Combining Two Units - Advice

This is a complicated situation - you need an attorney, not advice from the [mostly] clowns that lurk on this site. If Noah or some other knowledgeable source happens upon this, you may get lucky...

Never to late to amend. The sponsor is being lazy and wants to leave you with the open ends. DOB is backed up. Good luck if you go through with it.

You will only be able to accomplish this now -- trying to do it later and get the approval of what probably requires at least 2/3 of the unit owners consent without paying a ransom will be difficult. Also, there are different concepts involved in combining the units. You can get a C.O. for the combined units without amending the declaration. The lender may insist on a combined c.o. (mine did), but not the amended declaration. Amending the declaration is not inexpensive, and the sponsor may try to push some of those costs on you. Make sure it is spelled out in the contract.

As OT said, the rest of the issues you raise are complicated, and the answer is not obvious. If the units are combined, will you be allocated more of the common interests (and thus pay more maintenance)? Taxes may or may not be higher. Financing could but need not be an issue. One thing you will want is to combine the utilities -- they are more expensive separate. However, since all of these things are spinning around your head, you need to consider whether they also will deter potential buyers when it comes time to sell.

In this market, combining two apartments is the only thing that can make you happy? Of course you need your lawyer's advice.

For whatever reason I have seen a lot of combos lately--including one the owner never actually bothered to combine, leaving the mind-bending situation of selling two independent apartments that are actually one apartment....apartment and guest house? I ultimately decided I didn't want to get involved in that one at all.

The more I see of combos the more I think combining is a difficult and expensive proposition to do well. If you have enough money anything is doable, but it just seems a lot of people have trouble ending up with a good layout. And it doesn't seem to be much of a bargain, either....somebody will set me straight I'm sure if my sample in not representative.

It's not too late to amend the condo declaration and do whatever the city needs. Developers do it all the time. Sounds as if the developer just doesn't want to bother, and figures they're doing you a favor by selling to you. I'd walk, since there's so much else out there.

(i) paying a higher transfer tax rate on a resale, Yes something like .02625 vs .01875 and is significant.

(ii) not having the City of New York approve the combination (which will certainly be raised when the Units are resold) You will have to do this yourself.

(iii) potential problems with a lender who may want to see legal combination of the Units as a condition of making the loan; Lender will want 2 loans, and one property classified as an investment property. You might purchase the smaller unit in cash and take a larger loan on the unit you will mark as your primary? All depends on your situation of course.

(iv) paying higher real estate taxes than would otherwise be payable if it was 1 Unit. No, your taxes will be the same - as they are determined by the % common interest in the building which would not change, right?

I would tell the sponsor to amend or you walk. Of course, the sponsor probably needs architectural drawings, etc, etc, etc, approval, etc.

As an architect I've done this for several clients. The C of O does not have to be amended when combining apts, only when splitting them up, because you're adding to the unit total. This is a 2 step process. First, you have to have a Type 2 alteration done through the DOB with an architect. This formalizes the physical connection of the units. Second, your architect prepares new condo drawings and an attorney amends the declaration for submittal to the Dept of Finance. This formalizes the combination of the 2 tax lots and will eventually show on Acris. The board usually insists on it's own attorney amending the dec and this process can take a while because, typically, a majority of owners has to approve the combo. My clients have gone through this process only when they've tried to sell and their buyer's lender has balked at the double tax lot/deed issue. This will be an expensive and time consuming project so you would be much better off getting the sponsor to do this since he already has the architects and attorneys and also because he controls the board. Maybe offer to pay some of the cost and definitely set a time limit.

MMC285, you might find this old thread useful:

http://streeteasy.com/nyc/talk/discussion/8476-does-joining-apartments-ever-make-sense

thanks so much to everyone for your help!!!

Can anyone provide the costs of combining? I know a lot depends on the types of kitchen/bathrooms, etc but in general, if you were to combine a 2 bedrm condo with a 1 bedrm condo in a new construction building, how much would that run? We talking in the $50-$75k range or is it more like $150-200k range when you add in lawyer, architect, contractor fees??

I've done combos in a co-op, but from what I've read about condos, you are MUCH, MUCH better off getting the sponsor to do combine tax lots. In terms of getting a mtge, it simplifies things as well, because some banks (like ours) wanted 10k in escrow pending removal of kitchen. IMO, it's easiest to get the sponsor to at least remove one connecting wall, remove kitchen, cap gas before closing.

Costs shouldn't be more than 50-75k, but you will have to do a lot more if the sponsor doesn't do it.

Also, where you have the sponsor remove the connecting wall, get them to patch the floor.

I should have asked - what kind of changes are you planning to make to the floorplan? Is it just a question of removing one wall & one bathroom? Sometimes, you have to spend a lot more than 50k to make the floorplan work.

nyc10023. I've already closed on the 2bedroom. I would have to buy the neighboring 1 bedroom from the resident owner, not the sponsor.think big changes would be needed on the floorplan bc the neighboring 1 bed's living room is adjacent to the 2 bed's master bed. not a simple "cut a door in the wall" project.

Ah, sorry downtown, I was confusing you with the original poster. So much depends on how fussy your condo board is with contractors, architects, etc. And how much responsibility you are willing to take with the project. My combo was similar - I turned the old master and small 2nd bedroom of a 3br into living room and dining room, and the adjacent studio into new master.

If you think about how much things should cost (i.e. how much time is involved in tearing out an old kitchen), you will find that labor varies so much depending on how the contractor runs his/her business.