Home Buying in Queens>Question Details

Aris, Home Buyer in Queens, NY

What is the difference between sponsored vs board approved coops? Is it different type of ownership? pros/cons

Asked by Aris, Queens, NY Tue Feb 19, 2013

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A sponsor unit does not require board approval...however you still need to pass the financial requirements for the building as set forth by the spansor. There is no board interview so basically, if you have the finances, you get in. It is the same type of ownership, however, when you re-sell, or sublease you will need board approval.
0 votes Thank Flag Link Tue Feb 19, 2013
A sponsor unit is a unit that is being offered for sale for the first time by the original sponsor. Even though they don't technically need board approval, for the first sale, they board will still look over the app package. Any sale after this will require board approval, it's a one time deal.
0 votes Thank Flag Link Tue Feb 19, 2013
Generally a sponsor unit is owned by either a corporation or an individual and has not been resold, therefore no board approval is required; to consider, oftentimes the buyer is expected to pay any NYS transfer tax, and seller's attorney costs, etc. thus adding to the purchase price; a board interview is not required with sponsored units.
0 votes Thank Flag Link Tue Feb 19, 2013
Hi Aris,

All coops have a sponsor who is the owner of the property before it was a coop and has "sponsored" the offering plan by which the building becomes a coop when the conditions are met to declare the offering plan effective. Your question seems to refer to sponsor owned apartments. Until a particular apartment is sold, it is owned by the sponsor. The sponsor has special rights as the owner of the property who converted the building to a coop. One of these rights is to sell the apartments to anyone they choose. Once an apartment has been sold by the sponsor, any further sale is subject to the approval of the board of directors that runs the coop. For a purchaser, obviously it is easier to buy from a sponsor since you do not have to submit your financial information in the form of a board package, do not have to be interviewed and cannot be rejected once your offer is accepted and the contract is fully signed. However, there are very few sponsor apartments left to purchase these days since there have not been many new coops in recent years.

Michael Richman
Licensed Real Estate Associate Broker
KIAN Realty
450 7th Avenue Suite 1501
New York, NY 10123
212-757-8268 x220
917-991-2528
mrichman@kianrealtynyc.com
http://www.kianrealtynyc.com
.
0 votes Thank Flag Link Tue Feb 19, 2013
A sponsor unit is an apartment that was held by the sponsor as an investment, the original developer who originally built the building or converted the building into a coop. Usually Coop units owned by sponsors do not require board approval but you still have to abide by the coop rules and submit an application. In most cases Sponsor units cost more than regular ones because people who cannot pass the board can buy them. You may also be able to put less down payment than usually required. Buyers of sponsor units will most likely have to pay the transfer taxes and in some cases the sponsor's attorney fees as well.

Nida kabbaj
Exit realty by the park
917-681-1102
http://www.thequeensmls.com
0 votes Thank Flag Link Tue Feb 19, 2013
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