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Why Is Your Maintenance Lower than Ours?

Are your maintenance or common charges increasing faster than those at neighboring buildings? If they are, that could be a warning sign.

To determine if it is, you must investigate the reasons for the difference. Remember: costs differ from building to building. That differential could be based on the number of employees, the age of the building and its components, whether the board has been aggressive in dealing with wear and tear, and whether its luck in dealing with the city’s tax assessor has been good or bad.

Moreover, even though two buildings are located in the same area, were built at the same time with an identical number of apartments, and were later converted to co-ops at the same time, a disparity in maintenance charges does not necessarily mean that something is wrong. But the board should be looking into the reasons for the disparity to see if anything needs to be done.

Among the possible causes (and solutions):

Higher labor costs. If both buildings are members of Local 32BJ of the Service Employees International Union and one property has a higher labor cost, the reason could be that it has more employees; it may have doormen and concierge service or elevator operators. Those costs can possibly be reduced.

Higher real estate taxes. One property may have higher real estate taxes than its neighbor. The reason? One building challenges its real estate tax assessment every year and the other does not. One way to bring down costs would be to challenge the assessment.

Higher insurance premiums. In the event the differential is caused by higher insurance premiums, one building may have more risks or a higher loss history. In that situation, the board should find out why the building costs more to insure and take aggressive actions to reduce the costs.

Litigation. If the costs are related to litigation, then the board has to examine whether the litigation makes sense. Is the issue one of principle, or money, or both? Also, is it likely to end quickly or have a resolution that justifies the expenditure?

Capital work. Finally, if the costs are related to capital improvements, Local Law 11 repairs, or other expenses mandated by the city or the insurance carrier, there is little that can be done except, perhaps, do more preventive work to avoid major capital work in the future.

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