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ConorM (Illinois)
Posts: 15
Posted:
Hi everyone,

I'm trying to get in unit laundry in our building. We currently have a common laundry room, and we get a few bucks from the operation fees.

If we go to in-unit laundry, I can't imagine everyone will switch overnight. Nonetheless, it could mean less income for the building because of this convenience.

Does anyone have any experience with this? Could an individual owner be assessed a monthly convenience fee for having in-unit laundry? Although they would pay for their own electricity to run it, the water comes from the common expense.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Bad idea... Lot's of risks. You have to consider the plumbing of each building/unit. Is it so it can support laundry use? How about handling the venting outdoors? How would that be handled? Would one have to cut a hole in the building or roof to vent? There are fire and flooding risks involved to. One may have to restrict the type of washer/dryer combo one may have. Would they have to be stackable? How would it be enforced if someone broke that rule?

A lot of issues associated with this. Yes it would be convenient but if your not set up to handle it, this is a nightmare. We have seen people post on here dealing with illegal hookups and the damage they have done. Plus the owner's think the HOA is responsible for the repairs if something were to go wrong...

Former HOA President
ConorM (Illinois)
Posts: 15
Posted:
Assuming we have a plan on how to adjust the plumbing and accommodate both ventless and vented dryers...

But back to the issue of the convenience fee. Does that seem like a reasonable thing to do?
SteveM9 (Massachusetts)
Posts: 3,699
Posted:
Quote:
Could an individual owner be assessed a monthly convenience fee for having in-unit laundry?


Doesn't make sense. I don't see why you want to do this. If you have a loss of income from dues, raise the dues or cut expenses.

Quote:
Although they would pay for their own electricity to run it, the water comes from the common expense.


Where was the water coming from before? If I wash clothes in my house or the laundry room, isn't that the same amount of water?
ConorM (Illinois)
Posts: 15
Posted:
Thanks for the reply. As you can imagine, some people who don't have in-unit systems would think they're subsidizing the cost of the in-unit machines.

Our water is a common expense. However, an owner brought a concern to me about usage. We don't meter each unit. Let's say you need to wash some pants. If you wanted to use the common room, washing a single pair of pants might be cost prohibitive. If you have your own machine, you could just throw it in there.
GlenL (Ohio)
Posts: 5,491
Posted:
Conor, first start with the building dept to see if that type of conversion is even allowed, then if it is, you need an engineering study to see if the buildings infrastructure will support it. Oh yeah, don't forget to involve the insurance company, when a washer on the third floor floods the building and the mold starts to grow, if all of the i's aren't dotted and the t's crossed, expect to hear this famous phrase: "Sorry Charlie."

But hey, let's spend thousands of dollars so it's cheaper to wash a single pair of pants, I mean doesn't everyone wash them one at a time or is it a once in a blue moon type occurrence? Oh, the answer to the reduced funds from the people not using the machines is to simply raise the assessments to pay for it. Repeat after me: "For every action there is a reaction, although unlike physics it is not always equal."

Studies show that 5 out of 4 people have problems with fractions
MelissaP1 (Alabama)
Posts: 13,836
Posted:
They do make small washer machines that can hook up to your sink. They even have some portable types if you go camping. However, allowing people to put individual washers and dryers in their units... Not an inexpensive idea and even harder to regulate charges. Expect a HUGE special assessment and damage just from the plumbing upgrades alone. Then the water bill going up for each unit as a special fee for whoever has one would be ignored. No one would admit they had a washer if they had to pay extra for it.

Former HOA President
SharonH9 (Virginia)
Posts: 216
Posted:
Quote:
Posted By ConorM on 06/23/2013 10:03 AM
Hi everyone,

I'm trying to get in unit laundry in our building. We currently have a common laundry room, and we get a few bucks from the operation fees.

If we go to in-unit laundry, I can't imagine everyone will switch overnight. Nonetheless, it could mean less income for the building because of this convenience.

Does anyone have any experience with this? Could an individual owner be assessed a monthly convenience fee for having in-unit laundry? Although they would pay for their own electricity to run it, the water comes from the common expense.

