Remodel & Renovate in 11224>Question Details

Cuirious, Home Buyer in 11224

Electrical work in the coop apartment

Asked by Cuirious, 11224 Fri Jan 15, 2010

Is it legal for the coop management to request all the electrical works in the apartment to be performed by their local electrical company? Is not it considered a monopoly? Do I have to obey this rule?

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I'd have to disagree with you on that point, Tim. Co-operative corporation ownership is still by far the dominant form of homeownership in NYC and it isn't going anywhere. Indeed, it has often been stated that the reason NYC has bypassed so many of the foreclosure woes that have beset this country is the prevalence of co-ops. Banks may have been throwing money at anyone, but co-ops' financial standards insured that unqualified buyers were not able to purchase in their buildings.

And unlike condo common charges, a percentage of co-op maintenance is usally tax deductible, bringing the two very much in line.

Furthermore, the liberal rental policy of condo buildings can be a large disadvantage if you are concerned about who your neighbors are. Condo owners can rent out their apartments virtually at will, whereas co-op subtenants have to be approved by the board and the term of the sublease is usually limited.

So it really all depends on what you, as a buyer, are looking for. Condos are better for some people and co-ops for others. Anyone's best bet in this siutation is to have a discussion about the pros and cons of both forms of ownership with a real estate broker.
0 votes Thank Flag Link Sat Jan 16, 2010
Cuirious,
It is important to understand the nature of a co-op situation. You actually do not own your apartment. You own shares in the entire building with rights to occupy your apartment. In essence, everyone owns the walls in your apartment and ergo have rights to decide what goes in those walls. Also they have the right to determine/approve any plans you have to remodel. As to the electrical work you want done, whether you agree or not, you have also legally contracted with this electrical company via your Co-op board. And when that Co-Op board decides to make a major infrastructure improvement like replacing the windows in your apartment, they have the rights to do that and charge you a surcharge in your maintenance fee regardless of your ability to pay. You can also be held financially liable for any law suits against your Co-op. Such as a trip and fall on the sidewalk outside.

I am surprised that your real estate agent did not at some point explain this to you. And if you have already purchased, somewhere you were handed a copy of the propectus on the Co-op which should include all the information you require on your co-op board.

Co-Ops can be less expensive to purchase, but once you add in the potential for liabilities, the fact that your neighbors have decision making power in your apartment, and the ever skyrocketing maintenance fees, in the long run they are probably not a good financial plan.
0 votes Thank Flag Link Sat Jan 16, 2010
Check your by-laws, proprietary lease, and or contact management--they do have rules as to who can do the work, especially if the work could affect the entire complex.

Anna
0 votes Thank Flag Link Sat Jan 16, 2010
I assume that you are not yet an owner in this co-op; otherwise you would hopefully be familiar with all building policies. The House Rules is a good place to start; there will also be parts of the proprietary lease (the document that allows you to occupy your apartment) that deal with some of these items. Once you have an accepted offer on a co-op property. all of these documents, plus more, are forwarded to your attorney, who will review them as part of the due diligence process. Once this is done, if there is anything with which you are not comfortable, you are under no obligation to sign the contract, and can just walk awayy from the purchase at that time.

All co-ops and most condos do have this type of rule; most require that a licensed, bonded, and insured electrician be used for all such work (and some do actually specify the firm); this is necessary for the building's insurance policy. Condos do generally have fewer rules overall, so you may be better off looking to buy a condo versus a co-op.

Good luck!
0 votes Thank Flag Link Sat Jan 16, 2010
No, that has nothing to do with a monopoly. It is so very legal for a co-op to maintain an approved list of contractors, and very wise, I might add.

Not only do you have to obey this rule, you actually have to obey all of the rules. If you don't like the rules, you should sell and join a co-op where you do like the rules.
0 votes Thank Flag Link Fri Jan 15, 2010
Hi:

Some of the management require a certain company to do work especially when it is an attached condo/ apartment or town home. The reason is that there were cases in the past where homeowners want to save money and so they get cheap labor. However, if the job is not done right, any thing that arise for example fire, would not only effect you, but others who share the same walls with you. If they have written regulation on this, then all residents there need to abide to that. I know it may cost more, but usually they require that for safety reasons.

Alisha Chen
0 votes Thank Flag Link Fri Jan 15, 2010
Thanks Lynn. But where can I find building guidelines?
0 votes Thank Flag Link Fri Jan 15, 2010
You need confer with guidelines of building if those are rules you need to comply with regulations established.
0 votes Thank Flag Link Fri Jan 15, 2010
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