New York's Cooperative and Condominium Community



Co-op and condominium boards have many reasons to lay out a five-year capital-improvement plan. Among other things, it helps you budget, it helps eliminate or lessen assessments, and it makes lenders look more favorably upon your building and its residents' apartments when it comes to refinancing. And for condo associations, Fannie Mae — a.k.a. the Federal National Mortgage Association — requires you have a capital plan or put aside 10 percent of the monthly common charges.

When a first-floor shareholder's floor collapsed into the basement, the board at Chelsea Gardens, a six-story, block-long, 170-unit co-op at 255 West 23rd Street, decided to excavate the filled-in space to raise some much-needed funds. With all of the dirt removed, the basement walls measured 13 feet high — tall enough to meet the legal requirements for occupation — and the co-op would have an additional 5,000 square feet it could either sell to shareholders on the first floor to create duplexes or offer to buyers as new units.

It's a story as old as co-ops and condominiums: Someone gets on the board, and someone else accuses him or her of using the board position for personal gain. And in the case of a condo in Alphabet City, as the area of letter-name streets in Manhattan's East Village is known, a lawsuit involving a roof deck installed without permission seems as simple as ABC. Or is it?

If you prepare for the worst, you're better off in the long run. Except when you're not. A few years ago, the American Institute of Certified Public Accountants (AICPA) suggested that every co-op and condo's financial statement contain information about the remaining useful life of — and the replacement cost for — all the building's infrastructure. Makes sense, right? Not to some attorneys and accountants.

Recent news affecting co-op and condo buyers, sellers, boards and residents. The aftermath of superstorm Sandy lingers, Concourse Village workers may strike and a co-op / condo board-member group meets with mayoral candidate Joe Lhota. Plus, lot o' news for boards this week, as one court ruling partly limits the Business Judgment Rule and another says a particular type of Airbnb rental isn't illegal hoteling. And experts answer a board member's own plea: "What Can I Do About the Tyrants on My Co-op Board?"

At 51 Fifth Avenue, the co-op board came into possession last year of a 2,000-square-foot two-bedroom apartment overlooking a church. The board enlisted a broker who told them to put the apartment on the market for $1.5 million as is. That's when the property manager stepped in and put a stop to it.

Last year, a rent-controlled tenant approached the co-op board of her building with a welcome proposition: If the board would buy her out, she would leave, and they could sell the apartment for a handsome sum. "She got a big pile of money, and we will get an enormous pile of money," says Carl Tait, president of the board at 152 West 58th Street, near Central Park. When all is said and done, this 33-unit co-op will clear $600,000 in tax-free cash. The building is currently under contract with a buyer for $950,000 for the two-bedroom apartment.

Recent news affecting co-op / condo buyers, sellers, boards and residents. This week there's a lot of news for boards in particular, with a growing wave of scammers falsely claiming disability in order to have dogs in a no-pet building, with the latest on publicly naming residents in arrears, with the expansion of no-smoking buildings, and with converting a club space to an apartment for resale. Plus: families buying multiple apartments together, broker-free sales and Judge Judy (above) buys in Sutton Place.

Harold Jacob is the longtime property manger of the Hillman Houses and East River Housing, two of the four communities comprising the Lower East Side's Cooperative Village — colloquially called Co-op Village or "the Grand Street co-ops." He decided in 2009 that the time had come for Co-op Village to wean itself off the highly polluting No. 6 heating oil, ushering in a new era of energy efficiency, dramatically reducing pollution and lowering the energy consumption of the 2,500 apartments in the seven buildings he manages. Hillman and East River now each use a dual-fuel system that relies mainly on natural gas and can periodically switch to the cleaner No. 2 oil.

Many buildings end up in possession of a vacant unit when a rental occupant moves out. With rent-controlled or rent-stabilized apartments, this often happens only when the tenant dies. However, if conditions are right, the building could negotiate with a willing occupant to leave under sunnier conditions, leaving a cooperative or a condominium association with an apartment it can then sell. But those negotiations can be tricky. Rental regulations provide strong protections to a rent-controlled or rent-stabilized tenant, who will often want a sizable severance price, especially if the apartment is in a desirable neighborhood.

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