when you purchase a co-op, your lawyer will get a copy of the proprietary lease, and the last 2 years worth of financials, prospectus. By going through these papers they will tell you if the building is in good financial standing. If you wanted to go further, you could ask to read the minutes of the Board's meetings to see what projects are going to be done on the building and if the money to do it is in the reserve fund. If it isn't, a special assessment will be required from the tenants to do the projected jobs, or the maintenance will have to go up. I hope that answers your question.
Get a good real estate lawyer to review the coop rules; they differ from each building. Itâ€™s also best to know someone who lives in the building of are able to speak to someone on the board.
A good Realtor should be able to help you with this at no cost to you.
Give me a call anytime DS!
Cell: 212 300 3919
Commercial | Residential
REMAX PARK SLOPE
Direct: (212) 300-3919
If that doesn't explain high maintenance, then you certainly do need to find out exactly why.
Licensed Real Estate Salesperson
New York, NY
The main thing you need to look at is the buildings financial statements. If the building is in good financial condition chances are the maintenance will not go up soon. If the building is in poor financial condition chances are the maintenance will be going up soon. The financials are probably the most important thing.
In addition to that you want to know how much of the co-op is privately owned vs sponsor or investor owned. If the percentage of privately owned units is too low (less than 50%), some banks will refuse to give a mortgage to someone purchasing in that building. If you are going to be getting a mortgage, the co-op building itself must also meet the banks qualifying criteria otherwise you will be denied the loan.
Aside from that, here is a list of questions that are good to know anytime a consumer is looking to purchase a co-op:
1) Who is the managing company/agent? And their phone number?
2) Are pets allowed?
3) Is subletting allowed?
4) Is there a minimum down payment requirement?
5) Is there a minimum income requirement?
6) Is there a proprietary lease?
7) How many units total are in the building?
8) How many units are sponsor owned?
9) What utilities are included in the maintenance (heat, etc.)?
10) Is there a flip tax and/or transfer fee?
11) Is any portion of the maintenance tax deductible? If so how much?
If I can be of further assistance, please let me know. Good luck!
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783