I assume you have looked at all the implications financially and otherwise. Lay it all out to the members. Ask them what they want. Just because an amenity is a little bit of a challenge doesn't mean it shouldn't be considered. Look at swimming pools and the expense they are. Give me a washer and dryer in my own unit any day over a swimming pool. I would gladly pay a few bucks more for the convenience.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
The OP just wants those who have the washer dryer convenience to pay extra. That concept does not work in HOAs. It is funded by all the members for the members. The current cost is more voluntary than required.

Sounds like a coined laundry service which already exists could be improved instead.

Former HOA President
BruceF1 (Connecticut)
Posts: 2,535
Posted:
Quote:
Posted By ConorM on 06/23/2013 10:03 AM
Hi everyone,

I'm trying to get in unit laundry in our building. We currently have a common laundry room, and we get a few bucks from the operation fees.

If we go to in-unit laundry, I can't imagine everyone will switch overnight. Nonetheless, it could mean less income for the building because of this convenience.

Does anyone have any experience with this? Could an individual owner be assessed a monthly convenience fee for having in-unit laundry? Although they would pay for their own electricity to run it, the water comes from the common expense.

Since I'm a professional tax preparer, I can't help but think of the tax ramifications of this. Sorry folks!

First of all Conor, I hope you are reporting the taxable income from the common laundry room. It's not assessments, so it is non-exempt income (after deducting the expenses associated with producing that income). So, if it produces a net profit, which you seem to indicate that it does, then that profit is taxable.

Same deal if you decide to allow an in-unit laundry and charge unit owners who have an in-unit laundry for that. Since it's not an assessment paid by all unit owners, the IRS considers it as a "special use" fee and it is non-exempt income and is taxable.

Sorry. From a tax perspective, there's no difference.

If you charge for only the water use, then income = expense and so there would be no net profit and no tax. But then, there's no extra money either. And, how do you determine water use for just the water for the washer?
SharonH9 (Virginia)
Posts: 216
Posted:
Quote:
Posted By BruceF1 on 06/23/2013 12:58 PM
Posted By ConorM on 06/23/2013 10:03 AM

Since I'm a professional tax preparer, I can't help but think of the tax ramifications of this. Sorry folks!

First of all Conor, I hope you are reporting the taxable income from the common laundry room. It's not assessments, so it is non-exempt income (after deducting the expenses associated with producing that income). So, if it produces a net profit, which you seem to indicate that it does, then that profit is taxable.

Same deal if you decide to allow an in-unit laundry and charge unit owners who have an in-unit laundry for that. Since it's not an assessment paid by all unit owners, the IRS considers it as a "special use" fee and it is non-exempt income and is taxable.

Sorry. From a tax perspective, there's no difference.

If you charge for only the water use, then income = expense and so there would be no net profit and no tax. But then, there's no extra money either. And, how do you determine water use for just the water for the washer?

Bruce,
You bring up an interesting point. Hope you don't mind my question but here goes.

My association charges user fees for sanitary sewer use. Members pay a certain amount and nonmembers pay 3 times that amount. It's not an assessment. It's a user fee and is separate from the annual dues. Does this mean that this a special use fee and is non-exempt and is taxable. The Association had no sewer expenses this year and most years the fees collected far exceed their expenses.

If you don't wish to answer that's okay. I will bring it up to the BOD, that they may want to look into that.
BruceF1 (Connecticut)
Posts: 2,535
Posted:
Quote:
Posted By SharonH9 on 06/23/2013 1:37 PM
Posted By BruceF1 on 06/23/2013 12:58 PM
Posted By ConorM on 06/23/2013 10:03 AM

Since I'm a professional tax preparer, I can't help but think of the tax ramifications of this. Sorry folks!

First of all Conor, I hope you are reporting the taxable income from the common laundry room. It's not assessments, so it is non-exempt income (after deducting the expenses associated with producing that income). So, if it produces a net profit, which you seem to indicate that it does, then that profit is taxable.

Same deal if you decide to allow an in-unit laundry and charge unit owners who have an in-unit laundry for that. Since it's not an assessment paid by all unit owners, the IRS considers it as a "special use" fee and it is non-exempt income and is taxable.

Sorry. From a tax perspective, there's no difference.

