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Sanity check my co-op inspection.
May 30, 2014 8:02 AM   Subscribe

I just had an engineer inspect the co-op we put an offer in for, contingent on a satisfactory inspection. I don't know anything at all about repairs (so we'd contract out for anything big) so help me figure out if any of the stuff below is possibly a huge dealbreaker.

The apartment is just very slightly under our budget. The building seems to be actively maintained (there's an assessment going on until 2018) However, this is what the engineer found:

-The basement boiler is about 30 years old, which means it's roughly at the end of its life. Anyone have an idea of what an assessment on a new boiler in a co-op looks like?
-The windows are quite old and need to be replaced sooner than later (~$5K for good windows, according to him)
-There's some minor re-tiling to be done in the bathroom around the bathtub to prevent potential water damage.
-The brick/concrete terrace (which is the co-op's responsibility) needs to be fixed up from water damage. I'll need to talk to my lawyer first, but I suspect my ongoing offer is going to be contingent on that repair being made before closing.
-A number of older 2-prong outlets should be replaced with 3-prong

On top of that I've already known that we'd have to:
-Have the carpeting pulled up
-Have the hardwood floor under the carpeting buffed/repaired/finished.
-Replace the refrigerator and dishwasher (and possibly built-in microwave)
-Replace the inner terrace door with a glass one (for light.)

Other than that, the building itself is apparently well taken-care of and there's an assessment going on for the next few years for repairs that are clearly getting done. I like the apartment, I like the neighborhood, the price is right, but are we about to get in over our heads? I was hoping to keep any repairs we have to do under $10K, but is that realistic considering everything?
posted by griphus to Home & Garden (25 answers total)
How many units are in the building? Are you responsible for the windows, or is the co-op?
posted by 1970s Antihero at 8:09 AM on May 30

~150 units. Co-op owner is responsible for the windows.
posted by griphus at 8:13 AM on May 30

The boiler in my (80-unit) co-op died a few years ago. I can look up the costs, but I don't remember it being much compared to other repairs that have been done, such as replacing all the windows (which my co-op paid for), or getting the elevators replaced. The boiler replacement also came with significant energy cost savings, as we switched from oil to gas.
posted by 1970s Antihero at 8:18 AM on May 30

How big is the unit? We had the floors refinished in our condo (~1200 sf) and it cost around $3500. Floor refinishing + new appliances + new door + windows is definitely going to run you more than $10k, I think.

For the boiler, the assessment is going to be based on your percentage of ownership. So if the boiler costs 50k to replace and your percentage of ownership is less than 1%, your share of the assessment will be less than 5k. Ask the board how they handle large assessments for major repairs like this. They may spread them out over time. We live in a condo but that's how ours handles it - we are just starting an assessment for $1m in capital repairs for the building, but they spread it out over 7 months so each unit owner is paying a few hundred extra a month for 7 months.
posted by bedhead at 8:19 AM on May 30

Replacing two prong with three will require running new wire from the breaker box or fuse box. If your apartment has its own, this is relatively inexpensive estimate $200.00 per outlet. If it has to come in from elsewhere, like the basement it will cost significantly more.
posted by Gungho at 8:19 AM on May 30

Keep in mind my boiler replacement cost number was pulled directly out of thin air. I don't know how much they actually cost to replace.
posted by bedhead at 8:19 AM on May 30

How big is the unit?

1100 sq. ft.
posted by griphus at 8:24 AM on May 30

What it really comes down to is how much you guys love the place and its location.

Do the windows actually leak? If not you could hold off on replacing them for a while.

Do the floors under the carpeting look ok? If so you can probably put off refinishing them.

Do the appliances work? Put off replacing them if they do.

What do you mean by boiler? Is it a boiler just for your unit?
posted by mareli at 8:28 AM on May 30

The boiler is a basement boiler for the building. If I wasn't clear, the way replacement would work is that the co-op board would replace the boiler outright, and then charge an assessment of a certain dollar amount per co-op share for a certain period of time. So as the unit owner/shareholder, the way it affects me is that I have to pay that monthly assessment.

According to the engineer, it's just the tank that would need to be replaced. The mechanism (or whatever) is brand-new and set up for dual oil/gas.
posted by griphus at 8:38 AM on May 30

The thing about 2 prong outlets is that they don't have a ground-wire. So if an electrician has to do them, then local codes may require GFCI in place of ground if replaced by a pro. Now, I've done this, it's pretty easy to do actually, and DIRT CHEAP (less than $2 per outlet) for the parts. Bonus, you can put in pretty Decora outlets, instead of traditional ones. Other bonus, nice and clean! Buy the contractor packs. You'll need a polarity tester for safety.

