New York based property management firm, All Area Realty Services blog. Find tips for Co-Op Boards & Residential Building Management.

Looking To Buy A NYC Co-Op?

Posted by All Area Realty Services Team on Aug 2, 2019 1:59:11 PM

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Are you thinking about buying a co-op apartment in New York City? Read on for all the details involved in purchasing your very own piece of NYC.

Purchasing a co-op takes about three months from the time you sign the contract of sale until you close. Closing costs are less than when you buy a condo. NYC co-ops have strict financial requirements and sublet restrictions. There is a lengthy board application and board interview before you can close on the apartment. Buying a co-op is generally less expensive than purchasing a condo because there are more co-ops than condos and investors tend not to buy them due to the sublet restrictions.

When you buy a co-op, you buy shares in the corporation. You received the shares and proprietary lease at closing. Co-ops are not considered real property. The board of directors runs the building and they enforce the various rules.

Once you have an accepted offer, you will need to hire a real estate attorney to review the contract, due diligence and negotiation and representing you at the closing. Your attorney will review the co-op’s original offering plan, the building’s financials statements, house rules and the board’s purchase application. Upon signing the contract, you will need to write a check for 10% of the purchase price as the deposit. The contract is not valid until both the seller and the buyer sign it. Now each party is legally bound to the transaction. Typically, after an executed contract, the closing will be in two to three months. Beware; that a co-op board may reject a purchase contract and if this is the case, then the buyer can leave the deal without penalties. The buyer may never get a reason for the rejection.  However, in most cases, a buyer should keep his or her interview short, sweet and polite. Most times, the board has already approved you and they just want to meet their newest neighbor.

Once you receive board approval, the managing agent will contact you and you will be able to close within one to two business days after the interview. After the co-op board approval, you need bank approval and then the attorneys will coordinate a closing date that works for all parties.

The day before closing, your real estate broker will schedule a final walk-through for you to inspect the apartment and to make sure everything is in working order. Look for any damage that may have been caused by the movers. In New York, properties are sold as is and the only way to prove that something has changed substantially is to take photos.

On the day of closing, there will be attorneys representing the bank, the seller and the buyer as well as the building’s managing agent and the real estate brokers. After all the papers have been signed, you will receive the key to your very own apartment.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service professional property management for cooperative and condominium boards in the Manhattan area.

Topics: Buying a Co-Op, Selling a Co-Op

The New Rent Laws May Change New York City Housing

Posted by All Area Realty Services Team on Jul 25, 2019 5:55:03 PM

New York State passed new rent laws that will change New York City housing. Before these laws were passed, a landlord could convert their property from a rental to a co-op or condominium as long as they sold 15% of the total units to primary home buyers. Now, landlords need to sell 51% of units. Hence, giving the tenants control of the landlord’s property. The reason for this is to protect tenants from landlord harassment to have them vacate their apartments. Some landlord were aggressive and not following the existing laws prohibiting tenant harassment in rent-regulated buildings. Lawmakers wanted more protections for these tenants by putting them in control of the process. Some people believe that this will have serious negative implications for the future of conversions.

In the past, landlords looked at conversions as a way to turn nonperforming assets into profitable ones. Since operating costs and taxes are rising, there might be economic hardships for the property owners even to the point of deferred maintenance. Deferred maintenance occurs when an owner holds off on repairing old or broken systems due to the high cost of such repairs. This deferred maintenance affects the physical appearance and stability of the property and will create a trickle-down effect to other industries like legal, accounting, construction, brokerage and advertising. If the property owner has a small portfolio, this can mean serious economic hardship in regards to their investments.  

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In NYC, there are a lot of older buildings that require major capital improvements and upgrades. When a landlord converts a building, he or she will improve the building while reducing its carbon footprint. Without these conversions, most upgrades might stop and it might cause the properties to fall into further disrepair. There can also be environmental concerns as well because these older buildings do not have efficient heating systems, new windows and new roofs. This might have a negative impact on the environment.

However, there may be exceptions to these new rent laws and the state attorney general will need to make guidelines to approve certain rental conversions. Perhaps there can be a financial litmus test regarding economic hardships on the landlords and if there is a financial hardship, then the landlord might be able to convert it.  We do not know what this new law will bring. It can bring many beneficial changes because the tenants might be more vested in their buildings knowing that they cannot be easily kicked out. Landlords and tenants should be able to bridge the gap and work together to do what is right for both sides.

With over thirty years of experience, All Area Realty Services is well versed in the laws and regulations that can effect co-op boards and condo associations.  With our guidance and advice, our client's can trust that we work with them in safeguarding them at all times. 

Topics: Co-Op Board

Who Is Responsible For A Leak?

