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

What Is A Self Managed Building?

Posted by All Area Realty Services Team on Oct 16, 2019 4:44:13 PM

When a building is self-managed, the owners take responsibility for running the day to day operations of the building. These buildings normally have lower maintenance fees because the building saves money by not paying a managing agent. 

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The pros to living in a self-managed building are lower maintenance fees and the owners are responsible for making the monetary decisions and making sure that the money is not wasted on unnecessary services.  

The cons are you will need to dedicate time to the building and you might lose one of your key players if the person decides to resign as treasurer because who will step in? Also, there are many layers to navigate through when dealing with NYC’s numerous ordinances and other tax requirements. 

Make sure to review the financials of the building before buying because there is potential for incomplete, un-audited or fraudulent financials. It is important to do your due diligence before signing a contract for an apartment in a self-managed building. Request an inspection to make sure the building is current on routine maintenance and capital improvement projects. Your real estate attorney should review the building’s financials, budget, offering plan and board meeting minutes. 

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

A Buyer's Market In NYC

Posted by All Area Realty Services Team on Oct 3, 2019 3:59:27 PM

These days, we are in a buyer’s market in much of New York City and therefore, co-ops and condos need to entice buyers with amenities. Most new buildings have many amenities but older buildings are lacking amenities like gyms, dog runs and roof decks. Learn what most prospective buyers are looking for in amenities.  

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Roof decks are a huge draw for buyers, especially if there is a furnished common space. Buyers want a place where they can meet people and hang out. People want to have a sense of community and having a roof deck provides an opportunity for people to meet their neighbors. When a building has a community room, it can function as a meeting place and a recreation spot for the residents. 

Buyers want a gym in their building. Older co-ops and condos do not need much space to create a well stocked gym. If there is unused storage space, it can easily be converted into a gym. 

Storage is important to potential buyers as well. Buyers want package rooms as well. They are also interested in buildings that are energy efficient and have less of a carbon footprint.

If you own an apartment in an older building, these co-ops and condos need to consider how they can make themselves more attractive to potential buyers. Ask what is in the budget and if there is space. If the building can accommodate the amenity and the residents want it, then add it to the building.   

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

Co-Op Boards & Condo Boards

Posted by All Area Realty Services Team on Sep 5, 2019 4:59:07 PM

A board whether it is a condo or co-op board is a group of elected volunteers. It is a boards duty to overlook complaints, hire a property manager, create and enforce the rules of the building. Co-op boards and condo boards have a lot of similarities in their functions, but there are some key difference you should be aware of when choosing between a co-op or a condo.

Co-Op Boards

The elected officials of a co-op board generally hire a property management company to supervise the care and maintenance of the building. The only exception is found amongst smaller buildings that may choose to self-manage with the intent to save money.

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In addition to hiring a property manger the board is responsible for creating and enforcing the rules of the co-op. Some common board rules are:

  • Whether you can speak on your cell phone in the lobby.
  • If (and what kind of) dogs will be allowed in the building.
  • When and what kind of renovations can take place inside your unit.
  • What activities are allowed to transpire on the roof deck.

A co-op board also holds the right to evict overly disruptive shareholders and force them to sell their unit.

Condo Boards

The directors of a condo board hold many of the same responsibilities and functions of a co-op board. However, most condo boards tend to have a more laissez-fair approach to rule making.

This more hands-off approach is mostly due to the fact that condos wield less legal power to enforce their rules. A board can’t evict an owner from an apartment like a co-op board can. This is because condo owners actually own their unit versus owning shares as in a co-op. A condo board can, however,  get a court ordered junction to stop any rule infraction from occurring again.

An important fact to keep in mind is that in both a co-op and a condo, your voting power has a direct relationship with the size of your apartment. Thus the bigger the apartment the greater the voting power you will posses. Both condos and co-ops have their pros and cons. The question you need to ask yourself is, would you prefer a more hands on or hands off approach to governing in your building?

All Area 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, Buying a Co-Op, Co-Op Building

Owning A Home: The American Dream

Posted by All Area Realty Services Team on Aug 29, 2019 3:26:48 PM

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The American dream is to own a home. However, these days more than a quarter of Americans live in a community association- a housing cooperative, condominium or homeowners association. In Florida, there are 48,250 associations, which is the most in the country. California has the next highest with 48,150, followed by Texas (20,050), Illinois (18,700), North Carolina (14,000) and New York (13,875). The home value of these communities is around $6.28 trillion with about $96 billion in assessments collect annually from the homeowners to fund essential maintenance.

There are numerous reasons for the growth of these community associations. First, there is value to having collective management consisting of democratically elected volunteer homeowners to serve their communities. In the US, there are 2.5 million community association board and committee members.

Also, many local municipalities face fiscal challenges and therefore, communities develop with the stipulation that the association will assume many responsibilities that traditionally belong to local and state government, like road maintenance, snow and trash removal and stormwater management. Most communities have reserve funds for repair, replacement and enhancement of common property, including elevators, swimming pools and streets.

These communities expand affordable housing and increase the percentage of homeowners in the U.S. Since the 1960s, condominiums tend to serve as an affordable option to buy housing, especially for first-time buyers. Condominiums account for about 40% of the total of community associations. In New York City, most buyers tend to buy condominiums because condos are real property and they do not have to submit a comprehensive packet to the co-op board, only to be denied ownership. 

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

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

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

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

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

Co-Ops With Professional Services or Business Units

Posted by All Area Realty Services Team on Apr 25, 2019 4:31:39 PM

 

Times are changing and NYC co-ops need to change with the times. Some co-ops sold shares to doctors or other professionals for ground floor space. Most of these offices have been around for years but now these doctors and other professionals are reaching retirement age and want to sell their shares to potential buyers. This creates problems when the co-op board does not want to change.

Co-ops prefer selling to individuals as opposed to selling shares to a limited liability company. Many boards are resistant to selling to a LLC, even if the space is used for a professional office. These days, most medical professionals do not open practices in his or her own name, instead a LLC is formed to restrict liability.

iStock-478524467The most important thing to change the co-op board’s opinion is to educate them and to change the application process and the required paperwork. Most times, these entities do not have a lot of assets and therefore, the co-op board can require that an individual grantor be responsible if the LLC does not pay the maintenance. Also, the board should require additional documents such as an agreement between the entity and the co-op stipulating the use of the space, authorized signer document from the state, and tax returns from the entity, guarantor and the individual. This helps to protect the co-op in case the LLC stops paying.  The co-op board should also determine if the entity will be a good tenant.

Changing the way that co-op boards think is beneficial because they will be able to get more per square foot and more flip tax. The board should educate themselves by learning about LLCs and how these types of sales should be handled. There are many commercial spaces in NYC and a partnership with a co-op and a LLC is a win-win with both parties. Boards should not wait to learn more until there is a potential sale. They should have everything in place before the potential sale because time is money and if all these safeguards are in place before the sale, then the sale will go smoothly and quickly. 

All Area 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.  If you serve on a condo or co-op board, get in touch with us and find out how we can help you manage your building.

 

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