As for appliances, big box stores are cheap, so's the Sears Outlet (although my sister has a horrible experience with them) or even a high end place, but ask for the scratch and dent stuff. That scratch in the fridge will probably be covered by a cabinet. Score!

The boiler isn't getting replaced today, but at some point in the future. Just know that and budget for it.

You might be able to swing a deal for window AND door replacement. Hard to say. The terrace thing is a big ??. That's because all the terraces in the building may need to be replaced, or it could be a one off.

See if you can use the inspection to get the seller to come down on price based on the inspection. Say, $5,000. You don't get what you don't ask for.
posted by Ruthless Bunny at 8:55 AM on May 30 [1 favorite]

A thought, how many amps is the electrical service? It's about $2,000 to upgrade that if you need more power. FOR SURE, with your electronics, use good quality surge protectors.
posted by Ruthless Bunny at 8:56 AM on May 30

From your list I am not clear how much of this is going to be an imminent cost and how much is stuff that could be done over time. Absent further details however my list would go as follows:

Based on your description the only imminent repair requirement would be repairing the tiles.

It generally makes sense to replace floors before you move in so that would be next on my list.

If you can afford to, windows as well. Replacing windows is unpleasant and newer windows tend to be more energy efficient and keep you warmer (if that's a concern where you are). But as long they close they can stay for the time being.

Replacing internal doors or functioning appliances that are safe to use is purely cosmetic and can be delayed.

So if you really like this place and see yourself living there a good few years these things, even though they'd add up to more than you repair cap, need not cause you to pull out. On the other hand, if you plan to be there only 2-3 years I'd be looking elsewhere.
posted by koahiatamadl at 8:58 AM on May 30 [1 favorite]

How many windows does the unit have? That 5K estimate seems a little low for a unit with 1100 square feet. Of course, it's going to depend entirely on the quality of the replacement windows you go for, but based on replacing just my first floor windows about four years back, that 5K estimate seems a bit low, and it's already half your 10K budget.
posted by instead of three wishes at 8:59 AM on May 30

220V, 60A, 7 circuit
posted by griphus at 8:59 AM on May 30

I will say that all of these things fall under the sort of thing I'd expect in a well-cared-for but old building, so in that regard they're not deal-breakers (in the way that, say, big structural or safety concerns would be) but only you can judge whether they're too much financially. Any time you own a house, you end up trickling in repairs, whether planned, desired, or emergency. I would guess that part of this is why the apartment was on the cheaper side.

For my part, I'd upgrade the wiring for safety and modern lifestyle, and then I'd spread the other things out -- get new windows in a couple of years, say, and let the boiler's lifespan be unknown (could die tomorrow, could soldier on for another few decades). Then you're amortizing the costs over your residency, rather than taking them all up front, and you can also see which things most affect your happiness with the place before taking action.

Good luck! I know all decisions around big purchases like this can be nerve-wracking, so just do the best you can.
posted by acm at 9:01 AM on May 30 [2 favorites]

None of those things seem to be overwhelming to me. In almost any new place you would replace/change/improve things. The $5,000 for retrofitted windows seemed high (unless the board is specifying a specific, expensive window?). I think you should go for it.
posted by saucysault at 9:09 AM on May 30

The question you need to ask the co-op board and/or managing agent is how big the reserve fund is. A well managed co-op has a healthy reserve fund to cover things like new boilers and windows. It's fine that they have an assessment going, but a co-op that continually has to levy assessments on the owners instead of having a healthy reserve fund has some management issues in my opinion.

What's the assessment for? How long is it in place for? How many assessments has this building had in the past 5-10 years?

Generally in co-op the owners are responsible for repairs and upgrades within their own unit and the building is responsible for major, building-wide repairs like new boilers, new carpet in the halls, new washer dryers in the basement, etc...

If the co-op board has a plan for dealing with big maintenance issues and is keeping a good reserve fund, then go for it.

All this from a co-op owner and former co-op board member.

Also ask them about their rental/sublet policies. Buildings with too many renters as opposed to owner-occupants can have problems with financing.
posted by brookeb at 9:15 AM on May 30 [4 favorites]

The deck is the only thing that looks like a dealbreaker for me - that needs to be fixed before closing. Outlets and windows are on you - those are things that often go with getting a bargain on a place. Boiler cost will be split among the units, unless it's accounted for in a reserve fund. Larger units generally have more shares and pay a higher percentage of the costs. The re-tiling you could ask the seller to do as part of the offer, but it's an inexpensive fix and not worth losing a place you love over.
posted by Mchelly at 9:22 AM on May 30

griphus: "220V, 60A, 7 circuit"

Is this in New York or London? I ask because both are common for co-ops but the electrical is very different. If it's New York, it's 120V (a 220V circuit is made by combining two "hot" legs). The rest of this assumes New York:

Is the wiring knob-and-tube or modern romex? If it's knob-and-tube, your property insurance expense will be higher because K-T wiring is much more susceptible to fires, especially if the paper insulation has been damaged. Having two-prong-only outlets leads me to believe that it's definitely older wiring that's sans ground; I'd be asking exactly where the ground on the three-prong ones goes. I haven't done electrical in NYC before, but a floating, disconnected ground like could serve some outlets but not others is against code everywhere I've been.

