is usually too small and a major assessment or significant double-digit increase in monthly charges is necessary.

“This situation can be avoided if the property is forward thinking and develops a long-term capital improvement plan,” Meister says. “In most cases, this is a five-year program that identifies projects that will be required, prioritizes them and identifies funding sources. In fact, the American Institute of Certified Public Accountants has recommended that co-ops and condos include information on the useful life and replacement costs of the building’s infrastructure in financial statements.”

The property manager and team must coordinate to create a long-term plan of repairs and projects.

Preparing a long-term plan requires the coordinated efforts of the property manager, an accountant, the superintendent or resident manager and an engineer. The first step is gathering as much information about the physical plant and systems as possible. Effective superintendents know their building and can pinpoint areas that would require work; in many instances, small matters that could lead to larger projects unless attended to. The engineer would perform a complete inspection of the building including the exterior, the roof, public areas, and systems such as the boiler, HVAC if the building has central heating and cooling, etc. Once this information is gathered, the team needs to prioritize the work based on need and spreading out the cost over a period to lessen the impact in any given year.

Once projects are identified and a cost estimate is determined, the accountant working with the property manager and the board can determine a financing plan. .

“Sound planning with an eye to the future and making the most of the opportunity find improved ways of providing services not only keeps costs down for shareholders and unit-owners, but makes the building more desirable and increases the value of apartments.” Meister says.

How to Hire a Resident Manager

If you are the property owner of a large apartment building or multiple properties around New York City, you may require a resident manager to assist you. However, you should take extra care when hiring a manager and follow necessary protocol to get the right man on the job. The best way to start looking for the right resident manager is to list down their duties and functions. You should also decide on how much you are willing to pay and what their schedule looks like.


Finding the right professional

After you have listed down the manager’s responsibilities, pay, schedule and hours, you can send out an ad looking for prospective managers. When you are contacted about the job, be honest about your expectations and start the process with a phone screening. After you have gathered adequate details, you can call them for a personal interview. If you find any potential candidates, start with a thorough background check for their employment history and other essential details. It is also a good idea to check for their credit score and how they handle money and debts.


After you have chosen the right resident manager, you can prepare a written agreement between the property owner and the manager and list all the terms and conditions. You can also prepare a separate rental agreement. Speak with your lawyer to ensure that all paperwork is in order and you are sufficiently protected from any mishaps in the future. Ensure that you also read up on the laws on hiring resident managers in your state and follow them to the word to prevent legal complications later on.

Online Rental Scams: How Can Landlords Avoid Them?

How to Protect the Best Interests of Your Property

People who are looking to let their properties for rent are becoming increasingly aware of the scams taking place. As a result, a cautious approach is adopted when picking renters. Unfortunately, property owners cannot tell whether or not their rental properties are used in scams. However, the following few tips can help you make your property highly credible to a large pool of prospective tenants.


Scanning Craigslist

An increasing number of people are turning to Craigslist when they look for rentals. Scam artists also use the website to find rental space. Scanning the rentals in your area on Craigslist every now and then can help in ensuring that your properties are not appropriated by scam landlords.


Online Advertising

When putting up a property for rent, property management must be done effectively on the internet. Not only will you have to write an effective description of the rental property, but linking it to a created site will make potential renters view your property in high regard. Since scam artists usually deal in bulk, they won’t have time to create professional webpages, thus putting you ahead on potential suitors’ list.



The property for rent must have a sign that lists the phone number of the landlord. It would help in attracting more suitors if you link your property with a professional property management firm as renters tend to find it easier to conduct business with a company than individual landlords. Advertising the number will help you find tenants quickly.

Keys to a Smooth Management Transition

Probably the most difficult, important and often delayed decision the board of a co-op or condominium makes is deciding to change management companies.  Numerous factors, both realistic and psychological, play into this, but one of the most prevalent is the fear of change and the requirements of getting a new management company up to speed.

Unfortunately, the final decision is often made after communication has virtually broken down with the manager and the company, the building’s services and physical plant have deteriorated and the financial records are in poor shape.

Our Strategic Management Program Uses Sound Business Principles

What many boards fail to understand is that some management companies are organized and prepared to move in, take control and bring order to a deteriorated situation.  At Matthew Adam Properties, we follow the policies outlined in our Strategic Management program.  Strategic Management is our adaptation of sound business principles.  We set objectives and a timetable so our performance and the property’s improvements can be measured.  It is a planned approach to property management rather than the usual band-aide cure.

