The Value of a Gym or a Playroom
I am a shareholder in a prewar co-op with a large basement space that is owned by the sponsor and kept locked. The sponsor is in private negotiations to sell it to one shareholder. Some of us think the co-op should try to buy the space for common use like a playroom or gym. What value does this kind of amenity add over all to a co-op building? Is it advisable for the co-op to negotiate buying this space from the sponsor?
Upper West Side, Manhattan
You are not the first New Yorker to wish for amenities in your building. Many of us would relish the chance to hop on a treadmill or unleash the kids in a playroom without stepping outside on a wintry day. Why else would new condominiums come packed with perks for everyone down to the family dog? In fact, many older buildings have been feverishly revamping common areas so they can compete with new condos.
Your co-op board should review its offering plan to make sure it does not already own the space. It might have been deeded to the corporation back when the corporation was created. If the deed does not exclude the basement, the corporation might have rights to it, which would mean the sponsor does not have the right to sell it.
“The first step is for the board to make sure that the sponsor actually owns, and therefore has the right to sell, the basement space,” said Leni Morrison Cummins, a Manhattan lawyer who represents co-op and condo boards.
But if the deed explicitly excludes the basement space and the offering plan spells out that the sponsor owns it, the board could try to buy it. The corporation’s governing documents must give the board the authority to buy commercial space. Look to the co-op bylaws, which frequently restrict how much money a board can borrow or spend. The bylaws might also require a vote, which frequently means that two-thirds of the shareholders would have to support the idea for the measure to pass.
Once the board determines whether it can buy the space, it needs to figure out how much the space is worth. “Talk to an expert in valuation and get an appraisal,” said Paul Purcell, a managing director at William Raveis New York City. Once the finer details are worked out, the board should brace for another pressing decision: treadmill or elliptical? Or both?
After a Domestic Partner Dies
Until his recent death, my uncle lived in a rent-controlled apartment for more than 40 years. His life partner had lived with him there for most of those years, but the lease was only in my uncle’s name. My uncle’s life partner would like to stay put, but I am not sure whether he has any right to stay in the apartment under the same rent-controlled status.
Upper West Side, Manhattan
Your uncle’s partner should be able to remain in the apartment, since he was living there for more than two years before your uncle passed away, assuming he can support his claim. In New York State, both rent-stabilized and rent-controlled apartments provide tenants with succession rights for family members.
Since the couple were not married, the surviving partner would have to prove emotional and financial commitment and interdependence with your uncle, if the landlord challenged his claim. He could provide joint bank statements; photographs of the couple through the years; shared assets; wills and health care proxies.
If his evidence is indisputable, he could write a letter to the landlord demanding that his name be added to the lease. He could file a petition with Homes and Community Renewal, the state agency that oversees these apartments, to compel the landlord to give him a lease renewal.
“The couple may have filed at City Hall for a domestic partnership,” said Dov Treiman, a Manhattan lawyer specializing in landlord-tenant law. “If they did that, it’s game over for the landlord.”
If his evidence is weaker — if, for instance, the couple had some separate bank accounts — Mr. Treiman said he could wait until the lease expires to see if the landlord offers him a new one before raising the issue.
Fee for Buying an Apartment
I own a unit in a condominium building. Recently, the condo board instituted a policy requiring buyers to make a $1,500 capital contribution to the condominium when they buy a unit. The bylaws do not give the board authority to require a capital contribution in this situation. In my view, it is essentially a flip tax. While $1,500 may seem small in the context of a real estate transaction, I believe it sets a bad precedent. Future boards may raise the amount. If I sell my unit, can the new buyers simply refuse to pay the capital contribution charge? Is there any other way I can challenge this?
A condo board cannot collect a capital contribution unless the bylaws give it explicit permission to do so. If your bylaws do not permit such actions, then the board has certainly overstepped its boundaries.
The action “is tantamount to an amendment of the bylaws, which can be done only by a vote of the unit owners,” said Richard Siegler, a Manhattan real estate lawyer who represents condo and co-op boards. New York State law requires two-thirds of the unit owners to vote in favor of the measure for it to pass. Unfortunately, the board could probably enforce the rule without a vote. If a buyer refuses to pay the $1,500 fee, for example, the board might not waive its right of first refusal, which would block the sale. In that scenario, would a seller realistically take the board to court over $1,500?
“You’re not going to start a lawsuit over this,” Mr. Siegler said. Your best bet is to reason with the board that it should follow the bylaws of the condo, noting that failing to do so would create a bad precedent for the building. But in the grand scheme of New York City real estate transactions, $1,500 is not a huge sum. Think of the upside: It provides the condo with a revenue stream that does not burden existing residents with higher common charges.
“Flip tax is not a bad word,” said Douglas L. Heddings, a real estate broker for CORE. “In my 22 years in the Manhattan real estate industry, there is rarely a buyer who is dissuaded from a purchase due to a flip tax.”