Posted by All Area Realty Services Team on Jul 17, 2019 2:24:17 PM

Who is responsible when a leak occurs in your bathroom that a previous owner remodeled? Who would be responsible for mold, if there is any?

To figure out who would be responsible, you need to look at the source of the damage to the bathroom. Start by testing where the water is coming from. If it is coming from the part of the wall, which is attached to a common area, then the co-op board should pay for the investigation or allow the owner to test where the water is coming from at his or her expense. It depends on where the leak is and whose wall it seems to be coming from.

iStock-921346082Once the inspection occurs, if it is found that the ultimate source of the water is coming from a common area of the building, then the board should pay to fix the problem and should reimburse the shareholder for the testing and the damage including any mold. If the water leak is coming from the shareholder’s wall, then the owner should pay.

If you serve on a co-op board and need professional property management services, contact All Area Realty Services and find out why our over 30 years experience and loyal clients makes us experts.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area. 

 

Topics: Co-Op Board, Renovations

Will It Be A Co-op Or A Condominium?

Posted by All Area Realty Services Team on Jul 2, 2019 5:09:39 PM

NYC co-ops are different from condos. When you own a co-op, you do not own the physical apartment but instead you own shares in a corporation and you receive a proprietary lease on the unit. When you rent a co-op, you are subletting the apartment from the shareholder who holds the lease. Here are some questions to ask yourself when planning on renting a co-op.

When subletting, check the building’s sublet policy. It may put restrictions on how long you can stay at the apartment. The rules vary by building but most buildings allow sublets for a maximum of 2 years. If you want to stay in an apartment for longer, renting a co-op might not be best.

Be prepared to fill out an application for the co-op board and to interview with them, if you are looking to sublet in a co-op. If you sublet a condo, you just need to pass a basic credit check and verify your income.Screen Shot 2019-03-14 at 4.04.33 PM

Rules can be quite strict in a co-op building. The rules can focus on noise levels, pets, and other things that ensure a quiet living situation. There are also overall policies of the building and these can change if the board wants to change them. These potential changes can be about the sublet policy and then you might not be able to keep renting the unit.

There will be additional fees that you need to pay to the co-op. These fees may include a move-in, move-out or an application fee. Co-ops may require that the owner pay additional maintenance if there is a sublettor. Most times, this fee is included in your rent but if the fees change, the owner may try to increase your rent to include the additional fee. Ask if the building charges extra fees for sublets.

Make sure to ask about the pet policy of the co-op. Most co-ops have a pet policy in place and these policies are specific about the size or weight and the number of pets per unit. Sometimes, the board will ask to meet your pet. The majority of co-ops just ask that a form be filled out saying that your pet is vaccinated and meets the building requirements. Double check that the pet rules apply to sublettors.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area.

 

Topics: Buying a Co-Op, Buying a Condo

Considering A Property Management Company?

Posted by All Area Realty Services Team on Jun 27, 2019 2:40:14 PM

Are you looking to hire a property manager? What are a property manager’s responsibilities? Their responsibilities vary based on the type of property they are managing, the amount they are paid and the terms of the management contract.

A property manager’s has the responsibility to collect rent from tenants. They will set up a system for collecting rent, which includes the date rent, is due and collecting late fees if the tenants are late with payment. A property manager may determine the correct rent to be charging to get more tenants to your property and to increase your returns. They may also adjust the rent if they feel it is necessary.

Another responsibility is to manage the tenants. This includes finding and screening potential tenants, managing the day-to-day complaints, maintenance issues and tenant move outs. In order to find tenants, property managers will advertise by having an ad that will attract tenants. Once there is a tenant, the property manager should have a screening process that includes credit checks and background checks. A great property manager will have the experience and knowledge about finding and attracting the right tenants. They set the lease term and determine the amount of security deposit required. Once a tenant decides to move out, the property manager needs to inspect the unit to check for damages and to determine what portion of the security deposit to return.

The property manager is responsible for maintaining the property. This includes regular maintenance, emergency repairs and upkeep of the grounds. They hire contractors if they cannot handle the repairs themselves.

A property manager should be well versed in landlord tenant law. This is important when dealing iStock-841723220with screening a tenant, handling security deposits, terminating a lease, evicting a tenant and complying with property safety standards.

Property managers are responsible for managing the other employees at the building and making sure they are doing their jobs properly. A property manager may be hired to watch vacant properties to ensure there are no vandals and to perform routine maintenance.

The property manager is responsible for the budget of the building and must operate within the budget. They also keep the records for the property, which includes all income and expenses, inspections, signed leases, maintenance requests, records of repairs, costs of repairs, rent collection and insurance costs.

Lastly, a property manager needs to be able to assist the owner with understanding how to file the taxes and then the property manager may also file the taxes for the property.


