How your board can avoid the hidden costs of putting off NYC co-op or condo building repairs
- Deferred maintenance can raise energy, operating, and repair costs by tens of thousands of dollars
- Daily walkthroughs, audits, and capital plans are proactive steps to stay on top of necessary upgrades
When maintenance is deferred, minor issues can compound and quietly raise operating costs long before an obvious failure occurs. Major heating and cooling equipment all requires routine maintenance.
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If your New York City co-op or condo board is stuck in a cycle of tackling one emergency after another, it can be difficult to be proactive about repairs. But even though facade work, window replacements, and energy efficiency measures are expensive, deferred maintenance almost always ends up costing more.
“There's a cost for not being prepared,” said Amalia Cuadra, senior director of engineering at EN-POWER GROUP, an energy engineering and consulting firm. “If you are told you have to replace your boiler but you put it off and it goes out in January, that’s a different type of capital project—that becomes an emergency.”
Delayed capital repairs can be the result of project complexity, funding issues, or a board being overwhelmed. There are also hidden costs to putting off repairs including higher utility and operating costs, penalties for carbon emissions, insurance issues, and financing difficulties.
Here are some of the costs co-ops and condos can avoid by being proactive about repairs.
Higher utility and operating costs
When maintenance is deferred, minor issues can compound and quietly raise operating costs long before an obvious failure occurs. Major heating and cooling equipment all requires routine maintenance.
“Without regular maintenance, equipment performance gradually deteriorates, leading to increased energy consumption, higher operating costs, and reduced equipment life,” said Matthew Strobel, vice president of high-performance buildings at energy consultant Bright Power.
Minor mechanical issues such as sensor failures or clogged filters can make systems run longer, short-cycle, or operate inefficiently.
“When minor issues are not tackled proactively, they not only accelerate wear and tear on equipment but can also increase utility consumption,” Strobel said.
As the mechanical elements of a building age, there’s inevitably a cost associated with their on-going repairs. Take the building-wide riser repairs completed several years ago at 333 East 69th St. The 116-unit co-op was built in the early 1960s and the original condensate piping was deteriorating. “Every season we’d have leaks and floors that needed to be replaced and there is a cost to that,” said board president David Fortunoff.
The project to replace the pipes was expensive and intrusive; walls needed to be opened up and later closed and huge lengths of new piping needed to be installed at a cost of around $3 million. However, by getting the work done ahead of a catastrophic leak the building avoided costs for water damage and was able to remove leak repairs from their operating budget.
Local Law 97 penalties
Higher energy consumption, particularly gas and oil, can affect carbon emission compliance under Local Law 97.
“New York City buildings have to take into account LL97 penalties into their operating costs and that’s a changing landscape,” Cuadra said. “In five years you can go from having a $6,000 [penalty] to an $87,000 penalty per year,” she added.
When performing energy audits, Punit Shah, vice president of building decarbonization at Bright Power, routinely uncovers issues that have quietly inflated energy use for years. The biggest culprits are missing insulation on steam piping; boiler controls set up incorrectly; boilers that fail combustion testing; ventilation fans not operating, and steam traps needing replacement.
“When buildings address these issues promptly, the efficiency of the systems improves,” Shah said. “We’ve seen properties cut fuel and electric consumption enough to materially reduce their projected Local Law 97 carbon penalties as a result,” he said.
For Strobel, having a maintenance plan that includes daily walkthroughs and annual tune-ups can help.
“The most effective step properties can take is to create a preventive maintenance plan that prioritizes repairs by risk and cost impact,” he said.
Cuadra advocates for a capital plan that gives a co-op or condo board a clear direction to help avoid these rising costs.
“A good capital plan should be able to clearly outline what the the cost of action and the cost of inaction are so they can make decisions,” she said.
Expensive emergency repairs
Replacing building components proactively can avoid emergency repairs. When a boiler fails in mid-winter, repairs become urgent. “There is nothing you can do about the fact that you just had to spend $40,000 repairing equipment that you are going to have to replace next summer,” Cuadra said.
Unplanned or emergency repairs are often more expensive because a board does not control the timing. “They won’t be able to shop around and compare bids,” Cuadra said. Instead, a board is limited to the first or only contractor available to make repairs. And those repairs do not rule out eventual replacement of the failing equipment.
Financing problems and insurance issues
Another consequence of deferred maintenance can include violations for failed systems. This has a cost associated with it but can also lead to financing problems. Stricter Freddie Mac and Fannie Mae lending guidelines have led to more scrutiny of building maintenance and reserve funds. A building with deferred maintenance or a lack of reserves can become ineligible for conventional loans. These rules will become even more stringent in January 2027, when condo boards will need to increase their capital reserves from a minimum of 10 percent to a minimum of 15 percent of the building’s annual budget in order to remain compliant.
A related issue can involve building insurance problems. Deferred maintenance signals a higher risk to insurance carriers. This can lead to higher premiums, larger deductibles, coverage restrictions, and in some cases denials at renewal time.
