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Winston Dall…, Home Buyer in

I am looking into buying a coop in Brooklyn (Kensington). The building's minutes report reveals that 13 tenants are currently delinquent.

Asked by Winston Dallas, Mon Oct 21, 2013

13 tenants are currently delinquent in paying their maintenance. Altogether, this number is approximately 12% of the entire building (which has about 110 units).
What is the "acceptable" percentage of delinquent payers in a coop, of which above it I should regard the building as risky? Other than this - the financial report of the building (for the last two years) does not disclose any "red flag".

Thank you in advance!
Roy

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Answers

3
Dear Blumroy:

I am curious, has the buildings reserve fund been increasing or decreasing over the past three years. That is an important thing to look at.

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales/ e-Pro Realtor
Fillmore Real Estate
Office: (718) 252-2000/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Wed Oct 23, 2013
Hi Blumroy
Kathryn gave a very good response to your question. You must also keep in mind these minutes
are generally a month or two later in time so by the time they are released perhaps some of these people have settled their maintenance. also since we do not know the actually reasons, for example there could be repair issues open and then they have a right not to pay, etc. However, if you are truly interested in the apartment I would speak to your attorney for his best advice. maybe he can get some of the answers for you. If you checked 10 other buildings you would probably come up with similar issues. However, you alone knows what bothers you the most. All I can say right now that is one of the hottest areas in brooklyn, so if the apartment is priced reasonably then maybe after speaking to your attorney you can overlook this minor issue. good luck in whatever you decide.
0 votes Thank Flag Link Tue Oct 22, 2013
Hello;
13 tenants out of 110, depending on how delinquent and why; does not seem too bad.
By delinquent is it that some are just always late, so always a month in areas? or are they 3 or more months in arrears? Are they senior citizens on fixed incomes with no bank loans?
In a co-op the monthly maintenance is superior to the Bank Loan any individual owner has on their co-op so if it gets really bad the management can send the bill to the Bank that has the co-op loan. Obviously a co-op does not want to do that just for a few months maintenance that they can see will get paid once the individual has resolved their individual short term problem, because it could send them into foreclosure, but if that does happen the building will get paid by the Bank.
If all the rest of the financials look good as you say, it looks like the building can carry a few short term debtors.
I have sat on many boards and managed many co-ops and condos and it is much easier for a co-op to get paid than a condo when individual owners are delinquent with their common charges, because of the superior lien of the co-op maintenance.
All the best,
Kathryn Lilly, Broker
Realty on the Greene, LLC
718-858-7600
KLilly@RealtyontheGreene.com
0 votes Thank Flag Link Tue Oct 22, 2013
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