Home Buying in 10023>Question Details

Stephane Lef…, Home Seller in New York, NY

Whats the best procedure to buy a sponsor unit and keep it a sponsor unit?

Asked by Stephane Lefebvre, New York, NY Thu Oct 11, 2012

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A sponsor unit means you are buying it, whether co-op unsold shares, or a condo, from the sponsor. You do not specify which. You cannot then "keep it as a sponsor unit" because you are not the sponsor. Once you have bought it from the sponsor (the developer) you own it, and you are not the sponsor, so it can never again be a "sponsor" unit. After you buy it, it will always be a resale. You can't buy a new car and sell it later as a new car, it is a used car. Same principle. Things are only new once.
1 vote Thank Flag Link Fri Oct 19, 2012
You should be speaking to your attorney about about this. The only way is to be designated a holder of unsold shares. If you are buying an apartment to be your residence then it is not even possible because you are a bona fide purchase using the premises for personal use..The only time a designation occurs is when an investor purchasers multiple units and the sponsor is willing to designate the investor a holder of unsold shares. The designation must be in writing.

Michael Richman
Licensed Real Estate Associate Broker
Bellmarc Realty.
681 Lexington Avenue
New York, NY 10022
Phone 212-688-8530 x223 Cell 917-991-2528 Fax 212-758-7495
Email mrichman@bellmarc.com
1 vote Thank Flag Link Fri Oct 12, 2012
Call me at 917-517-8572 if you'd like to discuss this. You can't do so with every sponsor unit, but with some. Obviously, from the answers youve received, not every broker understands this.
0 votes Thank Flag Link Mon Oct 22, 2012
Hi Stephane. I'll agree with Mr. Richman's comment. You simply cannot buy a single apartment that is being sold by the sponsor and be designated a "sponsor" yourself. I might think you want to buy a sponsor Coop (you don't mention coop or condo) and bypass the board's residency requirement before sub-letting the apartment. Nope.
0 votes Thank Flag Link Mon Oct 22, 2012
Unsold shares can remain "unsold" until the purchasers utilize the residence for their personal use. It is not necessary to purchase multiple properties in the building to be afforded this status, however, it is more commonly passed along to someone who purchases a block of property.

You'll need a good real estate attorney and you'll need a good broker who can locate a property where this can happen. I've accomplished this previously and would be happy to help. I can be reached at 917-517-8572 or jmincheff@corcoran.com.

Joyce Mincheff
0 votes Thank Flag Link Fri Oct 12, 2012
I would be interested to know why would you like to keep sponsor unit as a sponsor unit even after you purchase it? Is it because, in case of a sponsor unit, there is often no board approval required for renting? Unfortunately, once someone buys an apartment from sponsor, it is no longer a sponsor unit and a proposed tenant has to go through the board. Is the leasing/board approval procedure at this particular building difficult? If you would like to talk about it, please feel free to call or email me.
Thank you

Krystyna Rachtan, Licensed Real Estate Broker
Phone (917) 204-9622
kr@ny-home.net
NEW YORK HOME REAL ESTATE SERVICES, INC.
295 Madison Avenue, New York, NY 10017
0 votes Thank Flag Link Thu Oct 11, 2012
sponsor unit is called that way because is it owned by a sponsor, the original developer/investor that still owns certain percentage of apartments in the building. Once you purchase it will have the same status as all other non-sposor units.
0 votes Thank Flag Link Thu Oct 11, 2012
Hi, what makes a sponsor unit unique is it's being offered for sale from the sponsor for the first time. Once it transfers it will need board approval for each sale after. Keep in mind, even though the unit doesn't need board approval the board still looks over the purchasers application.

Chris
0 votes Thank Flag Link Thu Oct 11, 2012
Once a co-op sponsor unit is purchased, it generally doesn't remain that way. For any necessary legal advice consult with an attorney....
0 votes Thank Flag Link Thu Oct 11, 2012
Hello Stephane,
When you buy a sponsor unit, it will no longer be a sponsor unit. Once a sponsor unit is sold for the first time, it becomes a resale for the next one buying it. As a sponsor unit owner, the first privilege you will have is not to have a board interview. The second one, and it depends on the sponsor, is the privilege to lease the unit as you wish. In many cases, you will get the sponsor unit at a lower price than the other resale price in the same building. Many sponsor units, will not be renovated and you get to renovate them at your own pace and at your taste. On the other hand, when you buy a sponsor unit, you may have to cover the closing cost of the sponsor. And sometimes not always, the lender, will want to make sure that the sponsor sold at least 51% of the total units in the building in order for you to borrow.
Fern Hamberger
VP Associate Broker
fhamberger@citi-habitats.com
0 votes Thank Flag Link Thu Oct 11, 2012
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