Jeanne M. Reardon

 

What is a Cooperative Apartment

 

When you own a cooperative apartment, you do not actually own real property. There is no deed, like with a house or a condominium.  Instead, a co-op owner receives a stock certificate and proprietary lease. The larger your apartment, the more shares of stock within the corporation you own. As a shareholder in a corporation, you are also entitled to a lease from the corporation (the Proprietary Lease) giving you the right to live in the apartment.

 

As a co-op owner you will be required to pay monthly maintenance fees to the co-op corporation which consists of your proportionate share of the cost of operating the building. You are entitled to receive a tax deduction for a portion of your maintenance payment that is applied to the real estate taxes and interest on the underlying coopertive corporation's mortgage.  .

 

Monthly maintenance fees for co-ops are usually higher than for condos. This is because the monthly fee includes part of the underlying mortgage for the building. Also, many co-op boards limit the amount of the purchase price that can be financed and require higher down payments than are usually required for condominiums.

 

All prospective purchasers of a co-op must be approved by the Board of Directors. The co-op corporation is governed by an elected Board of Directors whose powers are derived from the certificate of incorporation, bylaws, rules and regulations and the proprietary lease. The Board approval process is often rigorous and time-consuming -- it requires an application that calls for extensive information regarding finances, employment, and personal background. Your co-op attorney should make provisions in the contract of sale for return of the contract down payment if your sale is not approved by the Board of Directors.

 

Our Real Estate Practice

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• Draft and negotiate Contract terms
• Preparation for Board review
• Review of bank commitments
• Liaising with cooperative boards and cooperative corporation attorneys
• Preparation of closing documents
• Representation at closings

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Jeanne M. Reardon is an experienced New York Coop Attorney who will personally handle your co-op closing and guide you through the process.