Are Co-op Maintenance Fees Negotiable in NYC?

Co-op monthly maintenance fees in NYC are not negotiable. The amount of monthly maintenance (and the rate and frequency of any increases) is set by each co-op’s Board of Managers and ultimately driven by a building’s cost of operations.

The specific monthly maintenance paid by an individual unit owner is determined by the number of shares assigned to a particular apartment relative to the total share count in the building.

Co-op shares in a building are assigned to each unit based on a number of factors including square footage and which floor the apartment is on.

For example, a top floor apartment may be allocated 300 shares compared to only 75 shares for a smaller unit on the second floor. Both monthly maintenance and special assessments are allocated proportionally across individual co-op units in a building based on the number of shares owned.

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Co-op maintenance fees for similar apartments in different buildings can vary widely. This is because each co-op building has its own unique finances, streams of income and associated operating costs. A co-op building’s cost of operations includes: real estate taxes, building repairs and maintenance, staff salaries, utilities, insurance, management fees as well as any debt servicing or land lease payments.

In the case of land lease co-op buildings, it’s not uncommon to see monthly maintenance figures which are three or more times higher than for a comparable apartment in the neighborhood.

That being said, co-op apartments with higher monthly maintenance typically trade at a discount compared to apartments with more reasonable maintenance figures.

A lower purchase price and correspondingly smaller mortgage payment may offset some or all of a higher maintenance figure. A savvy purchaser may utilize a discounted cash flow analysis to compare a less expensive co-op with higher monthly maintenance to a pricier apartment with lower maintenance.

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While co-op maintenance fees and assessments are not negotiable from the perspective of a unit owner, it may be possible as a buyer to negotiate with a seller and ask them to cover some or all of any ongoing or upcoming assessment.

If you’re thinking of buying a co-op but you’re concerned about high maintenance, just remember one thing: monthly maintenance only goes in one direction:UP. All else equal, you should expect to be paying less money for an apartment with higher maintenance.

Before submitting an offer on a co-op with a high monthly maintenance figure, we suggest reviewing the building financials and requesting a 5 year maintenance history from the listing agent.

Co-op monthly maintenance fees in NYC are not negotiable. Maintenance and assessments are set by the board and driven by a co-op's operating costs.

Keep in mind that many of the largest expenses for a co-op building, such as real estate taxes, cannot be directly controlled by the building itself. However, reviewing the financials and the history of maintenance increases should give you a good sense of whether the building is responsibly managing its finances.

If you reach the accepted offer stage on a co-op apartment, your real estate attorney will, among other things, review the financials and co-op board meeting minutes as part of buyer due diligence which happens before you sign a purchase contract.

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As a co-op share holder, you can indirectly influence future maintenance increases and the size of special assessments by voting for board members and/or serving on the co-op board directly. It may be easier to exert more influence in a smaller building, particularly if it is self-managed, since you’ll have easier access to board members.

In conclusion, co-op monthly maintenance fees in NYC are non-negotiable. Once they’re set by the board, co-op maintenance fees and assessments become the responsibility of each unit owner.

Disclosure: Hauseit® and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided.

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