Real Estate Q & A
BY JAY ROMANO
OCTOBER 13, 2011
Getting a Copy of Bylaws and Lease
Q: Can a co-op refuse to provide a copy of the bylaws and proprietary lease to a potential buyer?
A:Lior Aldad, a Manhattan co-op and condominium lawyer, says that a co-op corporation has no obligation to provide these documents to a prospective buyer, but that the seller, as a shareholder, should have the documents and can provide a copy to the purchaser.
Mr. Aldad said that as part of the “due diligence” that a buyer’s lawyer will conduct when reviewing a prospective purchase, he or she will need a copy of the co-op lease and bylaws as well as copies of the house rules, the offering plan and the financial statements. Buyers should make sure that the seller provides all amendments made to the documents over the years. The seller can get the documents from the managing agent.
Stabilized Tenant Wants to Branch Out
Q: I have been a rent-stabilized tenant in a Manhattan building for almost 20 years. My husband and I were thinking about renting another apartment in our building to use for entertaining. Would this jeopardize my rent-stabilized status?
A: Lucas A. Ferrara, a Manhattan real estate lawyer and adjunct professor at New York Law School, says that as long as the rent-stabilized apartment remains the primary residence, she and her husband can rent another apartment in the building without losing regulated status. When a court is asked to make a primary-residence assessment, Mr. Ferrara said, it will usually look at a number of factors, including whether the regulated apartment is being occupied by the tenant for at least 183 days of the year, excluding temporary absences for hospitalization, military service or other acceptable reasons.
Consideration will also be given to the testimony of the landlord, the tenant, and other building residents and employees; and to the address recorded on public records and personal documents like tax returns and utility bills.
Buying a Sponsor Unit In a Prewar Co-op
Q: What should a buyer be aware of when purchasing a sponsor unit in a prewar co-op?
A: Stuart M. Saft, a Manhattan lawyer who is the chairman of the Council of New York Cooperatives and Condominiums, says the primary benefit of buying from a sponsor is that board approval is not typically required for the sale. And one advantage to buying in a prewar building is that, with a long operating history, it is unlikely to generate big and costly surprises.
Mr. Saft said, however, that if many rent-regulated tenants still lived in the building, there could be friction between the purchasers, who will have a financial investment in the building, and the rental tenants, who despite their smaller financial interest may still have an emotional and historical relationship with it.
On a practical level, he said, a prewar building will probably have thicker walls, which would minimize issues like the migration of sound from one apartment to another. But it is also likely to have an older heating system, no central air-conditioning and fewer amenities than a newer building.