MONTHLY CASH FLOW COMPARISON OFCOMPARABLE IN-TOWN CONDO UNITS
The grid below compares relative costs at in-town condo units roughly comparable in size and
amenities to an 1800 sf, 3BR, 2 1/2 bath Townhouse Unit at Putnam Park (PP Unit). The condo unit expenses set
forth in the grid are derived from posted Greenwich Multiple Listing Service information. 1
Column E of the grid attributes an average estimated monthly heating cost to condo units in addition to the
common charges reported by the condo to the Greenwich MLS, since typical common charges do not include cost
of heating the units (which cost is included in the Putnam Park maintenance charge) .
A
B
C
D
E
F
G
C/C for #6 at
25 Ind Harb
2br/2bath
Taxes per
Month
Monthly
CC
Assessment** means not
shown on MLS
Estimated
Average
Monthly
Heat2
Monthly
Cash Outlay
Percentage
Compared to
PP Outlay
Area: 1360 sf
$352
$286
$195
C/C for # 12,
25 Ind Harb
3br/2bath
Area: 1912 sf
$387
$340
$195
$922
C/C for # A52,
20 Church
2br/2bath
Area: 1318 sf
$375
$696
$195
$1,658.50
C/C for # 1,
50 Church
2br/2bath
Area: 1440 sf
$465
$500
$195
$1,160
C/C for # A14,
20 Church
3br/2bath
Area: 1578 sf
$390
$834
$392.50 **
$394.50 **
$833
$195
59.7%
66.10%
118%
83.16%
130%
$1,816.50
1
Copies of these listings are maintained by PP’s Managing Agent.
Average monthly unit heat ($175) and hot water ($20) costs for fiscal 2010 and 2011 is attributed to the listed
condo units based on the value of heating service included in the PP maintenance allocated to a 938 share
Townhouse unit at PP of 1800 sf. Actual condo heat costs paid directly to the utility for a similarly sized Greenwich
condo [source confidential] support these figures.
2
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A
B
C
D
E
F
G
C/C for # A33,
20 Church
2br/2bath
Taxes per
Month
Monthly CC
Assessment-**
means not
shown on MLS
Average
Monthly Heat
Monthly Cash
Outlay
Percentage
Compared to
PP Outlay
Area; 1248 sf
$333
$715
$313
$195
$1,556
111%
Unit for # 37,
25 West Elm
2br/2 bath
Area: 1373 sf
$508
$829
$0
$!95
$1,532
109%
Unit # A3, 20
Church
2br/2 bath
Area: 1323 sf
$345
$724
$336**
$195
$1,600
114%
$368
$745
$341**
$195
$1,649
118%
Unit # B11, 20
Church
2br/2 bath
Area: 1362 sf
Based on the foregoing analysis, 6 of the 9 condo units compared to the PP Unit have higher total carry charges , in most
cases materially higher. But this factor favoring the PP Unit would almost certainly not be apparent to a buyer from the MLS
listings for these units, for two reasons:
First: 4 of the 5 MLS condo listings at 20 Church failed to disclose the monthly assessment at this condo, so that the
cash carry for each of these 4 condo units was understated, by from $336 to $394 per month. The view in the Greenwich
brokerage community seems to be that such omissions from MLS condo listings is a common occurence: and
Second: MLS listings do not address the issue of whether utility costs such as heating are included in condo common
charges (they are included in PP maintenance charges) rather than being paid directly by the owner to the utility, as they are at
most condos.
As a consequence, a prospective buyer viewing the 20 Church MLS listings would not be put on notice that, in addition to his
monthly common charges, he would have to pay monthly average heat costs ( $195) plus a monthly assessment varying from
$335 to $395 (See Grid columns D and E above).
Some will say that these omissions will surface eventually in the course of the buyer’s home search; and that the buyer will
come to the realization that PP’s carrying costs generally appear materially better than those of the competition. That may be
true in some cases; but in other cases, buyer will act in reliance on his initial impression derived from misleading MLS listings
and mark PP off his list of prospects. So some steps should be taken to diminish the prospect of this scenario’s unfolding to our
disadvantage. And, as an initial step, attached as Appendix A is a proposed Notice to Brokers who represent PP sellers which is
intended to highlight these concerns.
