New York's Cooperative and Condominium Community

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A READER ASKS: I am a recent addition to a nine-member board in a small Brooklyn co-op. We're starting to discuss a few capital improvement projects, including replacing our elevator, revamping our laundry room, and determining whether it's time to expand the storage area. The elevator is priority, because it breaks down a lot and has become a major safety concern. But we're torn on the other two projects. Neither is priority but we don't have the funds to do both. I suggested we survey the building residents, but a fellow board member thinks that may open up a can of worms. I don't want to be pushy because I'm new — and I've never served on a board before — but are surveys a thing that boards should just avoid altogether?

Do the Rules for Short-Term Rentals Change If a Permanent Occupant Stays on Premises?

Written by Richard Siegler and Dale Degenshein on April 13, 2015

New York City

Short-term rentals, particularly in condos and co-ops, are hotly debated in the press, the courts, and legislative tribunals in urban centers throughout the country. In City of New York v. Abe Carrey, the New York City Department of Buildings (DOB) issued several violations to a condominium unit-owner, arguing that he was in violation of law because his tenant allowed a tourist to rent a room in the apartment on a short-term basis.  

Abe Carrey owned a condominium apartment at 184 East 2nd Street. He rented the apartment to Nigel Warren and Julia Kodysh. Warren used Airbnb (which actually intervened in the proceeding) to find a guest to stay in the apartment while he was out of town. The certificate of occupancy showed the apartment as a "Class A Multiple Dwelling," that is, one that is zoned for permanent, rather than transient, occupancy. Further, the condominium declaration states that units may only be used as private residences and not be rented for transient, hotel, or motel purposes.

You know when you're on the subway and the train stops in the tunnel and ten minutes later steam starts coming out of your ears because it looks like you will all be languishing there indefinitely? Sometimes it's the lack of information that ticks us off. Sure, the conductor "communicates" with the straphangers, saying there are delays (no duh) or that there's train traffic ahead (yeah, okay), but maybe we'd be a little more patient and sympathetic if we had actual facts. That's not always possible on the subway, especially if someone's been hurt and police are on the scene investigating. But the concept applies in all walks of life. People lose their patience faster when they feel like they are being kept in the dark — including those in co-ops and condos. That's what seems to be happening at one co-op in Chelsea.

Unsold shares. Those two little words make up a lucrative niche in the city's real estate market that can be a vexing headache for co-ops. That's because unsold shares sometimes prevent co-ops from becoming what they're supposed to be: corporations composed of shareholders who live in a building and work toward its long-term fiscal and physical well-being. Healthy co-ops, in other words, are built on owner occupancy. Unsold shares in co-ops are, as a rule, rent-controlled or rent-stabilized apartments, usually occupied by long-term renters. Owners and renters tend to be oil and water. And that's the problem.

Back in the day, people who couldn't afford to live in pricey Manhattan would take the next best thing. The goal was a nice apartment in a nice neighborhood in one of the outer boroughs with a commute that wasn't too tedious. The payoff was that rents were significantly cheaper in the outer boroughs — even in Brooklyn. But times have changed, and as Brickunderground astutely notes, the price difference between Brooklyn and Manhattan is shrinking. First quarter 2015 sales reports generated by real estate firms like Douglas Elliman confirm that "Brooklyn has set a new record for median sales price, coming in at $610,894 — that's a 17.5 percent increase over the same time last year." It's not news for people who have been priced out of Brooklyn. Brooklynites have been scrambling out of their home borough in search of better prices for a few years now. Some of those folks have ended up in Queens. The good news is that, according to Douglas Eliman's report, the median sales price there is still nearly $200,000 less than it is in Brooklyn. The sobering news is that it's increased by 20.7 percent compared to last year. So it looks like for co-op and condo buyers the time to consider Queens is now, and don't forget that all eyes are also now on The Bronx

Photo credit: Postdlf for English language Wikipedia, licensed under CC BY-SA 3.0 via Wikimedia Commons.

A cursory look around the city is all that's necessary to notice just how much construction is happening everywhere. It feels like there's scaffolding on every other block, as old buildings get reduced to rubble so new buildings can rise up. Commuters racing past almost get used to it, tuning out the noise. But it's not so easy for anyone who lives in a building that abuts another that's about to be demolished.

We're not just talking about the inconvenience of the noise, the dust, the shaking, and everything else that is par for the course in a massive construction project. Older buildings, especially, with potentially weaker walls are especially vulnerable to damage from adjacent construction work. It's true that the responsibility for protecting surrounding properties rests with the developer or owner of the new project. However, your board can still take precautionary steps to protect the building should anything go wrong.

It may be called 426 West Broadway House Condominium, but it actually isn't a house at all. It's a six-story, 36-unit loft building that runs the length of an entire block from West Broadway to Thompson Street. Built in 1900 as a commercial space, it was gut-renovated and transformed into large condominium apartments in the early eighties.

It's been transformed again — this time out of necessity. And what a bumpy journey it has been.

After a series of serious leaks, the seven-member board — including a fairly typical mixture of SoHo types, from investment bankers and artists to a real estate developer and a writer — decided to replace the roof. This seemingly simple task became more complex than it had first appeared. "It's a very large roof — 18,000 square feet," observes Ellen Kornfeld, Vice President at the Lovett Group, who has managed the property since 1989. She says that the board had to deal with a number of issues.

It was 81 sponsor units — bought and financed — that ended up causing the near-downfall of a co-op in Queens. A series of missteps and significant risks taken by the co-op's live-in building manager, Robert Valdes-Clausell, got the building in hot water and then some: it fell behind on bills, defaulted on a sizable loan, and spiraled into foreclosure. In an effort to put the breaks on the foreclosure, Clausell and the board took an action that sealed the co-op's fate: they filed for Chapter 11 bankruptcy. 

A READER ASKS: I recently moved into a midsize co-op in Brooklyn. I've noticed that one of my neighbors keeps leaving her baby carriage and shopping cart in the basement. I had to leave my bike in the basement for a few hours on a Saturday, in the same spot where she typically leaves her things. I figured it would be okay, since I don't make it a habit. But I got an e-mail from the board letting me know that I was not to use common areas in the building, basement included, as storage space. I know it seems petty of me to point out that the only reason I thought it would be okay to leave my bike there is because my neighbor constantly uses it for her things, but I'm very annoyed. It's a fairly big basement and it's kind of astounding that we don't have storage space as it is. Should I say something? Should I complain about my neighbor? Or should I keep it more positive and request they create official storage space? 

The owner of a sponsor unit in a non-eviction co-op in The Bronx wants to move in now that the original tenant, who was protected under rent-stabilization laws, has died. But there's a complication. The original tenant's son moved into the apartment about 18 months before she died, and has now claimed succession rights. Can the sponsor unit owner evict him under the owner occupancy law? That's one of the questions Ronda Kaysen fields in this week's "Ask Real Estate" column in The New York Times. "Noneviction co-ops were designed to protect rental tenants from eviction if they did not buy their apartments when the building converted to a co-op. If the son successfully claimed succession rights, he is entitled to all the rights the lease provides — including the right to not be evicted, even if the owner wants to occupy the unit," explains Kaysen. That means the original tenant's son can stay, as long as he follows the terms of the lease and rent stabilization law. But it also may come down to timing. To claim legitimate succession rights, the son would have had to have moved in two years "before the time the rent-stabilized tenant vacated the apartment." In this case, the son is a few months short, unless his mother was disabled or elderly — in which case he would only have to have lived in the apartment for one year.

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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

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