I need to raise Common Charges Again - When do I tell People?

[Anonymous]

Also...you haven't had a condo meeting with quorum for over 10 years? Isn't that illegal? Or did you get proxies?

I think more of your owners need to get uncomfortable and get involved. You need more of a consensus than you have.

[Anonymous]

Shop for different insurance companies (really just to demonstrate due diligence, you aren't going to find a deal). Then hold a special meeting and provide options - big special assessment and smaller monthly assessment increase, or bigger monthly assessment.

You can’t hide from math or flood insurance increases.

[Anonymous]

Anonymous wrote:Also...you haven't had a condo meeting with quorum for over 10 years? Isn't that illegal? Or did you get proxies?

I think more of your owners need to get uncomfortable and get involved. You need more of a consensus than you have.

Per NYS Law you have to have one annual Board Meeting a year. We had them every year up to Fall of 2019. We normally did them from 1979 to 2019 (I only bought 2013) every year after Labor Day and before Jewish Holidays. We had some "snowbirds" in building who went to Florida in Winter and a decent amount of Jewish People. No one wanted to meet in Summer as everyone at Beach. Then in 2020 Covid everyone refused a meeting. We had a lot of older people. In 2022, 2022 and 2023 happened. Finally in Feb 2024 the New Managing Agent we switched to was kinda shocked we had not had a board meeting since 2019. We did a mailing and maybe 2-3 people interested and no one returned proxies. So we said screw it lets call it a Meet and Greet. We booked Town Hall across street they always let us use for free from 1979-2019 when we did have meetings. The managing agent was there. CPA was there and the active person on Board there ready to answer questions. Three or four people showed up. One for 30 seconds to say Gutter is loose and two old people.

I am not hiding I let managing agent deal with it and when I do talk to people they are all happy. My bylaws are pretty strict I need a vote to borrow funds, do any new improvements over $5,000. But the board can maintain building no vote, can raise common charges no vote and foreclose on units and file liens no votes. All we do is keep building looking nice and make sure people pay. As long as lawn mowed, flowers planted in spring, gutters cleaned, snow removed, sidewalks maintained, fences mainted etc. No one cares. They litterally put a ticket in on website for that type of concern. If normal stuff managing agent deals with landscaper. It bigger like a gutter ripped off, or portion of fence a tree branch felll on I get a text with picture of damage, managing agent gives me quotes and I approve. Occassionally me and other lady will also get our own quotes to make sure he is honest.

But the insurance time bomb is going to be a long time thing. It is a 1979 complex with basement level garden apartment units. When building built in 1979 it was not in flood zone even though at beach. Town had a two story height requirment. Builder to make money decided to do six buildings with two units of 1,200 sf 51 percent. below ground level so they counted as basements and four units that are duplex upstairs that are 600 sf each level. So Issue is we have units that are slightly more than four feet below ground level in a flood zone by the beach. I cant raise building and I cant buy out lower units. I actually can only buy units in a foreclosure auction per byllaws for non payment of dues without a vote. No one would vote to do a massive assessment to buy them out and some owners might not want to sell.

also 2/3rds of buildings are uppers who have zero flood risk. Not even in Sandy. My unit my ground floor is almost five feet up. So the 2/3rds of uppers have head in sand and lower unit owners would need in our 30 unit building at least 16 owners to vote to buy them out. Good luck with that.

However FEMA that gave us heavily subsidized flood insurance for decades as we were grandfathered the rules have changed and moving towards full risk. And other insurance after collaspe in Florida of condos and after Sandy are jacking rates. I even tried on my own and the insurance company pulled up Googe Maps and was like Hell No before we started.

I will be at $550 insurance only by 2027 per unit my projections. The $150 a month to maintain building will soon be $200 a month by 2027 as my locked in landscaping, snow removal, extermator and Sewer cleaning contracts get renwed. And Although building is mint My roofs need replacing by 2030 which will cost $200,000. I was told by roofer starting around 2029 I could do worse one once or twice a year to spread it out. But that will be $40,000 each time. Even it I did it over 10 years that is $20,000 a year I need for that is $55 a month.

So I am at $755 common charges by 2027 and to be honest I need to do at least $45 more to build up reserves for sidewalks or parking lot upkeep. So I should be at least $800 by 2027.

