Publication Date: Spring 1998
COMPARATIVE STUDY OF 1997
Now that the annual meeting season is in full swing, most cooperatives and
condominiums have already received their 1997 financial statements. Now
is the time to forward these financials to CNYC so that your data can be
included in the Comparative Study of 1997 Operating Costs. By studying the
various costs of operating a building, this annual analysis provides a framework
to help you decide if your own building is operating economically and efficiently.
Code numbers are used to identify the participants, preserving the anonymity
of individual cooperatives and condominiums.
The Comparative Study breaks down all data on a per-room basis. It looks
at assessment and mortgage figures and also shows maintenance costs. It
then lists amounts spent per room on wages, fuel, utilities, repairs and
maintenance, insurance, management costs, administrative costs, water
and sewer fees, property tax and debt service. When possible, elevator
maintenance and legal and accounting costs are each listed separately.
The Study also presents summary statistics, calculating the averages and
medians for each item, and the average portion of total operating budget
devoted to each category.
CNYC will close the 1997 Comparative Study in September so as to have
it in the hands of members and subscribers for use in preparing their
OUR 1997 financial statement is important to Comparative Study. Please
forward your annual financial statement and a room count to CNYC before
September 15th so that it can be included. When the Study is mailed, those
that have contributed will be advised of their code numbers so that they
can find their own statistics. Each member building will receive its own
copy of the Comparative Study. Additional copies can be purchased from
CNYC for $5.
COMPLETING THE CONVERSION
Many cooperatives and condominiums suffer because only a small portion
of the units have been sold. Purchasers are frequently unable to resell
their apartments, and when they do, it is at a far lower price than a
unit in a functioning cooperative.
These "low-sold" buildings also experience difficulty in obtaining
financing -- whether it is for the sale or refinancing of units, for an
underlying mortgage, or for a loan for capital improvements.
Furthermore, the purchasers often have little say in the running of their
buildings, as sponsors perpetuate control through the election of individuals
who consistently vote with the sponsor. These circumstances have been
perpetuated during the years when the market for cooperatives and condominiums
With the New York economy strong again, and the climate right for new
conversions, CNYC is redoubling its efforts to solve conversion problems,
both in existing cooperatives and condominiums and in future conversions.
Unfortunately, current conversion law does not clearly obligate the sponsor
to continue selling units until the conversion is completed. Legislation
has been presented in the Assembly by Ivan Lafayette (A-10040) and in
the Senate by Frank Padavan (S-6656) to oblige sponsors to disclose in
the offering plan their intention to rent vacant units, or to obtain board
permission before they rent these units. There is also legislation pending
that will increase the number of insider purchasers required before a
building can be converted to cooperative or condominium status.
On Monday, May 18th, CNYC will hold a meeting on Completing the Conversion
to enable affected members to propose ways to solve their problems, as
well as to organize support for appropriate legislation. If your building
is in this situation, please be sure to be represented at this meeting.
If you have friends in low-sold cooperatives or condominiums, which may
not be CNYC members, please alert them to this opportunity.
BOARDS CONCERNED ABOUT "STRICT
The Premier House case discussed in
the Autumn 1997 issue of the CNYC Newsletter -- in which a court found
that local law permits the City to bring criminal charges for violations
in laws designed to protect the building and its residents -- shocked
co-ops and condos. Many boards have carefully reviewed their insurance
coverage to make sure that the officers and directors policy gives maximum
Lawmakers have also responded to this crisis and legislation has been
proposed in the City Council and in Albany to protect volunteer board
members from criminal liability when they do no willful wrong and conscientiously
meet their responsibilities to their cooperatives or condominiums. CNYC
has taken a strong position in support of this legislation and will continue
to work for its passage. At present there are several bills pending; as
they are consolidated or reconciled, CNYC will contact members with bill
numbers so that you can contact your legislators with support.