Co-Op Sponsor Apartment Maximum Sale Price Set By Share Price....
Started by thetraveler
almost 16 years ago
Posts: 10
Member since: Sep 2008
Discussion about
All, Five years ago a friend bought a co-op sponsor unit in my old building and his real estate lawyer discovered, that when buying in a co-op from the sponsor, the law says they are not allowed to sell the unit for higher than the number of shares times the current offering plan most recent stated maximum share value. So in his case 124 shares * $3,500 per, or $434k. Since this was $8k below his... [more]
All,
Five years ago a friend bought a co-op sponsor unit in my old building and his real estate lawyer discovered, that when buying in a co-op from the sponsor, the law says they are not allowed to sell the unit for higher than the number of shares times the current offering plan most recent stated maximum share value. So in his case 124 shares * $3,500 per, or $434k. Since this was $8k below his offer/their asking he was able to force them to adjust to the max by law.
Problem is I am in the same boat buying a co-op sponsor unit and his lawyer is retired. Does this rule sound familiar to anyone and have any direction on where it can be referenced (since the sponsor currently wants more than $30k more than max share value, trying to have this help my deal). Any leads would be appreciated. Cheers!
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Response by ab_11218
almost 16 years ago
Posts: 2017
Member since: May 2009
i've dealt with many sponsors and never heard of this. typically, an offering plan stipulates the time period that the offer is good for. i would love to buy a coop now at 1985-7 offering prices.
if you can be more specific as to the timeframe of formation of the coop, what % is sold and is there a mass sale by the sponsor, that would make the answers a little easier.
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Response by thetraveler
almost 16 years ago
Posts: 10
Member since: Sep 2008
Too be clear, the law / code that I am looking for / referencing defines that any co-op is required to not exceed the max current share value for the sponsor sale. One unit or multiple, it's irrelevant. If you have ever lived in a co-op you will have at some point received notices about an "increase in per share value" over the years. Most of the time it coincides with an updated appraisal of the building or to reflect increased fair market value on the books (for insurance and real estate taxes). Since this ammendment has to be filed with the states attorney's office, the max a sponsor can sell for is that updated "full share value." Or close to something like that (not a lawyer). Now if I can just find the specific referenced NY State code of business conduct or law he used.
Typing on iPhone in a taxi from JFK so excuse typos.
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Response by NWT
almost 16 years ago
Posts: 6643
Member since: Sep 2008
thetraveler, maybe you're thinking of some particular kind of co-op, like HDFC or something. A regular co-op's sponsor can sell to outsiders at whatever prices it wants, and to insiders at a fixed price only for a given period of time. That fixed price to insiders goes up over time, and is specified in at-least-yearly amendments to the offering plan. The managing agent will have the whole stack of them filed since conversion for you to go over.
i've dealt with many sponsors and never heard of this. typically, an offering plan stipulates the time period that the offer is good for. i would love to buy a coop now at 1985-7 offering prices.
if you can be more specific as to the timeframe of formation of the coop, what % is sold and is there a mass sale by the sponsor, that would make the answers a little easier.
Too be clear, the law / code that I am looking for / referencing defines that any co-op is required to not exceed the max current share value for the sponsor sale. One unit or multiple, it's irrelevant. If you have ever lived in a co-op you will have at some point received notices about an "increase in per share value" over the years. Most of the time it coincides with an updated appraisal of the building or to reflect increased fair market value on the books (for insurance and real estate taxes). Since this ammendment has to be filed with the states attorney's office, the max a sponsor can sell for is that updated "full share value." Or close to something like that (not a lawyer). Now if I can just find the specific referenced NY State code of business conduct or law he used.
Typing on iPhone in a taxi from JFK so excuse typos.
thetraveler, maybe you're thinking of some particular kind of co-op, like HDFC or something. A regular co-op's sponsor can sell to outsiders at whatever prices it wants, and to insiders at a fixed price only for a given period of time. That fixed price to insiders goes up over time, and is specified in at-least-yearly amendments to the offering plan. The managing agent will have the whole stack of them filed since conversion for you to go over.