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APPENDIX A
Putnam Park Broker Guidelines
March, 2012
The Board of Directors recommends that each shareholder of Putnam Park Apartments deliver to the real estate broker who
lists his unit for sale a copy of these Broker Guidelines.
Statement of Purpose. The purpose of these guidelines is to emphasize to all listing brokers that maintenance and special tax
district charges at PP are not directly comparable to the sum of common charges and real estate taxes for comparable condos.
Comparative Cost Analysis. PP maintenance charges include heat and hot water, whereas many condo common charges do
not and must be paid directly by the condo owner to the utility. In addition, MLS condo listings frequently not disclose
assessments in addition to common charges. Accordingly, merely comparing the coop maintenance with the condo common
charges and real estate taxes may not result in an accurate evaluation of the comparative carry costs.
Example. If a prospective buyer were to compare costs at 2 units of relatively equal size, amenities and location, an 1800 sf PP
Townhouse and Unit A!4 at 20 Church (p. 1 on the attached Grid Chart), he would see the following. PP Unit pays monthly
maintenance of $1,238 plus tax district taxes of $157 per month, a total of $1,395 monthly3, while A 14 pays monthly
common charges of only $834 and real estate taxes at a monthly rate of $390, for a total monthly carry of $1,224. If a buyer
investigates no further, A 14 is clearly the better deal since the sum of maintenance and special district taxes for the PP Unit
exceed the A 14 common charges plus taxes by more than 12%. So buyer may well cross the PP Unit off his list at this point.
But Buyer is probably unaware at this stage of his search that PP Unit maintenance includes heat ($175 monthly) and hot water
($20 monthly)4, while the A 14 owner has to pay the utility directly for those services. Buyer is undoubtedly further unaware
that that the MLS listing for A14 does not disclose that the unit is also subject to a monthly assessment of $394.50, because the
MLS listing does not disclose the assessment ( apparently a common occurrence, as evidenced by the fact that 4 of the 9 MLS
listings in Column D on the Grid Chart to which this Appendix A is attached failed to disclose such assessments).
Conclusion: The excess in carry costs for the PP unit over those for condo unit A 14 (which the MLS listings seems to reveal) is
illusory. If one adds to the aggregate monthly tax ($390) and common charges ($834) for A 14 (1) the additional $195 monthly
costs the A 14 owner must pay utilities to obtain heat and hot water (included in the PP maintenance) and (2) the $394.50
monthly assessment which was not included in the A 14 MLS listing , the aggregate effective monthly carrying cost of A 14
rises from $1,224 to $1,813.50, with the result that the true, aggregate A 14 carry charges exceed the PP maintenance and
special district taxes($1,395) by 30%. We stress that this is not a hypothetical case, The MLS listings for 4 of 5 units from this
condo failed to disclose such assessment.
None of these comparative numbers are bullet proof because some have to be extrapolated from financial statements of PP,
some MLS listings do disclose existing assessments in addition to normal common charges, etc, etc. The purpose of these
guidelines is to get the seller’s broker to point out up front to buyer that the typical rough analysis in evaluating coops as
against competing condos can be materially misleading. There is a big difference between the way a prospective purchaser may
view a purchase at PP whose carry costs initially appear to be 12% greater than a comparable condo (as in the above example),
when additional disclosure reveals that the condo carry costs are in fact 30% greater than the carry costs of the PP Unit. The
danger from PP’s perspective is that, at the point when the potential buyer first shows an interest in the PP unit, he dismisses a
purchase out of hand in reliance on the incomplete financial disclosure in the MLS listings; and goes on to other listings
unaware that the PP unit carry costs were actually 30% cheaper than those of the competing condo.
3
Actual figures
Based on averaged costs derived from 2010 and 2011 PP financial statements, allocated as between heating for
units and for hot water.
4
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