The Mortgage Forgiveness Debt Relief Act of 2007 now allows co-ops to raise rents for their retail tenants, which could bring in more money to pay for staffs, and capital improvements and can lead to reduced monthly maintenance fees.
The change in the law modified those rules, and co-op boards can now get high rents for their retail space and use the income for building operations and improvements without losing their coop tax status.
Because of the previous 80/20 law many rental buildings with commercial space converted to "condops" rather than coops. Many new developments in the 1980's were "condops"
A condop is a "hybrid" A condominium made up of a separate commercial unit and residential unit. The residential unit is a cooperative.
Dentist and doctor's offices are considered "professional" space and they are considered commercial office space. Many doctors bought the professional space. Since corporate ownership is usually not allowed in coops, the co-op usually requires the doctors who own the professional corporation to buy the apartment, but the co-op then allows the doctors to lease the apartment back to the professional corporation.
Mitchell Hall, Associate Broker
The Corcoran Group
You can read all about it here:
It's nothing to be alarmed or worried about. Co-ops are a beloved form of housing for many thousands of New Yorkers (including moi!)
Karla Harby, VP
Charles Rutenberg Realty