If you charge for only the water use, then income = expense and so there would be no net profit and no tax. But then, there's no extra money either. And, how do you determine water use for just the water for the washer?


Bruce,
You bring up an interesting point. Hope you don't mind my question but here goes.

My association charges user fees for sanitary sewer use. Members pay a certain amount and nonmembers pay 3 times that amount. It's not an assessment. It's a user fee and is separate from the annual dues. Does this mean that this a special use fee and is non-exempt and is taxable. The Association had no sewer expenses this year and most years the fees collected far exceed their expenses.

If you don't wish to answer that's okay. I will bring it up to the BOD, that they may want to look into that.

I'm not sure what you mean by "nonmembers." Do you mean renters?

In any event, the IRS considers two types of income for an HOAs that file form 1120-H. Exempt function income, which is usually the assessments that are charged to all unit owners, is exempt from income tax as long as certain conditions are met, which is normal for most associations. The second type of income is non-exempt income, which some often refer to as "outside" income. Examples of non-exempt income would be interest on bank deposits and dividends on investments, fees for admission to or rental of HOA facilities (such as rental of a clubhouse for private use), and "special use" fees that are not normally charged to all unit owners. There are some exceptions, but they are not common. Fees such as you describe would be definitely be taxable non-exempt income, especially because of the fact that the fees are not collected from members (unit owners).

There is a standard $100 deduction that can be taken from the total of non-exempt income. In addition, any costs associated with producing that income may also be deducted. For example, if you charge a rental fee for the use of a clubhouse, you may deduct from that any cost (such as utilities cost) associated with that use during the period of time the clubhouse is rented.
JonD1
Posts: 2,350
Posted:
Quote:
Posted By ConorM on 06/23/2013 10:03 AM
Hi everyone,

I'm trying to get in unit laundry in our building. We currently have a common laundry room, and we get a few bucks from the operation fees.

If we go to in-unit laundry, I can't imagine everyone will switch overnight. Nonetheless, it could mean less income for the building because of this convenience.

Does anyone have any experience with this? Could an individual owner be assessed a monthly convenience fee for having in-unit laundry? Although they would pay for their own electricity to run it, the water comes from the common expense.

Conor:

Without going into much detail I will offer a general opinion.
I would have many concerns about putting this into action.

I would wonder the layout of your building. How many floors and having access to a place where you might exhaust a dryer.

I would wonder what electrical service goes to each unit currently and if that service might handle the addition of a washer/dryer unit?

I would assume you would be using an electric dryer if not then you would require running gas either to the unit or adding a line to service the dryer unit itself. If you used gas than you have to have some point to exhaust.

Electric dryers as a rule running on less then 220 are not that useful.

Then you would have to consider as mentioned insurance.
Would the carrier now cover these units for fire, water, and mold?

The you would need to check to find out if the current plumbing can be expected to handle the new volumne of water added by these new units.
Drains are desgined to handle a certain amount and size fixtures now adding ________ washers. How many units exist in your building? My guess depending on the age and design you might overload the drain system.

So in summary there is a lot to consider before allowing or suggesting this sort of change to the property. IMO not worth the time, effort, cost, or potential issues down the road you just might have.

Good luck.

SharonH9 (Virginia)
Posts: 216
Posted:
Quote:
Posted By BruceF1 on 06/23/2013 2:48 PM
Posted By SharonH9 on 06/23/2013 1:37 PM
Posted By BruceF1 on 06/23/2013 12:58 PM
Posted By ConorM on 06/23/2013 10:03 AM

Since I'm a professional tax preparer, I can't help but think of the tax ramifications of this. Sorry folks!

First of all Conor, I hope you are reporting the taxable income from the common laundry room. It's not assessments, so it is non-exempt income (after deducting the expenses associated with producing that income). So, if it produces a net profit, which you seem to indicate that it does, then that profit is taxable.

Same deal if you decide to allow an in-unit laundry and charge unit owners who have an in-unit laundry for that. Since it's not an assessment paid by all unit owners, the IRS considers it as a "special use" fee and it is non-exempt income and is taxable.

Sorry. From a tax perspective, there's no difference.

If you charge for only the water use, then income = expense and so there would be no net profit and no tax. But then, there's no extra money either. And, how do you determine water use for just the water for the washer?