A big move from $350 in 2023. The larger fancy condo up the block from us with 2,400 sf units with pool and gated community moved their common charges from $750 to $1,500 two years ago in one shot. They are Oceanfront in a high risk area and units also have full basements.

Word to wise DONT buy condos in Flood Zones with basements! Even if you live upstairs. The insurance is a killer. I still feel no matter how I say it I will be killed.

[Anonymous]

Anonymous wrote:You can run the meeting by Zoom.

People get mad about spending money. But in a condo a lot of planning work is done by others for free.

As long as you're being ethical, let people rage. The money has to be paid. You have to plan ahead for the increased costs.

I view this the same as if I bought a single family house and had an unexpected expense like the furnace quitting.

I also think it's better to put the charges on longer-term residents who have benefitted from artificially low dues. If they know people with single family homes they know those people have faced a lot of inflation.

The longer term people did not benefit from lower common charges as the hike is for the Insurance Bills mainly that is only for owners now. If insurance did not rise so much we would be fine. And the fact my renewing Landscaping, Snow renewal type cotracts will all renew higher. So the sudden hike in costs is issue.

[Anonymous]

Anonymous wrote:

Anonymous wrote:that is a crazy high increase. People will not be happy.

I know. But there is zero Fraud going on. The condo is on a barrier island between bay and beach. FEMA Risk 2.0 is causing subsidized rates to move up 18 percent each year and my other insuance is up 100 percent in last five years. The running building is only $150 a month per unit. The insurance is like now $350 per month per unit.

It is hard to explain to people that say all I get is lawn mowing, snow removal, gutter cleaning, sprinklers, outside lights, blacktopping driveways, powerwasking fences and painting railings etc for $550 a month when I raise it. When in reality they are getting all of that for $150 a month. It is the insurance that is killing us.

We can see the Ocean and Bay from our sidewalk at same time. No insurance really wants us unless a lot of money .

Some people are visual. Make a pie chart called, where does the monthly Common Charge go? Do one overall, the full budget, and another that breaks down the monthly amount. The organization can not operating with $0 in reserve. I am surprised people do not understand that.

I will add that as a SFH owner, we pay $450/mo for lawn, yard, gutter, etc. Snow removal is extra csot. Blacktopping driveway is extra. Powerwashing is extra. Painting anything is extra.

[Anonymous]

I would present what the condo dues should be and then propose that you phase in an increase to that dollar amount over the next 3 years. And on top of that I would propose a bylaws amendment that automatically raises condo dues by the same percentage as inflation (I would actually pick the same percent that social security goes up). Unless either 3/4 of the board of directors or 3/4 of the owners determines that a lower amount should be imposed.

I would also look at what raising your flood insurance deductible would do to premium and likewise what continuance as to 10-20% of repairs would. With the latter you need to build the reserves even more though.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You can run the meeting by Zoom.

People get mad about spending money. But in a condo a lot of planning work is done by others for free.

As long as you're being ethical, let people rage. The money has to be paid. You have to plan ahead for the increased costs.

I view this the same as if I bought a single family house and had an unexpected expense like the furnace quitting.

I also think it's better to put the charges on longer-term residents who have benefitted from artificially low dues. If they know people with single family homes they know those people have faced a lot of inflation.

The longer term people did not benefit from lower common charges as the hike is for the Insurance Bills mainly that is only for owners now. If insurance did not rise so much we would be fine. And the fact my renewing Landscaping, Snow renewal type cotracts will all renew higher. So the sudden hike in costs is issue.

OP, you seem like a very conscientious person. I think you just need to share the bad news. I wouldn't phase in the increase super gently. Make them a bit mad. If you raise it gently, some may sell out to avoid what is coming. And the new people will feel tricked if there are steep hikes within two years of buying. And then you'll have new angry owners with less appreciation cushion. In fact, I wouldn't have bought into a condo with zero reserves. It's always best to socialize bad news quickly.

Also, my point about past costs is they should have been higher because now you have $0. Like the person said who is paying $450/mo for their sfh services. All of my condo's costs are way up post-Covid.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You can run the meeting by Zoom.

People get mad about spending money. But in a condo a lot of planning work is done by others for free.

As long as you're being ethical, let people rage. The money has to be paid. You have to plan ahead for the increased costs.