We follow this approach in the transition process.  As we transition the property into our portfolio, we are cognizant that every detail – every record, every management professional’s decision – must be incorporated into management files for the property.  Our Strategic Management program facilitates the transition process and helps us move quickly when we officially start.   We keep the board informed of our progress and alert it to any problems encountered.

When we are retained, we immediately conduct a full evaluation of the property’s operations and finances.  We then create a customized Strategic Management Plan that includes financial issues, service contracts, maintenance, repairs and long-term capital improvements.  This is reviewed periodically with the board.

Organization and Communication are Key Points in Management Transition

While we are working on the Strategic Management Plan, our transition team is working to get the property up to speed.  In taking control of the process we emphasize two points: communications and organization.  It is important that we develop a solid working relationship with the board.  Often, we find board members wary of property managers after a disastrous experience with the previous company or companies.  We work hard to demonstrate our capabilities and professionalism in getting the tasks accomplished.  In organizing the transition, we follow our Management Transition Checklist and the procedures outlined in our Strategic Management program.  These guide us in collecting the information we need.  In some instances, we have found that bookkeeping is totally disorganized and a great deal of information is missing, or hasn’t been recorded.

The Real Estate Board of New York (REBNY) has instituted a professional pledge signed by most management firms saying they will provide the required records and information.  In reality, often the fired management company is lax or resistant to turning over the records. In these instances much of the needed information can come from the auditor, if he/she is still on board.  Sometimes, the auditor has also been fired making it more difficult to obtain records.

We need copies of maintenance contracts, the general ledger and bills that have been paid or are outstanding.  We also have to understand a building’s cash flow requirements and need to know the schedule and amount of mortgage and real estate payments (for co-ops), the payroll and which residents are delinquent in their monthly payments.

Communication and people skills are a significant part of a property manager’s job description and these talents come into play when dealing with the staff.  Very often, when the previous property manager has been lax in his responsibilities, the work quality of the staff has deteriorated.  The new manager must walk a fine line between acting like a bull in a China shop and wanting to change everything immediately and one who shows his/her authority, but will listen to the employees and work with them to make improvements.

To improve the quality performance of the staff, a manager can modify work schedules and job descriptions, however, the union must be kept informed of changes and the changes must comply with labor agreements.

The building’s superintendent should play an important role in this, unless he is a large part of the problem.

Overall, a professionally organized and implemented transition can be smooth while affording the board an opportunity to evaluate operations and services and discuss additional improvements with the new manager.

A Lobby Designed by a Pre-Eminent Designer

Increasingly the value of apartments in New York is determined in part by what is known as “curb appeal” or the design and maintenance of the exterior of the building and the lobby.  Developers are spending more effort and money today to make the entrances as modern and edgy as possible to attract high-end buyers.

One of the luxury buildings Matthew Adam Properties manages was a forerunner of this type of thinking back in the 1960s, says Ira Meister, president and CEO of Matthew Adam Properties.

Raymond Loewy the Father of Industrial Design

“Plaza Tower, the luxury apartment building at 118 East 60th Street is noteworthy for several factors,” Meister says.  “The 232-unit, 34-story building is a midblock high-rise, just down the block from Bloomingdale’s with an attractive circular driveway and a fountain.  But, most noteworthy and unknown to many is designer of the lobby. It was Raymond Loewy, who is known as the ‘father of industrial design.’ In fact, this is the only residential lobby that Loewy designed.”

While Loewy may not be known to many, the average American comes across his designs almost daily.   Included are the slenderized Coca-Cola bottle, the logos for Shell Oil and Exxon, the interiors of Saturn I and V space capsules as well as Skylab.  He designed packages, cars, appliances, and numerous logos.

Modernize and Keep the Integrity of the Design

“Loewy called his design concept ‘beauty through function and simplification,’” Meister says, “and it is evident in the lobby of Plaza Tower.  When it was time to upgrade the lobby our challenge was to modernize it while respecting the integrity of Loewy’s design.”

Loewy’s open-air design included marble and terrazzo floors, a gold-leaf dome, and an ancient Buddha in a niche.

“We replaced the furnishings without taking away from the design element,” Meister said.

One notable change was in the lighting.  Consistent with the “Green” initiatives in Matthew Adam properties, energy efficient lighting was added that both improved the look of the space, made the lighting more dramatic and reduced energy costs.

“We are proud to have worked with the designer and contractor on this project and were able to respect the integrity of the design done by a pioneer in industrial and consumer design,” Meister said.

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

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.

Creating Value in a Condo or Co-op Part II

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

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)