Habitat Preview June 2012 : Page 4
MIDBORO MANAGEMENT OUR SUCCESS IS BASED ON THE CLIENTS WE RETAIN MANAGING REAL ESTATE WITH LOYALTY, HONESTY AND INTEGRITY SINCE 1963 increasing maintenance, you have to do it.” Using accounting tricks to keep things in check – as some boards do – is dangerous. “We’ve come across buildings that don’t have adequate funds, and we shy away from them,” Rudd notes. “We don’t use tricks to balance the budget.” The list of maintenance sleight-of-hand gimmicks includes: s Borrowing from the reserve fund to make up a budget deficit. “Some people are so stupid that they paint themselves into a corner,” says one management executive, “and then Michael J. Wolfe, President 148 W. 37th St., 8th Floor, New York, NY 10018 e;�c;�b;�a;�a;�b; &�d;%�c;�b;�a; �b; 8 www.midboro.com Levi: When sales are flat – as they were in 2010 – her Brooklyn board has passed special assessments rather than raise maintenance. they need to raise cash to pay their bills. They end up assessing for that, and that’s bad.” s Passing regular assessments to cover costs. “Maintenance is for operations,” says Goodman. “Assessments are for special projects, for capital projects. If you have a problem with the roof and you don’t have the money for it, institute an assessment to raise the money to do that project. But don’t use assessments to cover maintenance.” That advice is often not followed. At Marleen Levi’s Brooklyn co-op, the property inherited a number of sponsor units currently inhabited by rent-stabilized tenants. When those become vacant the board sells them, and uses the income for reserves and long-term capital planning. But this is an iffy proposition. When sales are flat – as they were in 2010 – the board has passed special assessments. “Two years ago, we did a 10-month assessment that helped us stem a shortfall,” reports Levi. s Counting on flip tax income to 16 HABITAT JUNE 2012 WWW.HABITATMAG.COM
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