All Area Realty Services knows what it takes to run buildings smoothly and efficiently while keeping both tenants and owners happy.  With over 30 years of experience, and many clients with All Area Realty Services for decades, All Area can be trusted with taking care of your building and tenants. 

Topics: Co-Op Board, Property Management, Condo Board Association, property manager

Thinking Of Buying A New York City Co-Op?

Posted by All Area Realty Services Team on Jun 20, 2019 4:38:31 PM

iStock-656652922Are you ready to buy an apartment in New York City? Remember to factor in the cost of the monthly maintenance, if you are buying a co-op apartment. Maintenance covers building expenses like mortgage payments, taxes, staffing and upkeep. It varies from building to building and apartment to apartment.

Let’s investigate how maintenance is calculated.

Most co-op buildings have an underlying mortgage. The shareholders of the building make payments on this mortgage through their maintenance. If there is a large loan on the building, that makes the maintenance higher. Some older buildings refinance to absorb the capital improvements, which can lead to higher maintenance.

The building’s property taxes are included in the maintenance as well. The co-op pays the taxes for the land and the building. Shareholders can get reductions in their percentage of taxes that they pay due to different tax breaks like being a senior or having a disability. 

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Depending on the size of the building, your maintenance can be more or less. When there are more apartments, there are more shareholders to split the costs and therefore maintenance will be less. If you have more amenities to maintain, your maintenance will be more because all those amenities need to be maintained. If the building is a full service building, it requires more staff due to the high expectations of the shareholders and therefore, maintenance will be more. Also, if the building employs union workers, then it is a more expensive building to run.

Make sure that the co-op has a good system in place for keeping track of expenses because it could mean more money coming out of your pocket. Also, there might be shareholders who are not paying their maintenance, which in turns increases your maintenance.

If there is a commercial space in the co-op, this can increase cash flow and help to keep maintenance low. However, if the retail space is empty, then the shareholders need to cover this lost income, thereby increasing maintenance.

Check to see if the building owns the land or if it rents it from another entity (land lease).  A land lease might cause the maintenance to be high since the building is paying someone else to occupy the space.

Lastly, the maintenance depends on how many shares you receive when you buy an apartment. Some apartments have more shares than others do. This is in part due to the inconsistencies of the layouts in older buildings, which made it difficult to evenly divide the shares.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service professional property management for cooperative and condominium boards in the Manhattan area.

Topics: Buying a Co-Op, Selling a Co-Op

What You Need To Ask When Hiring A Property Management Company

Posted by All Area Realty Services Team on Jun 12, 2019 4:54:17 PM

Do you own property and are looking for the right property management company? Here are some things to ask before hiring a property management company.

In New York, a property manager needs to be a New York State licensed real estate agent. Beware of property managers who do not have any sort of state license to practice real estate. Ask how many properties that the property manager is managing and what type of properties (duplex, small building, condos etc.) because the management of the property varies depending on what type.

Most management companies are paid based on the amount of rental income the property generates. However, there could be extra charges like tenant finder’s fees, maintenance markups, emergency on all services, maintenance reserves, evictions, court costs and other charges. Ask your potential property manager to clearly outline the fee structure in writing.

With income property, your financial data is really important to see what areas you can improve and how to make more money. A property manager needs to be able to explain everything on your reports in a clear and concise manner. Clarify when and how each report will be delivered to you.

A professional property manager will have a system for screening potential tenants. Make sure you understand what is done in the screening and who makes the final determination about the potential tenant renting the apartment.

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Every property will need maintenance at some point. Find out who does the required maintenance at your property. Your property manager needs to understand what needs to be done in regards to the type of work, the correct licenses and certified contractors for the work and if there needs to be permits. Keep accurate records of what has been done and by whom.

Ask about how the rent is collected. Most property management companies have a policy on rent collection. Each lease should outline exactly when rent is due, the amount and late fees. The lease should state when the tenant is in default and when the eviction process can begin for nonpayment. Property managers need to have sample documents like leases, property management agreements, move in/move out condition reports, property owner financial reports, rental applications and common correspondence. In regards to the property management agreement, understand the terms of the agreement, including length of the term, renewal of the agreement, and how to end the agreement if either party is not happy with the partnership. Have an attorney review the agreement before signing it.

Finally, ask about references. Speak to people who have worked with the property manager and ask them to tell you both good things and bad things (if there are any). Be careful of property managers who cannot provide references.

These factors will help you in finding the right property manager for your investment property to grow and thrive.

All Area Realty Services knows what it takes to run buildings smoothly and efficiently while keeping both tenants and owners happy.  With over 30 years of experience, and many clients with All Area Realty Services for decades, All Area can be trusted with taking care of your building and tenants. 

