Sep 14, 2018

By: Andrew S. Lazarus | Senior Vice President | Tudor Realty Services Corp.

As the Managing Agent for more than 90 residential cooperative and condominium buildings throughout NYC, we spend a lot of time working with our clients on long term capital planning, prioritizing projects, establishing budgets, creating financial plans and developing work scopes, and then implementing the plans.

It’s our experience that shareholders and unit owners do not like surprises when it comes to their buildings, especially ones that may include words like “assessments” or “increases in maintenance costs”.

With an aging building stock here in NYC, we find that long term capital planning is a critically important aspect of managing co-op and condo buildings in NYC.   As we say, when a building pipe breaks, we will need to fix it.

Part of our job is to help our clients understand the current and future needs of the building, usually over a time horizon of the next five to ten years, and then help them prioritize projects and how to plan for the costs involved all in an effort to avoid surprises, large unplanned capital calls, and “emergency projects” where possible.

So how do we help?


The first step for us is to create the managing agent’s version of a useful life study of all building components, such as roof, elevators, boilers, sidewalks, façade condition, etc.    Once we have that information and understand the current condition, then we can create an analysis that prioritizes current and future projects over the next five to ten years and attaches approximate budget figures to each project that we can use for planning purposes.


Once the useful life study is complete, then we turn to the building’s balance sheet, which identifies all assets and liabilities, indicates the building’s current financial position, funds available for working capital and reserve funds.

If you’ve participated in board meetings or annual meetings that we’ve run, you may have heard us say that part of our job is to figure out “how much money the building needs and where we’ll get it from”.   That’s a big part of our job so understanding the building’s current financial position is critical.


After we complete the useful life study and review the current financial condition, then it’s time to put it all together and come up with a plan.

The useful life study will help prioritize financial needs over the next five to ten years and the review of the building’s financial condition will indicate what’s required and/or will be required in order to pay for the projects.

The good news is that there is more than “one way” to approach and handle this type of financial planning and often, it includes a combination of a number of concepts.  For example, planning for future capital costs may include using existing building reserve funds, borrowing additional funds, either through an underlying mortgage or line of credit, or refinancing the building’s current mortgage and/or line of credit.  It may include establishing an assessment, which can be in a number of forms (i.e., fixed term, short / long term and/or on-going) or creating a contribution to reserve line item in the building’s operating budget.

Of course, each building is different and, as such, views on financial planning, how to come up with the required funds, etc. will vary.  Some will prefer to assess.  Others will prefer to borrow the funds when necessary.

We find that there isn’t a “one size fits all” approach here and that’s why we spend a lot of time analyzing this information on a case by case basis, providing this type of information to our clients and then working with our clients to come up with a plan that works for their building.  With this information, we find that our clients can make informed decisions and feel confident in coming up with a plan.

TRS manages more than 90 cooperative and condominium buildings throughout NYC.  We have a lot of experience in dealing with issues like this.  With an aging building stock (many nearing 100 years old), we find that this type of planning is critically important, not just for us as managing agent, but for the boards and all the residents we serve. We find that the “key” here is to have the information available and to discuss it with a long term view in mind so that the board (and all of us) can establish a plan and be proactive about this type of planning as opposed to reactive.

Please do not hesitate to give us a call if you would like to discuss this with us and learn more.  We’d be happy to discuss our experience, view and approach.

As always, thanks for reading!

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