Co-op Member Wants to Expand
A member of our Brownstone Co-op wants to expand their living space into the common area of our building. As we consider this matter we need to determine the fair market value of Building space sold to a shareholder for this purpose. We would like to ask if anyone could advise us how to do…
A member of our Brownstone Co-op wants to expand their living space into the common area of our building. As we consider this matter we need to determine the fair market value of Building space sold to a shareholder for this purpose.
We would like to ask if anyone could advise us how to do this, or recommend a lead toward finding out?
Also, any shared experience or advice about our member’s proposal, generally, would be appreciated.
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Thanks very much William and Scarano. Getting the reno. approved and done is straight forward. The issue for us is how to place a value on the exclusive right of entry for the newly created duplex. The plan results in the street level enterance to the building becoming usable by the duplex occupant only. Any experience, idea, or insight?
My office has done this numerous times and it is quite straight foward to do. Filing an application with the DOB is a must as well as an amendment to the offering plan. Followup if you need anything else.
My suggestion would be to run comps in the neighborhood for similar garden/parlor floor duplexes in the neighborhood and take an average of their costs per square foot. The coop should then amend the shareholders proprietary lease in consideration of this cost per square foot times the number of feet being added to the apartment.
Thanks very much for your comments Tom and (the ethical) Anonymous. The complicating aspect of this proposal is that it’s not a basement or roof but part of the Garden Apartment hallway. The Parlor Floor “tenent” wants to buy the Garden Apt. shares, create a duplex w/internal staircase, wall-off that Apartment’s (Garden) hallway from its building entrance into the hallway about 10′, and connect the Garden Apt. to that space by removing part of its wall. This would seal- off the entrance/egress to the building on that level, and of course he would have exclusive use of it, a totally private entrance to the duplex.
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I can tell you you have lots of different pieces to put together here from changes in governing documents/maintenance allocation, building department permits vs. possible violations on the building, possible increase in property taxes with the new improvements and of course all of the physical items mentioned by the 4:47 poster. As far as the value of the space you could look at offerings and recent sales in your area and get a square foot average that might be a good starting point. Calling 3 local brokers for an independent opinion and selecting the middle price or an average of all 3 might be fair. I’m assuming this is basement or roof. If the area is just a closet maybe a simple long term rental agreement for exclusive use would be easier. I do think this may be a great way for a building to raise money for improvements and anticpated replacement of common elements. Good Luck
Remember the common area is a commercial area. The electric rates are higher. Somehow that area would have to become part of the residential coop. So electric would probably have to be rerun. Also what about means of egress? Is the common area the way out of the building? I don’t know if the code would enable such an anex. Unless its just a room in a hallway.