Can co-op sponsor rights be transferred?

Probably not, because in making you a Holder of Unsold Shares the sponsor has to vouch for your financials and otherwise get in bed with you. There's no reason the sponsor would want to do that, rather than just sell it to someone who's going to live in it.

There're lot of other wrinkles, so if you're thinking of attempting it you'll need to go over the ramifications with a lawyer.

Realdeal777, think about your question logically for a moment. Every last co-op unit at one point in time was a sponsor unit. Where are they all now? Simple answer -- when they were sold to an individual buyer, they were no longer sponsor units.

A sponsor can sell all remaining sponsor units as a bundle to another sponsor, coupled with all other sponsor rights/responsibilities in the building. That happened to Lincoln Towers, for instance.

Yes sponsor rights can be sold.

My understanding is this: Yes you could purchase the sponsor rights BUT you would not be able to occupy the unit yourself. You would only be able to rent it out. If you were to decide at some point to occupy the apartment the sponsor rights would become null.

And most people don't want to do that because it often means a negative cash-flow: the unsold units are often rent-controlled or -stabilized, and the legal rent is often below the maintenance, and given that those units can be "inherited" by relatives, if you buy the unsold shares you run a very high risk of not being able to recover your investment for many years to come.

Steve--if the unit is vacant it can be brought up to market rate, no?

Yes, and that's what the OP is looking for. Again, the co-op is going to let you enjoy the benefits of HUS status unless you comply with the NYS Attorney General's requirements:

1. Obtain a designation as Holder of Unsold Shares from the sponsor. It is not sufficient for subsequent transferees of the sponsor to obtain the designation from their immediate seller, it must be procured from the original sponsor. Under the regulations, the sponsor may only designate financially responsible persons as Holders;

2. Obtain a written guarantee of payment by the sponsor to the co-op of all financial obligations of the Holder of Unsold Shares. This provision of financial security is the quid pro quo for allowing an investor to enjoy the privileges and immunities described above indefinitely;

3. Adhere to the escrow and trust fund provisions of the General Business Law;

4. Register with the Department of State as a broker-dealer;

5. File regular updating amendments to the Offering Plan.

If you think a co-op is going to let you sublet to anyone you want, resell without approval, etc., without your jumping through those hoops, you'd best think again.

"if the unit is vacant it can be brought up to market rate"

At one point they were subject to vacancy decontrol:

http://cooperator.com/articles/565/1/Regulated-Renters-Rights/Page1.html

But that changed in 2002:

http://cooperator.com/articles/745/1/The-Jennifer-Realty-Case/Page1.html

The question now is whether or not renting out decontrolled apartments would prevent the co-op from being a "viable co-op." I'm not sure that that has ever been decided, but given the recent changes in underwriting rules where specific buildings are approved for underwriting or not depending on the percentage of owner / occupiers they have, I would say that pretty much every sponsor would sell the units as they become available.

That last sentence, though, is just an opinion.

Thanks guys, helps a ton!

How can the board kick out or. Force the sponsor to sell the remaining units that they are renting and not willing to sell or get out ? What can the board do or steps they need to take in order to get them out ! They are hurting the financial and quality of living in the building because of this.