Co-Op: When buying a co-op, what questions should its management be asked? In particular, if maintenance costs are high and the building is old.

Asked by DS, 10004 Mon Jun 25, 2012

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Patricia Ben…, Agent, Brooklyn, NY
Mon Jun 25, 2012
Hi DS,
when you purchase a co-op, your lawyer will get a copy of the proprietary lease, and the last 2 years worth of financials, prospectus. By going through these papers they will tell you if the building is in good financial standing. If you wanted to go further, you could ask to read the minutes of the Board's meetings to see what projects are going to be done on the building and if the money to do it is in the reserve fund. If it isn't, a special assessment will be required from the tenants to do the projected jobs, or the maintenance will have to go up. I hope that answers your question.
2 votes
Jacques Ambr…, Agent, Forest Hills, NY
Mon Feb 11, 2013
consider checking into the board minutes to see if the maintenance is set to increase of if there is an assessment in the future plans. A mortgage refinance can alos affect maintenances
1 vote
Anna M Brocco, Agent, Williston Park, NY
Mon Jun 25, 2012
Since each co-op is different, before entering into a contract to purchase, review the building's financials, check for assessments, bylaws, proprietary lease, etc., with your attorney, and go from there. If you are not working with an agent, consider the idea. If purchasing with a mortgage, be aware that a mortgage pre-approval letter is required in order to determine your price range and for any offers to be taken seriously.
1 vote
Mcrina, Home Buyer, Brooklyn, NY
Fri Oct 11, 2013
dont have any experience in purchasing a coop. I need the basic info required to start.
0 votes
Luke Constan…, Agent, Brooklyn, NY
Tue Jun 26, 2012
If you are buying in Brooklyn Heights, your maintenance is going to be high due to your location.

Get a good real estate lawyer to review the coop rules; they differ from each building. It’s also best to know someone who lives in the building of are able to speak to someone on the board.

A good Realtor should be able to help you with this at no cost to you.

Give me a call anytime DS!
Cell: 212 300 3919

Luke Constantino
Commercial | Residential
Direct: (212) 300-3919
0 votes
First Last, , 90002
Tue Jun 26, 2012
If the maintenance is high, consider the size of the building. Fewer units means fewer people to carry the burden of the building's costs. Often consumers overlook this factor when comparing buildings.

If that doesn't explain high maintenance, then you certainly do need to find out exactly why.

Karla Harby
Licensed Real Estate Salesperson
Rutenberg Realty
New York, NY
0 votes
Mitchell Fel…, Agent, Brooklyn, NY
Mon Jun 25, 2012
Dear Ds:

The main thing you need to look at is the buildings financial statements. If the building is in good financial condition chances are the maintenance will not go up soon. If the building is in poor financial condition chances are the maintenance will be going up soon. The financials are probably the most important thing.

In addition to that you want to know how much of the co-op is privately owned vs sponsor or investor owned. If the percentage of privately owned units is too low (less than 50%), some banks will refuse to give a mortgage to someone purchasing in that building. If you are going to be getting a mortgage, the co-op building itself must also meet the banks qualifying criteria otherwise you will be denied the loan.

Aside from that, here is a list of questions that are good to know anytime a consumer is looking to purchase a co-op:

1) Who is the managing company/agent? And their phone number?
2) Are pets allowed?
3) Is subletting allowed?
4) Is there a minimum down payment requirement?
5) Is there a minimum income requirement?
6) Is there a proprietary lease?
7) How many units total are in the building?
8) How many units are sponsor owned?
9) What utilities are included in the maintenance (heat, etc.)?
10) Is there a flip tax and/or transfer fee?
11) Is any portion of the maintenance tax deductible? If so how much?

If I can be of further assistance, please let me know. Good luck!

Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
0 votes
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