I
don't understand why my friend Gary Olman insists that replacing the Clubhouse air-conditioner
is obviously a capital improvement (and thus a WPRF expense) and not a
"repair" (which apparently according to our Triple-Net Lease, UCO
must fund). He's very tough on Dave Israel on this issue, who Gary claims has effectively
sold us down the river.
I'm
not an attorney and I am not an expert on our Triple-Net Lease, but to me a
capital improvement is when you add something new or intrinsically significantly better. If
the Clubhouse DIDN'T HAVE air-conditioning and we added air-conditioning, that
would be a capital improvement. If your condo's roof needed replacement after
18 years, and you replaced it with essentially the same kind of roof, that
would not be a capital improvement.
Hi Lanny,
ReplyDeleteThis matter was submitted to the UCO Attorney, Rod Tennyson.
In short, his opinion is that the replacement of the Cooling Towers (NB we are not replacing the entire HVAC), is not a Capital Improvement.
It is a "Refurbishment, Replacement, Repair" per the Millennium Agreement.
One of our Residents is threatening to sue...quelle surprise.
We in UCO, must act on professional legal and technical advice; this is the basis of our decision.
This item, the cooling towers, was debated and passed by the UCO Operations Committee.
Dave Israel
Just about what I expected. It makes sense. Thanks, Dave. "Quelle surprise' about the threat of a suit is right, although I'd have thought the chances of such less by a factor of one.
ReplyDeleteGood point Lanny, the silly suit happy duo is now a single.
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