Bruce,
You bring up an interesting point. Hope you don't mind my question but here goes.

My association charges user fees for sanitary sewer use. Members pay a certain amount and nonmembers pay 3 times that amount. It's not an assessment. It's a user fee and is separate from the annual dues. Does this mean that this a special use fee and is non-exempt and is taxable. The Association had no sewer expenses this year and most years the fees collected far exceed their expenses.

If you don't wish to answer that's okay. I will bring it up to the BOD, that they may want to look into that.

I'm not sure what you mean by "nonmembers." Do you mean renters?

In any event, the IRS considers two types of income for an HOAs that file form 1120-H. Exempt function income, which is usually the assessments that are charged to all unit owners, is exempt from income tax as long as certain conditions are met, which is normal for most associations. The second type of income is non-exempt income, which some often refer to as "outside" income. Examples of non-exempt income would be interest on bank deposits and dividends on investments, fees for admission to or rental of HOA facilities (such as rental of a clubhouse for private use), and "special use" fees that are not normally charged to all unit owners. There are some exceptions, but they are not common. Fees such as you describe would be definitely be taxable non-exempt income, especially because of the fact that the fees are not collected from members (unit owners).

There is a standard $100 deduction that can be taken from the total of non-exempt income. In addition, any costs associated with producing that income may also be deducted. For example, if you charge a rental fee for the use of a clubhouse, you may deduct from that any cost (such as utilities cost) associated with that use during the period of time the clubhouse is rented.

Thank you very much. The bylaws have levels of membership; members, members not in good standing, nonmembers. Gives me something to think about. Thanks again.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Conor

My problem is giving people permission to have washers and dryers in a stacked unit building (like with another unit above). No matter how thoughtful, tough, explicit, etc. you know someone is going to screw it up and create a problem. Especially a water/flooding problem of some type.

Oh, sorry I forgot it was hooked up, etc, etc.

CarolR11 (Colorado)
Posts: 2,563
Posted:
We're two 12 y.o. high rises, Conor, and all units originally had a stackable washer/dryer. Now, some owners have changed to separate appliance. Along with the concerns that others have raised, we have booster fans in each unit to propel the dryer air outside the building as its far away. These fans are supposed to be run 10 minutes before, during, and 10 minutes after using the dryer. If residents fail to do that and, in addition, aren't very diligent about keeping their dryer vent screen free from lint, the duct can and has leaked in the laundry closet and also in living rooms. In a couple of cases, the leaks have gone into the units below. another source of leaks is that there's an additional lint screen behind a panel in each laundry closet ceiling It, too must be cleaned about once a month & requires a step ladder to access it. It, too, an cause leaks. tun, of course,there's the occasional overflow.

Now, you may not need all of that, but I don't know if you've checked yet.

The most serious issue in multi-level condos is water & the damage it can cause. So, yes, you insurance premiums would surely increase

ff the top of my head, I don't think a use fee makes sense. We do have a square foot variance where condos with more sq. ft. pay more per month than condos with less sq. ft. for gas, water, insurance. But it's a really tiny amount.

Some people in any HOA are going to use more or less water than others. Some will repair leaky toilet flappers & some won't, which can use a lot of water!

About 10% of our owners are only here part time so obviously use less water than those who, for example, work at home, never go on vacation and may have one more resident than most other units. Lots of residents don't use our pool, but pay the same as all other residents. Many have their clothes professionally laundered & pressed, etc.

But, to answer your question and having lived in high rises with and without community laundry, sure it's more convenient to have the appliances in my home.

But, with others, I don't think it's worth the expense & risks.
SharonH9 (Virginia)
Posts: 216
Posted:
What about dishwashers, sinks, toilets, bathtubs, showers? They all have the potential for water problems yet every unit has them. Is there any more risk of a washing machine having a problem than the other things I've listed. Same with the dryer. Is there more risk for dryers causing a fire than other appliances in a unit. I personally don't know that is why I am asking the question.

