[Fredslist] Re: Real Estate 101 The Buildings

[JADLER115 at aol.com]

THE BUILDINGS 
  
____________________________________


There are three types of buildings in New York City: a cooperative, a 
condominium and a rental building. Each of these types has their own rules and 
regulations and it is important to distinguish the differences between them as this 
will influence your decision in choosing your new home          
q COOPERATIVE (CO-OP)
DEFINITION: A cooperative (co-op) is a building which is owned by a 
corporation comprised of the tenant shareholders of the building. Each tenant 
shareholder owns a number of shares in the corporation that are represented by his or 
her apartment. The number of shares depends on many different factors 
pertaining to the apartment itself. The tenant shareholder has the right to occupy the 
apartment as his or her home by holding a proprietary lease to that apartment. 
 
In New York City, approximately 85% of the apartments available for purchase 
are in cooperative buildings, while 15% are in condominiums. Therefore, since 
there is a larger inventory to choose from, prices are more attractive for 
coops, in general. 
DEFINITION: A cooperative (co-op) is a building which is owned by a 
corporation comprised of the tenant shareholders of the building. Each tenant 
shareholder owns a number of shares in the corporation that are represented by his or 
her apartment. The number of shares depends on the apartment size, view and 
location. The tenant shareholder has the right to occupy the apartment as his or 
her home by holding a proprietary lease to that apartment. 
In New York City, approximately 85% of the apartments available for purchase 
are in cooperative buildings, while 15% are in condominiums. Therefore, since 
there is a larger inventory to choose from, prices are more attractive for 
coops, in general. 
TYPE/STYLE OF HOUSING 



qCONDOMINIUM (CONDO)
DEFINITION: A condominium or condo is a building in which the apartment is 
defined as "real property" and is owned by an individual. You, the buyer get a 
deed just as though you were buying a house. Since this is real property, there 
is a separate tax lot for each apartment. Hence, this means you pay your own 
real estate taxes for your property. An owner will also pay common charges on 
a monthly basis which are similar to maintenance in a cooperative. However, 
they will not include real estate taxes since these are paid separately, 
Condominiums, by law, cannot have an underlying mortgage or a reserve fund.   
CONSIDERATIONS: 
1.     Financing the purchase of a condominium apartment is much more 
flexible than in a cooperative. Generally, a buyer can finance up to 90% of the 
purchase price.  
2.     While there is an application process, this is not as formal as in a 
cooperative. The likelihood of rejection is minimal.  
3.     There is greater flexibility in sub-leasing your apartment. This makes 
condominiums the best choice for investment property.  
4.     They are the ideal choice for non-U.S. citizens or for those with 
their assets held outside of the United States given that co-ops are unlikely to 
approve a buyer whose funds are not in the U.S.  
Given that there are fewer condominiums than cooperatives and that they are 
"easier" to purchase, they are generally more expensive than co-ops. 
DEFINITION: A condominium or condo is a building in which the apartment is 
defined as "real property" and is owned by an individual. You, the buyer get a 
deed just as though you were buying a house. Since this is real property, there 
is a separate tax lot for each apartment. Hence, this means you pay your own 
real estate taxes for your property. An owner will also pay common charges on 
a monthly basis which are similar to maintenance in a cooperative. However, 
they will not include real estate taxes since these are paid separately, nor 
will it include the building's mortgage and interest given that a condominium, by 
law, cannot have an underlying mortgage. 
Type/Style of Housing 
Condos are usually hi-rise luxury buildings and are very rarely pre-wars. 
Since condos are relatively new to New York City, they tend to be more recent 
construction. 
CONSIDERATIONS: 
1.     Financing the purchase of a condominium apartment is much more 
flexible than in a cooperative. Generally, a buyer can finance up to 90% of the 
purchase price. 
2.     While there is an application process, this is not as formal as in a 
cooperative. The likelihood of rejection is minimal. 
3.     There is greater flexibility in sub-leasing your apartment. This makes 
condominiums the best choice for investment property. 
4.     They are the ideal choice for non-U.S. citizens or for those with 
their assets held outside of the United States given that co-ops are unlikely to 
approve a buyer whose funds are not in the U.S. 
Given that there are fewer condominiums than cooperatives and that they are 
"easier" to purchase, they are generally more expensive than co-ops. 



q RENTAL
Definition: The building is owned entirely by a landlord, and all of the 
apartments are available for lease, not for sale.  
A rental building that is rent-stabilized is subject to New York City 
guidelines for yearly rental increases. Rent stabilization was established in the 
late 1960's in response to the critical housing shortages and low vacancy rates. 
Rent stabilization sets limits on the amount that owners can raise the rent 
for vacant apartments or renewals of existing leases. The guidelines for yearly 
increases are set in July and become effective every October. In a 
rent-stabilized building the tenant has the right to renew the lease indefinitely and the 
right to sublease the apartment with the Landlord's permission, subject to 
obeying all the terms of the lease.  
A non-stabilized rental building is not subject to any specific guidelines. 
Based on a free market system the rent level is based purely on supply and 
demand. The terms of the lease are established by the landlords' specifications 
and renewal options may be included in the lease.  
Types of Leases  
Rent-Stabilized Lease or Non-Stabilized Lease  
Type/Style of Housing  
Hi-Rise Luxury Buildings, Pre-War Buildings, Elevator Buildings, Brownstones, 
or Walk-ups, rental buildings can be virtually any type of building in 
Manhattan.  
Approval Process  
One to seven business days for leases not requiring board approval and 4 to 6 
weeks for leases which require board approval. 
FUNDS REQUIRED 
First month's rent; one or two month's rent for a security deposit (which is 
refunded upon vacating the apartment, assuming that the apartment is returned 
to the landlord in the same condition in which you received it, and that the 
terms of the lease have not been violated); and funds for a credit check to be 
conducted. The brokerage commission which is usually 15% of one year’s rent is 
due upon lease signing. (If the company is not being billed separately.) 
Definition: The building is owned entirely by a landlord, and all of the 
apartments are available for lease, not for sale. 
A rental building that is rent-stabilized is subject to New York City 
guidelines for yearly rental increases. Rent stabilization was established in the 
late 1960's in response to the critical housing shortages and low vacancy rates. 
Rent stabilization sets limits on the amount that owners can raise the rent 
for vacant apartments or renewals of existing leases. The guidelines for yearly 
increases are set in July and become effective every October. In a 
rent-stabilized building the tenant has the right to renew the lease indefinitely and the 
right to sublease the apartment with the Landlord's permission, subject to 
obeying all the terms of the lease. 
A non-stabilized rental building is not subject to any specific guidelines. 
Based on a free market system the rent level is based purely on supply and 
demand. The terms of the lease are established by the landlords' specifications 
and renewal options may be included in the lease. 
Types of Leases 
Rent-Stabilized Lease or Non-Stabilized Lease 
Type/Style of Housing 
Hi-Rise Luxury Buildings, Pre-War Buildings, Elevator Buildings, Brownstones, 
or Walk-ups, rental buildings can be virtually any type of building in 
Manhattan. 
Approval Process 
One to seven business days for leases not requiring board approval and 4 to 6 
weeks for leases which require board approval. 
FUNDS REQUIRED 
First month's rent; one or two month's rent for a security deposit (which is 
refunded upon vacating the apartment, assuming that the apartment is returned 
to the landlord in the same condition in which you received it, and that the 
terms of the lease have not been violated); and funds for a credit check to be 
conducted. The brokerage commission which is usually 15% of one year’s rent is 
due upon lease signing. (If the company is not being billed separately.) 






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