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April 3, 2008
Can a unit remain a sponsor unit upon resale?
I am currently in negotiations to purchase what is claimed to be a sponsor unit in a co-op. Thing is, the original owner, who never lived there, sold it to the current owner, who has also never lived there. I'm being told by the broker that because it remained an investment that has never been lived in by the owner, it also remained a sponsor unit. But I'm also hearing that apartments lose their sponsor status after the first sale. Anyone know what the skivvy is on the apartment's status? Thanks for the help.
Comments
i'm pretty sure the unit loses it's title of sponsorship after the first sale directly from the sponsor.. occupying it has nothing to do with anything. i'd double check. you probably need coop approval for the purchase.
Posted by: guest at April 3, 2008 12:23 PM
it's not a sponsor unit if the sponsor isn't selling it to you.
on the downside: you have to go thru board process
on the upside: you aren't responsible for the transfer taxes
Posted by: guest at April 3, 2008 1:22 PM
Sounds eerily familiar to my co-op. In the case of my coop I have told the broker repeatedly that this is NOT the case. When the sponsor sells the unit to any person (regardless of whether they live there or not), it loses its sponsor status.
Good luck with negotiations, but know that you will not own a sponsor unit (since you are not a sponsor)
Posted by: guest at April 3, 2008 1:28 PM
Not true. The exact rules are specified in the coop offering plan, which you have to read very carefully. Usu they are handled as 'unsold shares', and don't turn into regular shares until after the apartment becomes physically available (e.g. the R/S tenant moves out)
Posted by: guest at April 3, 2008 1:48 PM
Make it 5-0: it's not a sponsor unit (unless there is something unique in the by-laws that state otherwise with regard to owner occupancy)
Posted by: guest at April 3, 2008 3:37 PM
1:48 is correct - the co-op offering plan and by-laws often provide that a purchaser of shares for investment purposes is a "holder of unsold shares" and treated the same as a sponsor. Your attorney should read the co-op documents.
Posted by: guest at April 3, 2008 4:56 PM
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