Topics: Co-Op Board, Property Management, Condo Board Association, property manager

The Difference Between A Landlord & A Property Manager

Posted by All Area Realty Services Team on Jun 5, 2019 1:19:42 PM

iStock-855667636Welcome to NYC real estate where the options are endless! Should you pay a broker’s fee? Should you live in a new building? Should you live in a landlord operated building or a building operated by management? There are many things to look for when deciding on moving into a building operated by a management company as opposed to one run by the landlord.

A landlord owned and run building is where the landlord does the day to day management of the building. A building operated by a property management company is one where the landlord hires the property management company to run the day to day operations and to maintain the building. Landlord operated buildings tend to be smaller. If you want to be able to bargain, consider renting directly from landlord only managed building.

Landlords and property managers are similar because both are responsible for maintaining and running a building. Other duties include vetting tenants, resolving maintenance requests, collecting rent, upkeep of the property, and tracking property expenses.

Some differences between landlords and property management companies are when dealing with a landlord, it is a more personal relationship. While this can be beneficial if the landlord is trustworthy and cares about his tenants and building. It is detrimental when the landlord is delinquent and does not maintain the building. When you have a property management company, you are one of many and therefore, there is not a personal relationship, but property management companies are more diligent in resolving any maintenance issues you might have.

Whatever you decide, be aware that both landlords and property management companies must obey the local laws. In NYC, there are laws on heating, hot and cold water and overall safety and habitability of buildings. For more information on the basic living conditions that must be provided, look at NYC’s warranty of habitability guidelines

All Area Realty Services knows what it takes to run buildings smoothly and efficiently while keeping both tenants and owners happy.  With over 30 years of experience, and many clients with us for decades, you can trust All Area Realty Services with taking care of your building and tenants. 

Topics: Co-Op Board, Property Management, Rentals, Co-Op Building, property manager

Vacant Lots Around New York City Are Getting A Make Over: Affordable Housing

Posted by All Area Realty Services Team on May 21, 2019 1:45:29 PM

Topics: Co-Op Board, Buying a Co-Op, Co-Op Building

Weighing The Differences Between A Co-op & Condominium?

Posted by All Area Realty Services Team on May 14, 2019 3:56:24 PM

 

New York City is like no place on earth and this is especially true when speaking about the real estate market. Most apartments in NYC are either condos or co-ops, but there are more co-ops than condos. However, there are more condos for sale than co-ops.

There are many differences between a co-op and a condo. The major difference is  that when you buy a co-op, you are buying shares in a corporation (your building) and when you buy a condo, you get your apartment and a percentage of the common areas. For co-ops, your shares depend on the size of your apartment and these shares allow you to occupy a unit in the building. At a co-op closing, you will receive a stock certificate and a proprietary lease. At a condo closing, you will receive a deed.

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Most buildings in older neighborhoods are co-ops and the newer buildings are condos. Prewar buildings are generally co-ops. Most co-ops and condos have doormen and supers. Some buildings will have more amenities. Also, the downpayment for a condo is less than a downpayment for a co-op.  

Another huge difference between a condo and a co-op is the amount of closing costs that a purchaser will pay. Since a condo is considered real property, there are a lot more fees paid at closing. When buying a co-op, the shares are considered to be personal property and therefore less money is paid at closing.

Each month, an owner needs to pay a fee for the upkeep of the building. If you own a condo, this fee is called common charges. A condo owner pays taxes as well. If you own a co-op, the fee is called maintenance.  Maintenance and common charges can change if there are any major expenses (new roof, new lobby) that come up. The board decides how much the fee will be raised and it is rare for the fee to decrease.

iStock-1086276184Co-op board approval is an arduous and rigorous process for the potential buyer and he/she can be rejected and lose the apartment. Condo boards are generally less demanding of the potential buyer. Condos may request a package on the buyer but there is no interview and the building only has the right of first refusal (they either have to approve you or the condo has to buy the apartment). In general, co-ops have many rules and some of these rules may dissuade buyers. Co-ops want residents to stay for long periods while condos are not as concerned about that.

The question remains, which type of apartment is more preferable and the answer is it depends. Generally, co-ops are more for people who want to remain in their apartment for a long time. Co-ops are great if you want to know your neighbors but be prepared to be analyzed and prodded. However, this process makes for a stable and secure investment.  

If you prefer being left to your own devices and value flexibility, then buying a condo might be the best choice for you. Keep in mind, that this freedom comes with a price and condos are normally more expensive than co-ops.

All Area Realty Services is New York City’s leading real estate management company specializing in full-service property management for cooperative and condominium boards in the Manhattan area.

 

Topics: Buying a Co-Op, Buying a Condo