Though they tend to be more expensive, condominium apartments have become far more attractive than co-ops over the past decade. Co-op buyers face the onerous process of board approval and, if they make it through, must acquiesce to any number of building-specific rules: no subletting (even to your own kids), no financing, no pets, no flip-flops in lobby, no baby strollers using the front door. The lists go on and on.
But co-op boards, jittery about declining prices and growing competition from shiny new condos, have been reassessing their once-ironclad bylaws. “These are very savvy people on these co-op boards, and they’re looking around as lesser product than theirs sells for more,” Daniella Schlisser, a broker with Brown Harris Stevens, tells Mansion Global. “They understand there’s something about the ease of purchase [in condos] that’s attractive to buyers, and that they don’t have to miss out on those sales.”
One such bylaw Schlisser has advised co-op boards to abandon is a summer work rule that limits all major renovations to the three months from Memorial Day to Labor Day. “It’s a rule from another era,” she says. “Things don’t need to be that different.”
Co-op boards are learning that a single change, such as allowing pets or permitting purchases under a trust or limited liability company, can immensely broaden the appeal of a building. This potential has not been lost on some financial service professionals, who, sensing an undervalued asset, have tried to break co-op boards of old habits and steer them in a more profitable direction.“I’ve had this conversation a multitude of times,” says Warner Lewis, a broker with Halstead. “[People] see that a building is trading for less than it should be because of x, y or z – because it’s right off Central Park but doesn’t allow dogs.”
Co-op boards didn’t start adapting to reality last week. Past boards at River House, a prestigious Beaux-Arts co-op perched over the East River, rejected purchase applications by Gloria Vanderbilt and Richard Nixon, among other boldface names. The current board, on the other hand, took steps to streamline the application process from as much as six months to 30 days. River House also did away with a burdensome rule that forbade sellers from mentioning the building’s name and address in a listing. “They came around,” says Carol Staab, a broker with Douglas Elliman, “and you’re going to see more boards coming around.”
Thinking of buying a co-op or condo? Already bought, and not sure how co-op/condo life and rules work? Learn all about purchasing a place and living in your new community. It's not like renting, and its not like owning a house. What's it like?