With limited space in the “concrete jungle”, cooperatives are a big thing in NYC. But only the people who can handle the rules and bureacracy associated with it who should buy into one. Personally, it’s not for me. I can’t own my home but still have to act like I have a landlord, especially if you have an overbearing board to deal with.
I’ve been managing buildings in New York City for 11 years now, and the most challenging part of management for me was when I had to manage a building that was a co-op. From dealing with hardline board members who never seem to be satisfied, to frustrated shareholders who feel overly restricted from doing anything, there were times I would go home in tears from the stress!
If you are considering to purchase a co-op, do your research and be sure it’s for you! Understand that you are purchasing SHARES in the building, therefore you are only part owner of YOUR apartment. If you want to do any form of construction inside of the apartment, you have to get board approval. If you want to sell your shares, the buyer has to be approved by the board. In most co-op’s if you want to rent out your apartment there are stipulations on that. In one of the co-op’s I managed, the by-laws stated if you wanted to rent to someone, they could only live there for 2 years, after which you either have to move back in, leave it empty, or find another tenant.
I worked for a building in the Upper West side whose board rejected a best-selling author (some of their books were turned into movies) who was buying into the co-op with all cash because – drum roll please – they didn’t want to have to deal with paparazzi. Recently – while wearing my realtor hat – I had an all cash deal that was accepted by the seller but rejected by the board because the lady was retired and even though she had enough income with her social security and small pension, they didn’t feel she would be able to pay the monthly maintenance fee and all of her other bills, even though her credit report showed that she actually paid her bills and her debt to income ratio was low.
Working as a building manager for some of these co-op’s, I know that when the board comes together to make a decision on a potential buyer, it is behind closed doors amongst themselves, where not even the property manager is allowed. I have heard the many accusations of discrimination and such from people who have been rejected and can’t really blame them for feeling this way. In fact, one would be naive to believe that that can’t be the case with some of these co-op’s…but sometimes it is. I once had a board president that did things he nor the board would ever approve any other shareholder to do. Especially with structural work in the apartment.
When you choose to buy into a co-op, do your due diligence on the building and do your research on what you are getting into as far as becoming a shareholder. It’s definitely NOT for everyone. It’s great for someone always on the go who can’t be bothered with keeping up on certain bills that would be all lumped up into a monthly maintenance fee such as real estate taxes, utilities, water and sewer, etc. Not to mention not having to worry about doing the lawn or cleaning snow yourself.
But if you like the freedom to live how you want and making your own rules in your space, and no one stopping your money, a co-op is the last place you need to be.
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