New York Insider Tips – February 2016
The co-op flip tax, a sales-driven payment into a co-op’s reserve fund, has had a positive impact on NYC’s real estate market. An NYU research report measured comparable buildings with a flip tax to those without and noted a 1.9% premium in overall apartment value for buildings with one, likely on account of a building’s stronger financials.
Every offering plan for a new condominium includes an opening section called “Special Risks”. It discloses aspects of the offering that may change and alter the value of your property (i.e. that advertised 421-a tax abatements may not be approved).
Property owners in historic districts need to get nearly every exterior alteration formally approved by the Landmarks Preservation Committee. These include minute details such as door and window sash paint colors, lighting sconce design, railing & banister finishes, and the location of an HVAC compressor.
Co-op owners looking to add to their internal space are required to obtain a share reallocation from the board. Accordingly, when building off of roof rights, adding a solarium on a terrace or privatizing an elevator landing, an owner’s share count, and corresponding monthly maintenance, increases.
Sublet policies differ from co-op to co-op, and focus on how soon one can sublet after purchase and for how long in total. These policies can range from liberal to restrictive. While condos don’t police that aspect, many have a limit as to the percentage of a building that can be sublet at a time so that owners don’t have problems getting financing from banks.