Assuming your unit has its own service drop from a dedicated meter, I'd price in a full rewire, while also asking whatever contractor you have do it about going to 100A or 150A service and adding in data/video cabling. Redoing the wiring is almost certainly going to involve opening up some holes in the wall. While he or she is in there, you might as well get a good home network out of the deal since running low-voltage wire like Ethernet is relatively cheap and doesn't add much time to the hourly billing. Oh, and get a main breaker, especially if you have fuses. It's handy to be able to pull one switch and cut off all electricity.

I mention more amps because 60A service is going to be a limiting factor if you lead an electronics-heavy lifestyle. At 7 circuits, that's less than 10A per circuit, so if you have two high-resolution monitors attached to a decently powerful desktop computer, you could pop a circuit breaker if you accidentally have them connected to the same circuit as your toaster oven. (Also, a 10A circuit can't run a very nice Breville oven.) Increasing the amperage servicing your unit should be easy from a modern meter. You might even get lucky and the service run from the meter to your panel is already upgraded, you just need a larger main breaker.
posted by fireoyster at 10:38 AM on May 30 [1 favorite]

Have you pulled a lot of the carpet and not just all the corners? We got a nasty $7K surprise when we pulled the rug in our house.

When I lived in condo community we did a replacement of all the boilers for the community. The special assessment was one month's fees. That community never did an SA that exceeded your normal monthly fee and you always had 3 months warning and the option to pay in installments. At worst, a special assessment could increase your fees by a third for three months. They could do that because the HOA actively managed their finances to maintain a cash reserve. An emergency repair was paid out of the reserve, then the SA replenished the reserve. The questions I would ask here are: "Are there limits on the frequency or dollar amount of special assessments?" and "How quickly are assessments due for payment?" I'll be honest, I got INCREDIBLY lucky to have such a reasonable HOA because I had no idea to ask those questions.
posted by 26.2 at 10:43 AM on May 30

The one comment i'd make here is that replacing windows is often a false improvement. Do some research, it makes the LEAST difference in heating/cooling costs as long as they close properly and don't leak tons of air. If the place isn't well insulated, it's pointless. And if the place is, it's nearly pointless.

It's very embedded in the consumer consciousness that old windows = bad to the point that most inspectors/contractors/etc include that under the assumption that you don't want them, but if you get someone to talk straight to you on the actual benefits they'll probably repeat basically what i just said. I've heard from several smart contractors that it's the last improvement they'd make, and you can find this same opinion online fairly readily backed up with data.

My bosses house, which was just refitted to be super energy efficient and is something like 130-140 years old still has several original picture windows and a few other windows because of this. They look pretty cool, and it just isn't that big of an improvement to bother with replacing a large oddly shaped window.

The rest of this sounds like normal stuff to me, but keep in mind that the window thing is more of a personal preference and sound insulation thing(which it will make a huge difference on, if that's an issue at your place). Not so much an energy thing nor something that has to be down zomgnow to bring the place "Up to date".
posted by emptythought at 11:11 AM on May 30

The thing about 2 prong outlets is that they don't have a ground-wire. So if an electrician has to do them, then local codes may require GFCI in place of ground if replaced by a pro. Now, I've done this, it's pretty easy to do actually, and DIRT CHEAP (less than $2 per outlet) f.... You'll need a polarity tester for safety.

Maybe. If the wiring is shielded and grounded and IF the box is metal and grounded... and IF the wiring is not aluminium, and so many ifs that you need an electrician's evaluation. Also doing this yourself may be against the co-op's rules.
posted by Gungho at 2:03 PM on May 30

Engineer got back to me: it is BX cable and a metal box.
posted by griphus at 2:55 PM on May 30

(To clarify: he tested all the 3-prong outlets, and they're all properly grounded. )
posted by griphus at 3:17 PM on May 30 [1 favorite]

I like the apartment, I like the neighborhood, the price is right, but are we about to get in over our heads?

You seem to be going in to this eyes wide open. I've been struck by the competence of your engineer's report and its level of detail.

I was hoping to keep any repairs we have to do under $10K, but is that realistic considering everything?

Some of your costs - appliances come to mind - seem to be discretionary. But some are necessary and some are dictated by good practice (the comment about doing floors before moving in is spot on btw). They do seem to add up to over 10k, I think.
posted by werkzeuger at 5:26 AM on May 31

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