Most coops are requiring that the shareholder have insurance...if your apartment does cause damage to another unit- you most likely would be responsible. Insurance for a coop is determined by the size of the unit, floor, age and amount of insurance(usually amount financed). If you call Allstate- I deal a lot with Ralph Palmiotto 718-352-8080 they will give you more accurate info ( cost approx. $200-$300 a year) Terry K 718-614-3167 cell or TKorahais@elliman.com... more
Surprised the agents don't know, therefore if you are not working with an agent of your own consider the idea; you can contact management directly and ask, you can ask the seller, you can review all co-op documentation such as proprietary lease, offering plan, etc., with your attorney.... more
Is there any considerable risk living in a building where others are behind on their payments so long as I myself stay up to date.?
Yes, the reason the bank won't finance in buildings with 22% of the residents in arrears is because the bank underwriters perceive that building as not managed well.
Why are there 22% in arrears? Is there a managing agent actively trying to collect? Have they contacted the resident's lender? Have they initiated eviction or foreclosure procedure? they may be overlooking it because these shareholders may be long-time residents that eventually pay.
A coop can raise maintenance according to their byLaws but it most likely would not be necessary.
The size of building, their finances, reserves and if they have other revenue sources such as "flip-tax" will determine your risk factor.
Does the board care if the coop can not get financing. The risk that affects all shareholders is financing and re-financing. A good board and management company will work on fixing the arrears problem and cooperate with lenders to comply with lenders an Fannie Mae guidelines.
In HDFC coops many residents do not have loans since most of the original owners paid $250 for their apartments. I have represented many sellers and buyers in HDFC coops. The large per cent of shareholders in arrears is not un-common. The lender usually pre-approves the coop for 3 months at a time. However, different documents required by bank from coop may expire on different dates.
Lic. Assoc. RE Broker
corcoran group real estate... more