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November 10, 2007
Maintenance Fees in a Rent-Stabilized Condo Conversion
I'm considering buying an apartment in a pre-war building that has only recently undergone a condo conversion. The building is about 70% (or more) rent-stabilized and the rest of the units are owner-occupied. How does the burden of maintenance costs get spread around in this situation? Do unit owners have to pay for the maintenance costs of the whole building? Is it a bad idea to get into this kind of situation?
Comments
The sponsor of the project (which is probably the current landlord) still owns all of the rent stabilized units, so is obligated to pay the maintenance on those units. The only downside to a lot of renters is that there are only a small number of owners to a greater number of renters. The sponsor will probably have a lot of control over the board. You have to read the prospectus carefully. It could be difficult turning over the rental apartments to owners if the renters have lived there a long time.
Posted by: guest at November 10, 2007 7:41 PM
You may find that the sponsor's interests as a landlord and yours as an owner are not the same. But, obviously, he has an interest in attracting more buyers, so he'll probably be attentive to building issues.
Doesn't sound so bad to me. Just remember that it can take a long time for r/s units to price out to market rates so you'll be living with renters for a long time. That may not be a bad thing but remember they don't have the same interest in the building that you do,.
Posted by: guest at November 11, 2007 2:53 PM
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