Now that the 2009 ship has sailed, there are numerous new development condominium projects that were bought in 2007 and 2008 that are now starting to close. Many people are anxious to move into their new homes and (hopefully) meet their new neighbors.
Did you know that it is legally permissible for the sponsor to retain board control in a new development even if only 1 unit remains unsold, as long as it was fully disclosed both in the bylaws and in the special risks section of the offering plan? The rules change for a conversion that requires a sponsor to give up control of the board after five years or upon the sale of at least 50 percent of the units, whichever occurs first. This is according to New York Real Estate attorney Mark Axinn.
However, should the sponsor give up control of the board of managers, the sponsor cannot designate or nominate the majority of the managers. In this case, the sponsor is not prevented from voting with its percentage of common interest for unit owners who have similar views, as long as the unit owners are not on the sponsor’s payroll or otherwise given money by the sponsor.