Top 5 Coop & Condo Laundry List Items
Photocredit: Deutsch Photography
In apartment buildings, including coops and condos, the leasing income that we see most frequently is for leasing out the laundry room. A majority of the services in a multifamily building are owned by the housing corporation, but the laundry room is typically handled by a third-party laundry company that renews every few years. We bring in alternative laundry service providers to increase the lease income to the coop while providing a better service experience. Here are the top 5 tips for coop and condo boards to keep in mind when reviewing your coop or condo’s laundry lease:
LEASE LENGTH are typically 7-8 years, which means that your decision will impact the building’s residents for many years. The length of the contract is so that the laundry service company can recoup the cost of the renovation and machines. That’s correct: as part of the lease, the laundry service company will renovate the room and install the machines at no cost to the building!
LEASE INCOME is typically based on the number of wash and dry loads. Your existing laundry service company can provide you with the historical use, which will be helpful when negotiating the lease income either with the same company or a different laundry service provider. If historical use is unavailable, the laundry service company will estimate their lease based on factors including number of apartments.
REVIEW the laundry lease so that you are prepared to switch laundry service provider ahead of its renewal. If your coop board waits until the effective lease expires, it is too late to get a better service or better lease terms. Depending on how much renovation is needed to make the laundry room nice, bright, energy efficient, and adhere to safety codes, we bring alternative laundry service providers in for a walk-through 3 – 6 months before renewal. If renovations are needed, we provide construction contract administration services to facilitate the upgrade.
CERTIFICATE of OCCUPANCY (CoO) is very important and one of the main reasons that many laundry rooms have been shut down by the Department of Buildings (DoB) in the last few years. Many buildings have a general CoO for their entire basement, which was the norm for buildings built over 50 years ago. However, for the last few decades, New York City building regulations require laundry rooms to be specified as such on the CoO. You would expect to find CoOs on the DoBNOW website, but that’s a hit or miss, so we typically go to StreetEasy, scroll down to Building Facts, and search Documents and Permits.
GAS INSPECTIONS is another reason many laundry rooms have been shuttered. The recent Local Law 152 requires buildings to perform a periodic gas inspection that may end up costing buildings a load or two. To find out more about LL152, visit our friends over at KeepMyGas.
CONGRATULATIONS to one of our clients who just signed a lease for $24,000/ year. In comparison, the best offer from their property manager was $20,000/year. In addition, our vendor’s lease agreement includes a $7,500 one-time payment upon installation of the machines. Even though $4,000 might not sound like a lot of money, this is an extra $39,500 over the 8-year term that this coop board does not need to raise from their shareholders.
For other best practices for co-op and condo boards, get our FREE Policies and Procedures Checklist emailed straight to your inbox. At The Folson Group, our goal is to inspire you to run your building like a business. We enable and inspire co-op or condo board engagements to be filled with a feeling of accomplishment, excitement, meaning, happiness, and increased probability of success.
Email us at info@thefolsongroup.com or call us at (917) 648-8154 to see how we can help your co-op or condo board today.