I saw this today in the Real Deal/NY Post talking about a potential foreclosure at Heath Ledger's SoHo building:
http://www.nypost.com/seven/06212009/news/nationalnews/ax_falling_on_heaths_old_haunt_175243.htm
It appears from the article that one guy owns most of the units in the building AND owns the company that made some type of loan to the building. There is also at least one other owner in the building that owns the $10 mil PH unit. The article says that the building is going to default on it's loan, which would put the "bank" (e.g. the majority owner in the building) in control of all of the building's units (including the minority owned PH).
I guess my question is this - if your condo building defaults on a loan, does the bank own your unit? I always thought no, but I guess that's not the case...or am I reading this wrong? Do most condo buildings (assuming the sponsor has sold all of the units) typically hold substantial loans?
Thanks!
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Response by notadmin
over 17 years ago
Posts: 3835
Member since: Jul 2008
i thought it was the not-so-anorexic olsen twin's condo, not ledger's. that's all i can add. love to know what the FC process means to owners & renters too.
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Response by MatWith1T
over 17 years ago
Posts: 66
Member since: Mar 2009
The article doesn't really give a clear picture of the ownership structure - my assumption from reading that article was that the litigant owned a minority stake of the COMPANY that owned the mortgage, but did not actually own any part of the building.
If he actually owned the condos, rather than a stake in a company that owned the condos, than a foreclosure by the building sponsor would not affect his ownership.
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Response by front_porch
over 17 years ago
Posts: 5325
Member since: Mar 2008
? It's not a co-op; there are no Aztechs.
You own your unit and the condo owner owns the building. If he (let's make it a him for hypothetical purposes) defaults on his loan, you own your unit and the bank owns the building.
does that help?
ali r.
{downtown broker}
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Response by PMG
over 17 years ago
Posts: 1322
Member since: Jan 2008
Condo's are real property so each unit is a separate real estate parcel, which in new york city means individual block and lot numbers. There is no such thing as a "building" with respect to condo ownership, because the building is divided into separate units that are owned individually. A condo building's "common elements" are owned on a percentage basis by the unit owners, who own title to their individual units. There is no title to the condo building or the common elements, which are never transferred or taxed as property.
If there is a foreclosure on this BUILDING, it must be a co-op, and the co-op shareholders lose their ownership interest, and become tenants in the building. If this building is in fact a condo, then the news report is wrong, and it is merely a portion of the building that is being foreclosed,--perhaps, the sponsor's units. A condo unit owner can only lose their ownership interest if they don't pay their personal mortgage or property taxes.
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Response by PMG
over 17 years ago
Posts: 1322
Member since: Jan 2008
And for the record, if a building has a mortgage, it is owned outright or is a co-op. Banks will not issue a mortgage on a condo building, although they do lend to sponsors and developers. As sponsors or developers sell condo units, the lender demands partial repayment and releases the lien on the sold condo units.
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Response by front_porch
over 17 years ago
Posts: 5325
Member since: Mar 2008
^^ sorry "PMG" when I mean "building" I am assuming that the sponsor's remaining interest includes storefront parcels, and it's those units that I think of as the "building"-- but your explanation way clearer than mine -- nice job.
ali r.
{downtown broker}
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Response by 30yrs_RE_20_in_REO
over 17 years ago
Posts: 9913
Member since: Mar 2009
I think you guys missed the memo whereby condominium associations were granted the right to take out loans a few years back.
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Response by 30yrs_RE_20_in_REO
over 17 years ago
Posts: 9913
Member since: Mar 2009
OK, so from a very breif look, here's what it looks like to me:
The building is neither a Coop nor Condo. It's just a "regular"/"rental" building that is a PARTNERSHIP. Ledger rented one of the units. Junia Neiva who lives in the penthouse (presumably under some sort of partnership agreement) is claiming that the majority partner, Donald Burns, has purposely kept the rest of the units vacant in order to make it impossible for the partnership to pay it's debt.
"The building at 421 Broome Street was sold for $4.8 million in 1999 by Ho Hwa Properties Inc. to Red Tulip, L.L.C. Calls to a phone number listed for Junia Hissa Neiva, a Brazilian painter who is listed as an owner of Red Tulip and of the building, went to an answering machine that was full and could not accept new messages."
i thought it was the not-so-anorexic olsen twin's condo, not ledger's. that's all i can add. love to know what the FC process means to owners & renters too.
The article doesn't really give a clear picture of the ownership structure - my assumption from reading that article was that the litigant owned a minority stake of the COMPANY that owned the mortgage, but did not actually own any part of the building.
If he actually owned the condos, rather than a stake in a company that owned the condos, than a foreclosure by the building sponsor would not affect his ownership.
? It's not a co-op; there are no Aztechs.
You own your unit and the condo owner owns the building. If he (let's make it a him for hypothetical purposes) defaults on his loan, you own your unit and the bank owns the building.
does that help?
ali r.
{downtown broker}
Condo's are real property so each unit is a separate real estate parcel, which in new york city means individual block and lot numbers. There is no such thing as a "building" with respect to condo ownership, because the building is divided into separate units that are owned individually. A condo building's "common elements" are owned on a percentage basis by the unit owners, who own title to their individual units. There is no title to the condo building or the common elements, which are never transferred or taxed as property.
If there is a foreclosure on this BUILDING, it must be a co-op, and the co-op shareholders lose their ownership interest, and become tenants in the building. If this building is in fact a condo, then the news report is wrong, and it is merely a portion of the building that is being foreclosed,--perhaps, the sponsor's units. A condo unit owner can only lose their ownership interest if they don't pay their personal mortgage or property taxes.
And for the record, if a building has a mortgage, it is owned outright or is a co-op. Banks will not issue a mortgage on a condo building, although they do lend to sponsors and developers. As sponsors or developers sell condo units, the lender demands partial repayment and releases the lien on the sold condo units.
^^ sorry "PMG" when I mean "building" I am assuming that the sponsor's remaining interest includes storefront parcels, and it's those units that I think of as the "building"-- but your explanation way clearer than mine -- nice job.
ali r.
{downtown broker}
I think you guys missed the memo whereby condominium associations were granted the right to take out loans a few years back.
OK, so from a very breif look, here's what it looks like to me:
The building is neither a Coop nor Condo. It's just a "regular"/"rental" building that is a PARTNERSHIP. Ledger rented one of the units. Junia Neiva who lives in the penthouse (presumably under some sort of partnership agreement) is claiming that the majority partner, Donald Burns, has purposely kept the rest of the units vacant in order to make it impossible for the partnership to pay it's debt.
January 22, 2008, 4:42 pm
The Death of Heath Ledger
http://cityroom.blogs.nytimes.com/2008/01/22/actor-heath-ledger-is-found-dead/
"The building at 421 Broome Street was sold for $4.8 million in 1999 by Ho Hwa Properties Inc. to Red Tulip, L.L.C. Calls to a phone number listed for Junia Hissa Neiva, a Brazilian painter who is listed as an owner of Red Tulip and of the building, went to an answering machine that was full and could not accept new messages."
The foreclosure case:
http://www.4balance.co.il/webupload/files/AmericanCaseExamples/b961354f-d951-4e2e-bc1a-13edb51eb6c2.html
On further look, it doesn't even appear that Burns is the majority partner, but there's a lot of smoke and mirrors in this one.
although:
http://www.corporationwiki.com/Florida/Palm-Beach/419-broome-street-llc-2073781.aspx
more smoke and mirror?s