Q: My co-op in Westchester County is raising again the monthly maintenance fee. As a holder of one of the biggest apartments in the co-op, my quota is going very soon to be equal to my monthly mortgage. What are the consequences of this?
A: Excessive monthly maintenance fees for a co-op building tend to have an adverse impact on the values of the co-op apartments. For a potential purchaser of your co-op apartment, the higher the maintenance charges are, the less will be available for the mortgage payment, which often means a lower value. Sometimes the causes of excessive maintenance charges can make it more difficult for a shareholder to refinance or a purchaser to obtain a mortgage.
In many, if not most, cases, co-ops that already have high maintenance charges and are raising them to even higher levels are not doing it because they are adding additional services that would add enough value to offset the impact of the higher maintenance costs. The board may be in a difficult situation as a result of a prior event or unforeseen condition that forces them to raise the maintenance charges.
Whatever the reason for the increase, a co-op building with high maintenance charges is usually at a competitive disadvantage when compared to a co-op building with similar amenities but lower maintenance charges. This disadvantage could be reflected with lower apartment values in your co-op building.