I think the members should be given all the details, the pros, cons, expenses vs benefits then let them decide if it is worth the extra expense and risk.
JonD1
Posts: 2,350
Posted:
Quote:
Posted By SharonH9 on 06/23/2013 7:37 PM
What about dishwashers, sinks, toilets, bathtubs, showers? They all have the potential for water problems yet every unit has them. Is there any more risk of a washing machine having a problem than the other things I've listed. Same with the dryer. Is there more risk for dryers causing a fire than other appliances in a unit. I personally don't know that is why I am asking the question.

I think the members should be given all the details, the pros, cons, expenses vs benefits then let them decide if it is worth the extra expense and risk.

Sharon you should take the time to read some insurance statistics. Washers have a higher rate of failure for leaks due in part to their design and the fact most use rubber hoses for water connections. Dryers cause a large number of fires when vents and filters get clogged and are not maintained or exhausted properly. When the air flow is restricted in builds up a huge amount of heat. If lint is allowed to collect it can be a source for a fire.

If you have a gas dryer you then add gas to the mix along with water and electric.

JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By SharonH9 on 06/23/2013 7:37 PM
What about dishwashers, sinks, toilets, bathtubs, showers? They all have the potential for water problems yet every unit has them. Is there any more risk of a washing machine having a problem than the other things I've listed. Same with the dryer. Is there more risk for dryers causing a fire than other appliances in a unit. I personally don't know that is why I am asking the question.

I think the members should be given all the details, the pros, cons, expenses vs benefits then let them decide if it is worth the extra expense and risk.

Units designed for such is one issue. Units not designed for such is another. I believe the units the OP is talking about, were not designed for such.

Even portable units could cause issues.
SteveM9 (Massachusetts)
Posts: 3,699
Posted:
Quote:
Along with the concerns that others have raised, we have booster fans in each unit to propel the dryer air outside the building as its far away. These fans are supposed to be run 10 minutes before, during, and 10 minutes after using the dryer. If residents fail to do that and, in addition, aren't very diligent about keeping their dryer vent screen free from lint, the duct can and has leaked in the laundry closet and also in living rooms. In a couple of cases, the leaks have gone into the units below. another source of leaks is that there's an additional lint screen behind a panel in each laundry closet ceiling It, too must be cleaned about once a month & requires a step ladder to access it. It, too, an cause leaks. tun, of course,there's the occasional overflow.


The only way to ensure the fan is turned on is to make it automatic. In a multi unit dwelling, you can't trust the homeowner and you can't risk anything.

Dryer Booster Fan Automatic Proving Switch
http://www.amazon.com/Fantech-Booster-Automatic-Proving-Switch/dp/B005D2IKPW

As for lint screen cleaning, I would remind people in monthly newsletter, hallways, etc. And mandatory lint screen cleaning or inspection by the condo association once a year. Some people you just can't trust to do anything.
CarolR11 (Colorado)
Posts: 2,563
Posted:
Your question definitely is reasonable, Sharon. But, actually washers do have a lot of potential for overflowing. The reason is that people sometimes put too many items in them or one that's too big. I just did the latter a couple of weeks ago with a mattress pad that was too big. The washer overflowed, but I was there to take care of it immediately, mop up the water, etc.

The other issue, as Jon points out is that the original rubber hoses, now 12 y.o. can burst.

The major water problems here are clogged drain lines, which have caused sinks to overflow and have caused a significant damage to units below.

In the 6-1/2 years I've been on the Board, we've had several minor leaks from dryer ducts. We've had several minor ones from dying garbage disposals.

As Steve recommends, we regularly put items in the newsletter about running the booster fans and cleaning out the ceiling panel lint trap. We try to make the point, too, in the times, that dryers free of lint will save on their lactic bills too. It's also emphasized in our Welcome Packet that goes to all new Owners & tenants. We also urge residents to never run their washers or dishwashers unless they're home AND awake! WE link it with the caution: GRAVITY RULES!

Steve's right, we cannot at all trust residents to maintain their dryer lint/vent/duct system. We require a mandatory annual $65 inspection paid by owners of the dryer duct system from the appliance, through the ceiling and the area where it's vented outside, usually balcony ceilings.

There's been a lot said about dryer lint fires, but there have been none in our urban condo-loaded setting consisting of hundreds of units.

We would not even consider gas dryers.

Thanks a lot for the booster fan automatic proving switch info, Steve. I need to read more about it. I had no idea that there is such a product!

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