I view this the same as if I bought a single family house and had an unexpected expense like the furnace quitting.

I also think it's better to put the charges on longer-term residents who have benefitted from artificially low dues. If they know people with single family homes they know those people have faced a lot of inflation.

The longer term people did not benefit from lower common charges as the hike is for the Insurance Bills mainly that is only for owners now. If insurance did not rise so much we would be fine. And the fact my renewing Landscaping, Snow renewal type cotracts will all renew higher. So the sudden hike in costs is issue.

OP, you seem like a very conscientious person. I think you just need to share the bad news. I wouldn't phase in the increase super gently. Make them a bit mad. If you raise it gently, some may sell out to avoid what is coming. And the new people will feel tricked if there are steep hikes within two years of buying. And then you'll have new angry owners with less appreciation cushion. In fact, I wouldn't have bought into a condo with zero reserves. It's always best to socialize bad news quickly.

Also, my point about past costs is they should have been higher because now you have $0. Like the person said who is paying $450/mo for their sfh services. All of my condo's costs are way up post-Covid.

NY is totally different than DMV. After Sandy in 2013 we had a net worth of negative $120,000 as had a loan outstanding for roofs from 2008 that was a ten year loan. I joined board and I fought with Fema and insurance and reopened flood claims spending maybe 800-900 hours of my own time on my own and we got and extra $250,000 in late 2014. Our loan was to be fully paid off in 2018 so in good shape.

Some owners started in they want that “windfall divided up” and I send checks out. So we repaved parking lots, painted rails, did cement work, updated signage, new LED lights and power washed building, updated Landscaping to catch up all over due maint and then lowered common charges to $350 in 2018 from $500. I tried to not hand out checks. But with lower common charges coming in and insurance creeping up then rapidly rising the roosters have come home to roost.

No good deed goes unpunished. Hence reserves got low. But building was all caught up. Then insurance rate hike storm hit.

We have a decent amount of new owners since 2018. Once buildings looking great wirg low common charges then with housing bubble since 2020 the new owners are much richer. Most of retired people from 2012 sadly are dead now. They could afford the rate hike more easily than the residents on 10 years ago, so don’t think anyone will be distressed just mad.

[Anonymous]

This chit right here is why I will never buy a condo.

[Anonymous]

Anonymous wrote:This chit right here is why I will never buy a condo.

Dont blame you. But I am hoping folks dont think it is a magic trick we charge $350 a month while all the other condos in flood zones of same size charge $700 a month.

It was mainly due to getting the big check I got them from reopening claims. And we blew through that money the last 7 years due to rising costs.

[Anonymous]

Sympathetic to your situation, but the FEMA (almost) free ride had to end. People have to understand that, bottom line, the federal government is no longer covering most of their insurance premium.

You are very good at explaining the situation. If residents don't understand they're being willfully thick.

As the saying goes: Bad news doesn't get better with time. Off like a bandaid.

[Anonymous]

I would quit and sell.

[Anonymous]

Anonymous wrote:This chit right here is why I will never buy a condo.

That’s right. Condos are a sucker investment. Especially near water.

[Anonymous]

You have a seriously thankless role here. Flood insurance rates are set by NFIP so there isn’t going to be variability by shopping around. And you need to get the bills paid plus reserves built back up. You aren’t going to make your condo owners happy. It’s a no win.

But kicking the can down the road isn’t a solution. You all need a regular maintenance and replacement schedule so that costs are spread out and planned for.

Thing is, everyone who owns there should be anticipating these issues. Most important thing is to be transparent and honest. Good luck.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This chit right here is why I will never buy a condo.

Dont blame you. But I am hoping folks dont think it is a magic trick we charge $350 a month while all the other condos in flood zones of same size charge $700 a month.

It was mainly due to getting the big check I got them from reopening claims. And we blew through that money the last 7 years due to rising costs.

I understand your position. I wouldn't have lowered the charges, but I understand why you did. You can refer to that previous lowering as evidence of your prudence and concern for community wishes. Now it's time for the pendulum to swing in favor of the overall community's needs vs. returns to individual owners.

Stick to your guns. You are doing good work and they have free time and conscientious oversight while doing nothing. They owe you respect. Let them complain. Rare is the co-owner who steps up to take on the work after grousing.