Creating a Five-Year Capital Plan for Your NYC Coop or Condo
The Real Costs of Deferred Maintenance (Yes, It Adds Up Fast)
You wouldn't skip your annual physical, right?
Your building needs the same kind of care. The truth is, most costly repairs we see were totally preventable. What started as a minor leak turned into a $50,000 ceiling collapse. An overdue boiler part replacement led to a mid-winter emergency shutdown. And the kicker? Every one of those situations could have been avoided with a solid five-year capital plan.
Let’s walk you through how to create one that actually works—saving your board time, money, and stress.
Why You Need a Five-Year Capital Plan
If you’re on the board of an NYC co-op or condo, you already know how tough it can be to balance everyday operations with long-term planning. But putting off major repairs and upgrades doesn’t make them disappear—it just makes them more expensive.
You’re probably told by your auditors that you don’t want a capital plan, since once you have one, you’ll need to disclose it in your audited financials and assess accordingly. However, for internal planning purposes, you might want to have a non-formal capital plan.
A proper capital plan helps your building:
Stay ahead of required Local Law compliance
Avoid “surprise” emergency repairs
Budget strategically (instead of reactively)
Keep residents confident and property values strong
Think of it as your building’s roadmap. Without one, you’re flying blind—and that never ends well.
The Real Cost of Deferred Maintenance
Let’s say your roof is nearing the end of its useful life, and the board decides to hold off another year. Next spring, that same roof causes internal damage to 4 units. Now you're paying for emergency roof repair plus drywall, paint, mold remediation, and maybe even a lawsuit from an angry shareholder.
We’ve seen cases where ignoring a $40K preventive fix led to $400K in damages down the road.
Here’s what deferred maintenance often leads to:
Emergency labor costs (which can be 2–3x higher)
Overtime charges
Insurance denials due to negligence
Legal claims for property damage or unsafe conditions
Unhappy residents—and worse, bad board optics
Bottom line: ignoring it now only makes it harder (and more expensive) later.
What Belongs in a Capital Plan?
Your five-year capital plan should include:
Major systems: HVAC, elevators, roofing, plumbing, and electrical
Façade work required under Local Law 11/ FISP
LL97 and LL88 upgrades—with estimated timelines and costs
Gas line inspections and repairs (LL152)
Cosmetic projects like lobby or hallway renovations
Reserve contributions and planned assessments
Don’t forget to plug in all known Local Law deadlines. Those carry fines if missed, and you’ll want those projects properly phased and funded.
One Line Item That Can Actually Drop Your Insurance: Replace Unsafe Electrical Panels
If your building still has Federal Pacific Electric (FPE) panels—especially the infamous Stab-Lok brand—this should be near the top of your capital plan.
Why? Because insurers hate them. They’re known to fail under overload, meaning they don’t trip the way a breaker is supposed to. That creates serious fire hazards.
Buildings with FPE panels are often:
Denied coverage altogether
Hit with higher premiums or deductibles
Required to replace the panels before renewal
If your insurance broker hasn’t flagged this yet, it’s worth asking. Replacing these outdated panels not only makes your building safer—it often improves your insurance profile and can lower your cost over time.
Partner With Your Insurance Broker—Seriously
Here’s one benefit most boards overlook: working closely with your insurance broker as you develop your capital plan.
Why? Because underwriters love to see proactive boards taking action to reduce risk.
Things like:
Replacing aging electrical panels
Installing leak detection sensors
Installing shutoff valves that are more accessible (as opposed to in Mrs. Smith’s kitchen on the 9th floor, hidden behind her kitchen cabinets)
Upgrading boilers before they fail
Maintaining sidewalks properly
Planning fire safety upgrades or door closers
These are all risk-reducers—and that matters. When your broker can show the insurance carrier that your building is minimizing claims potential, you’re more likely to get favorable terms, better premiums, and fewer exclusions.
We’ve even seen cases where documenting capital improvements led to premium reductions mid-policy.
So, bring your broker into the conversation early. Show them your plan. Use their feedback to identify where upgrades could translate to insurance savings.
How to Build It: Step-by-Step
When you engage a new property management firm, the first thing they should do is a thorough walkthrough to inventory all your systems. Sure, many are listed on the DOB website, but a physical show-and-tell is the best way to see the real condition and connect with your Resident Manager or Super.
Here’s how to create a five-year capital plan that actually works:
Step 1: Assess the Building’s Condition
Get a professional building condition report. This creates a baseline of what’s working, what’s aging, and what’s urgent.
Step 2: Make a Full Inventory of Systems
Elevators, boilers, chillers, roofs, garage membranes—you name it. List every major component with install year, expected lifespan, and replacement cost.
Step 3: Layer in Legal Deadlines
Mark dates for façade inspections, LL97 compliance, gas piping inspections, and anything else you’re on the hook for.
Step 4: Prioritize Projects
Use a traffic-light system:
🔴 Urgent and safety-related
🟡 Mid-term repairs/upgrades
🟢 Long-term, discretionary improvements
Step 5: Assign Costs and Timing
Even rough numbers help. This sets expectations and avoids sticker shock.
Step 6: Revisit Annually
This isn’t a one-and-done doc. Update it every year based on what’s completed, new laws, and current conditions.
How to Get Your Board and Residents On Board
Not everyone loves talking capital projects—especially when they come with assessments. Here’s how to make it easier:
Use clear, simple language—avoid engineer-speak
Show the cost of inaction alongside the cost of doing the work
Include benefits like energy savings, comfort, and resale value
Use visuals or timelines to show when projects are expected
Be transparent—residents appreciate being kept in the loop
Common Mistakes to Avoid
Waiting for something to break
Skipping legal deadlines (and paying avoidable fines)
Under-budgeting (it always costs more later)
Treating the plan as a static PDF instead of a working tool
Forgetting to explore rebates, grants, or low-interest financing
Missing the insurance angle—don’t leave savings on the table
Let’s Get You Ahead of the Curve
If your building doesn’t have a current five-year plan—or hasn’t reviewed it recently—it’s time. Let’s talk about your capital plan and help your board move from reactive to ready.