Choosing Between a Co-op and a Condo

Most people looking to buy an apartment in New York City know the basic trade-offs between a co-op and a condominium: the approval process and building rules are usually stricter with a coop, but co-ops make up a much bigger percentage of the city’s housing stock, and they tend to be
less expensive than condos.  But once you dig into these differences, the comparison gets more complex.

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Co-op and Condo Property Tax Guide

N.Y. State Law mandates that New York City value all Class 2 properties as income producing, based on their income and expenses. This means that when you see the Market Value that NYC assigns to your property, it may not look like what you would expect its sales price to be.

To get to your Market Value, NYC uses a statistical model as a tool to find typical income and expenses for properties similar to yours (in terms of size, location, number of units and age). Next, a formula is applied to the income data to get to your Market Value.  All rental buildings, cooperatives and condominiums are valued as if they are income producing properties. There are variations in how  your Market Value is determined depending on whether you live in a larger condo or co-op with 11 units or more, or a smaller building with 10 units or fewer.

The rules, regulations and the system can all be very confusing, but NYC has published a guide that explains and may clarify the issues.  The guide is available here.

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Fair Admissions Policy

Most cooperative corporations require a prospective purchaser to submit an application and various supporting documents containing personal and confidential information concerning an applicant’s history and finances. The Board of Directors may also require one or more personal interviews with the prospective purchaser. The handling of this application and interview process may be subject to scrutiny and claims of unlawful discrimination.  The Council of New York Cooperatives has published an easy reference guide to help Boards of Directors stay within the law. Click here for a “Co-op Board Admissions Guide”.

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Code of Ethics for Board Members

So, you are considering running for the Board of Directors.  OK, so you have tons of time and are a glutton for punishment — you have met the two most important criteria.  Now, let’s consider your real responsibilities and obligations to the Board, to the Corporation and to the shareholders.

Just how will you be expected (by your neighbors and by law) to conduct yourself if you are elected?

And, for those of you who have just been crowned “President” of your Board, you might want to start on day one, minute one by reviewing this hugely important document:

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Before You Buy

For many, the choice to buy a cooperative apartment or a condominium is often perfect in terms of availability, location and finances.  It is one of the most important decisions that families and individuals will ever make in their lifetimes, and should not therefore be made without thoroughly investigating the property that is being considered.

The office of the Attorney General of New York has published an excellent brochure that may serve to assist prospective purchasers. The brochure is available for download here:

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Problems With Your Board of Directors?

As our Attorney General, Eric Schneiderman reminds us, members of co-op boards are usually other shareholders who are serving without pay. They generally want to resolve problems and keep peace in the building.  But, sometimes that is not the case.  New York State has published a Q & A brochure that may provide some helpful information for dealing with a Board of Directors that you believe may have gone astray.

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