New York's Cooperative and Condominium Community

Habitat Magazine Insider Guide



ILSA, the federal Interstate Land Sales Full Disclosure Act, was designed to prevent deceptive real estate practices by requiring developers to disclose information needed by potential buyers. But now a bill passed by both houses of Congress and awaiting the president's signature takes that protection away from condominium purchasers. Introduced by Sen. Charles Schumer (D-NY), Sen. Kirsten Gillibrand (D-NY) and Sen. Dean Heller (R-NV), the bill, S. 2101, came after much lobbying by the Real Estate Board of New York, reports Developers had complained buyers were rescinding deals and demanding money back over minor paperwork errors. Buyers have long complained that developers would sell apartments in under-construction buildings and then not deliver the goods — stringing them along for month after month. Supporters of the bill say having ILSA apply to condominiums created uncertainty for developers and that New York State has other anti-fraud protections.

Some condo and co-op boards consult their attorneys as a matter of last resort, and sometimes not even then. Whether relying on hubris, bad advice or a cost-controlling mentality, these boards may end up making decisions without considering all the legal ramifications and potential downsides. The end result could be drastically spending money on legal fees to sort out a mess that could have been avoided.

For self-managed buildings, attorneys take on an even more important role. Not only do they handle all the traditional legal responsibilities, but they can also serve as a financial advisor, consultant and makeshift managing agent.

Single-family houses can get reverse mortgages. Two- to four-family houses can get reverse mortgages. Even condominium apartments can get reverse mortgages — but not co-op apartments. Why? According to a report by The New York Times, it's because most reverse mortgages are insured by the Federal Housing Administration (FHA), part of the Department of Housing and Urban Development (HUD) — and HUD has chosen not to let co-op owners tap into their home equity. As a spokesperson told the Times, “FHA’s single-family programs are based on loans being secured by real property and the co-op structure does not meet this basic requirement.” That's true: In co-ops, owners own shares in the building corporation, which obviously means the apartment can just get up and walk away! Why, co-ops are so undependable and dangerous, banks won't even lend you money to buy them, except that they do. After all, you know those undependable prewar / midcentury buildings in New York City — why you just can't count on their market value ... to do anything except go up. HUD? More like DUD.

The November 2013 fire was devastating. It broke out just after 7 p.m. on the third floor of the Kew Gardens co-op and quickly spread to the fourth, fifth, and sixth floors, and to an area below the roof. By the time the four-alarm fire was declared under control at 9:15 p.m., the Queens Courier reported, eight of the 168 responding firefighters had been injured, and the building, a 135-unit co-op between Kew Gardens Road and Metropolitan Avenue in Queens, was a wreck.


Board president Rabindra Singh was shocked by the damage. "We had a fire here about four years prior to that, but this one was about two or three times larger," Singh says. "No one ever expects to deal with a disaster of this magnitude. Everyone had to play a role in the project, from me and the other six members of the board to the architect, the property manager, and even the shareholders."

Admission interviews by co-op boards strike fear in even the most confident apartment-buyer's heart. Stories abound of New York City boards rejecting people for some imagined imperfection, or for being Madonna or Richard Nixon. Many co-op buyers tell of having to bring their dogs to the interview, so that the board can feel assured that Rover's not an aggressive, 75-pound hell-hound. So what about children, be they toddler tantrum-throwers, teenaged skateboard thugs or, like your kid, of course, well-behaved and above average? Must parents bring children kids to the co-op board interview? Brokers tell all in's latest "Ask the Experts" column.

New Yorkers are continually assaulted by sound — traffic, construction, the neighbor's music, you name it. And noise is an especially sensitive issue within cooperatives and condominiums, where complaints about noisy neighbors can create disputes among residents. Unfortunately, noise is a highly subjective issue, and conflicts can become extremely difficult to resolve. The legal system may be the only remedy to the situation, but this should be a last resort.

A READER ASKS: Our co-op desperately needs to replace our windows — some of them won't stay open; others won't closing properly. The building is 100 years old and still has the original windows. We know that it's going to be a difficult process, but what can we expect? 

HABITAT ANSWERS: Many buildings are facing similar problems, as old windows reach the end of their useful lives. Since repair, replacement and everything that goes with that — type, material, color, cost, dealing with contractors and shareholders — are the responsibility of the board, it might be time for you to do a little window shopping. 

So who's responsible for eradicating mice in your co-op apartment when your cat's too lazy to do the job? That depends, say legal experts in's latest "Ask an Expert" column. In most cases, the little rodents are emanating from one of the common areas, usually the garbage or compactor room. And co-ops, since they operate under a proprietary lease, are subject to such rental statutes as those involving the warrant of habitability, meaning the board has to keep the building up to a certain legal standard of livability. On the other hand, if you're a hoarder or just a really, really, really messy person, getting rid of your mice might not be the board's responsibility. 

Regardless of what type of emergency for which you're preparing, the hallmarks of your plan should be communication, organization and clarity. If everyone knows what his or her role is in an emergency — including the property manager, board members, shareholders, and building staff — then executing that plan becomes much simpler.

HELOC may sound like a successor to Marvel Comics' espionage agency SHIELD — and Headquarters for Eurasian, Latin-American and Oceanic Control does sound pretty cool — but it stands for, rather, "home equity line of credit." In the case of co-ops, says a National Cooperative Bank loan officer writing in, this differs from a traditional mortgage refinance in that, first, co-op loans aren't mortgages, and, second, you can borrow small amounts, effectively treating your apartment "like a credit card." It's also unlike a traditional refinancing, he says, in that it only costs only a few hundred bucks to set up. While some co-op boards naysay HELOCs, most, he asserts, will OK them up to a certain percentage of your apartment’s appraised value.

Ask the Experts

learn more

Learn all the basics of NYC co-op and condo management, with straight talk from heavy hitters in the field of co-op or condo apartments

Professionals in some of the key fields of co-op and condo board governance and building management answer common questions in their areas of expertise

Source Guide

see the guide

Looking for a vendor?