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Looking at coops. Saw a building in which most of the apartments in the A line are 850 square feet. One apartment for some reason is smaller and has a different layout. It's about 700 square feet. Yet the maintenance is almost identical to the apartments above and below which are 150 square feet bigger.
The seller is trying to price this similar to the bigger apartments. If there was an error made when the maintenance was first calculated would the current owner be entitled to a refund of the amount overpaid?
Would you buy the apartment first and keep quiet and then challenge the maintenance cost?
No. First and foremost, if I were really interested in the apartment I would call the managing agent to verify the correct maintenance before signing contracts. Regardless, your attorney, in doing their due diligence, would/should also verify the correct number of shares for the apartment as well as the correct monthly maintenance prior to your signing.
so the seller has a smaller unit with same maintenance and tries to sell for same price as larger units. what's the point of even looking at it? the seller has no clue, his broker has no clue, and they are trying to find someone to buy this place who has no clue.
unfortunately, it seems that you have a clue.... that's too bad for them.
> and then challenge the maintenance cost?
I don't think you'd be successful at challenging the maintenance fees before or after you purchase, just because it is smaller than thier immediate comps. Although maintenance fees generally tend to correlate with the unit size and the height, at the end of the day, they ONLY have to correspond to the number of shares. Remember, you aren't buying an apartment when you buy a coop unit; you are buying shares!
Agreed - if they fixed the shares of this apartment matching the others, then square footage is moot. Perhaps this is a "better" layout? More closets? Window? Bottom line, it is up to the owner to challenge the share distribution / maintenance costs. You are a prospective buyer. Ultimately, the price will be determined by what a buyer is willing to pay for the apartment, regardless of maintenance costs.
maintenance is based off underlying shares in the coop. The shady thing about coops is that regardless of your unit size and location within the building, the amount of shares was underwritten at the beginning of the formation of the coop. This is often skewed and I've personally seen units in the same line with significant difference in shares / unit, thus having certain units pay more in maintenance on a monthly basis even though the difference in units is negligible.
That's why you look at the offering plan. Every co-op has a share-allocation pattern. E.g., in mine the one-bedroom lines increase by one share per floor, and the two bedrooms by two shares per floor. (Less than 1% in all cases.)
You'll hardly ever see anomalies, because when the co-op converted, the purchasing tenants paid a fixed price per share. They would of course have an interest in verifying that the allocation made sense, and would've squawked if they saw anybody getting a deal or were screwed themselves.
By the same token, shareholders will never vote to re-allocate shares, since reducing anybody's would mean everybody else's maintenance increases.
Best of all is when share allocation reflects a great view ... and then the view is subsequently built out of existence at a nearby lot. No change in share allocation, sorry!