There's a hole in the bucket, Dear Liza, a hole....

 

In a little over a year, my co-op has gone from a place where I'd be glad to own an apartment to one where I wish I could sell the place and be done with it.  Being on the board of directors, I am not able to talk about any of the details why I feel this way.  But I can say that I (and other shareholders) have received letters from one outraged shareholder complaining about how things have been managed.

Why is this an issue?

Being on the board puts me at financial risk if we were held liable for the problems the co-op is facing.  Right now, I think we'd win our case if ever brought to court.  But I'm very concerned about my financial future, given that I'd have an extremely hard time recovering (if possible) from any judgements.  Luckily, our lawyer is on the case, and we are taking proactive steps to resolve our issues.

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Our problem is one that I can see us finding a way to resolve.  But there are many other condos and co-ops in this country which have problems worse than ours.  For example, the collapse of an apartment tower in Florida caused the state to enact legislation to deal with Home Owner Associations (HOAs) who have kicked the can down the road, deferring essential maintenance that would keep their buildings safe for residency.  Due to this law, many condos in Florida are effectively worthless, given the rise of HOA fees and assessments needed to bring their properties up to snuff.  (My co-op has continually maintained our property, and was in excellent shape until the beginning of 2024.)

Right now, I am very concerned that things will keep getting worse all over.  Last night (as I write this), one of the ladies in our zoom meeting mentioned that her firm just laid off a significant number of employees.  Given her skill set, she feels safe.  But in her shoes, I'd still keep my resume updated and my fingers tightly crossed.

We're starting to see the effects of the Orange Snowflake's trade war.  He's pissed off our friends, only to get an occasional "win" he can brag about in his propaganda.  Canada has sworn off US goods, and largely avoided the US for its "Snowbird" vacations.  I'm not sure that there's anything that can be done to win back Canadian business until the Snowflake is long gone from office - and that will take years, at best.

So what does this all mean?

I feel that on a macro level, America is heading towards a depression.  Both our short-term and long-term policies have been geared to dealing with today's issues instead of heading off those that will happen tomorrow.  In Florida, inadequate regulation has destroyed the value of a large sector of its real estate market.  In the US, ballooning federal debt will destroy the value of the US Dollar as well as our economy.  Hopefully, we will be able to ride out the troubles I expect to see and come out relatively whole 4 years from now.

 

Retaining Walls and Building Repairs

 

How would you like to live in a building where its retaining wall has failed?  Well, this is the type of issue co-op boards should feel are their highest priorities.  And my board considers issues like this our highest priority, 

Yet, things get in the way of boards doing their right thing by their shareholders.  For example, the Surfside Condominium's collapse could have been prevented had its Homeowners Association (HOA) both maintained the building properly and repaired it as soon as signs of possible failure were detected.  However, many buildings constructed during a building boom are often shoddily built.  In the case of this building, it was doomed to collapse from the day it was built.

Could Surfside have been saved?  Maybe.  It would have taken a strong HOA and willing owners to supply the funds needed for the needed repairs. But this was not the case.  People balk when presented with a high repair bill.  If they can avoid it, smart people sell out early, leaving other "fools" to pay the bills for repairs - but they can't always sell out.  Currently, as a result of the Surfside collapse, many buildings in Florida are going through mandatory inspections and expensive defect remediation.

So I go back to the failed retaining wall in the picture.  If you were thinking of buying an apartment in the building adjacent to the wall, would you do so?  I wouldn't. Instead, I'd wait until the wall has been repaired, and be sure that all assessments for repairs have been made and collected.  Luckily, this is not my building and not my retaining wall....

Another Board Meeting - a short post

 

Sometimes, I feel that the Marx Brothers made more sense than what I have to deal with in my co-op's board meetings.  But then, I often feel this way after a co-op board meeting.  I wish I would write about what transpired at the meeting in this forum - but I can't.  What I can say is that we worked well together, and we are all on harmonic wavelengths with business and the challenges in front of us.

Why am I talking about a meeting when I can't talk about what happened inside of it?  Well, the answer is simple.  Not all condo or co-op boards have overcome the challenges our board has tackled.  Some have it much easier than we do, as they have shareholders who take an active interest in running the co-op.  Others have major challenges in front of them, such as the HOA's for the Florida shore front condos that need major structural repairs due to years of moist ocean air putting properties at risk of structural failure.  My co-op is somewhere in-between, and we have accomplished a lot in the time since I joined the board.

As I see it, the biggest risk to co-op boards and HOA's is apathy.  The second biggest risk is bad (or corrupt) management, either by the board or a management company.  One thing I know is that I intend to be on the board of whatever future residence I live in.