Co-op has no underlying motge, turning Condo

If the market already knows the co-op is converting to condo, the anticipated premium may already be built into the price. Else why wouldn't the seller just wait and sell after conversion?

The conversion itself is expensive, so plan on coughing up for that. (The co-op itself will probably hold onto its cash and transfer it to the condo, as a condo is just as likely as a co-op to need a new boiler or something.)

The conversion may not go through if it can't get enough shareholder votes. They may vote instead to just change the bylaws and adopt looser condo-like rules.

You might want to get in touch with some owners at the few other condos that converted from co-op. The only one I can think of is 30 W 90th -- it went co-op in 1985, then to condo in 1998 -- but that building was an unsold mess to begin with.

A co-op that went cond-op was 61 W 62 St. That was pretty straightforward, letting the co-op own several commercial units and the one big co-op unit. No shares had to change hands, and the co-op could then sell off rather than lease the commercial units.

One of you might already have said this -- I'm too lazy to read all those letters and words and sentences and paragraphs -- but I believe when the coop ceases to be it's consider a sale at current market value, with all the capital gains implications thereof. So you don't get money from selling, but you're stuck with a 15% tax bill if you're profit is above $250K/$500K. Unappealing to many people.

Correct me if I'm wrong.

And in the particular case of buying a coop NOW, not much appreciation, but no exclusion (is that the right word?) either unless the conversion drags on for a couple years more.

I'm too lazy to read all those letters and words and sentences and paragraphs -- I've been drinking all week.

this unit is definitely priced as Co-op (lower) than Condo...

i've heard two stories..

1) conversion is taxable but you get 250/550k gain exclusion

2) non taxable 1031 exchange (those instances seems to be from '80/90's so don't know if law changed)

3) tax exempt if primary residence (would be the case) which would override a lot of the BS i just on nyt/wsj/nymag/sun/etc on this topic

I've also heard that one needs to get a new mortgage because the collateral for the existing loan (coop shares) ceases to exist upon the conversion. I've always wondered why just changing the coop bylaws to function more like a condo (limited sale and sublet approval rights, etc.) isn't a better way to go.

What is the building in question?

I thought that if there is an underlying mortgage on the building each shareholder has to pay off their share of the underlying mortgage. Perhaps that's why someone would need a new mortgage?

I'm reasonably certain that both underlying and individual mortgages would need to be repaid, because they're for a corporation that will cease to exist.

What is the building in question?

Here is what I remember in non technical terms - my building converted from co-op to condo around 2001. The underlying mortgage on the building had been paid off so that made things easy. Individual owners who currently had a mortgage on their apartment had to get a new mortgage.

yes fhsack, as i understand you simply refinance your own personal mortgage. there is no underlying co-op mtge so that's irrelevant.

im assuming you purchased after conversion, meaning you bought a condo?

being that the co-op mtge is usually the largest hurdle since it needs to be paid off first (or added on the loans/backs of shareholders), what's left are legal fees and tax recognition (or non-recognition if 1031 allowed, or 250k exemption/main residence takes effect) are the only things left..

i've heard both cases that property taxes shouldn't go up since assessment won't affect prop taxes in theory, but have been told that in some cases taxes did go up (significantly beyond YOY history or comps)..

it seems there's no standard