Home Buying in Rego Park>Question Details

Betty Chan, Home Buyer in New York, NY

What does it mean the co-op building does not have a prospectus or a proprietary lease.............?

Asked by Betty Chan, New York, NY Thu Jul 4, 2013

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I only know a few hundred Co-ops in Queens and almost all of them have Offering Plan (prospectus), with very few exceptions. As for Proprietary Lease, let us not confuse that with land lease or ground lease. Proprietary Lease is a must for a Shareholder (tenant) to be able to live in a Co-op (landlord). When you "buy" a Co-op unit, you actually buy certain number of stocks which is allocated to a particular unit for which you get a Proprietary Lease and yes, it does have an expiration date which, Co-op will keep extending to the eternity. For legal purpose, you are a tenant in a Co-op and if you violate the Proprietary Lease, you could be evicted even though you "bought" the unit.
0 votes Thank Flag Link Mon Jul 8, 2013
Many buildings do not have a prospectus, as for the proprietary lease, is the building leasing the land using a land lease or ground lease? If that's the case that's fine as long as the lease still has 30+ years on it, otherwise lenders get leary of lending on the co-op.
0 votes Thank Flag Link Mon Jul 8, 2013
Almost all Co-ops have a Prospectus, which is actually the Offering Plan also known as the Black Book. Exception would be when a Co-op is an original establishment, not converted from a rental. However, Proprietary Lease is a must in every Co-op.
0 votes Thank Flag Link Fri Jul 5, 2013
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