Buying Parking Spot in a Co-op
I’m interested in purchasing a building parking spot from one of my co-op neighbors. The bylaws are silent on transactions like this. Anyone know what is involved (ie do new shares need to be issued? do we need board consent? any idea of transaction costs and can one attorney handle for both sides?) I just…
I’m interested in purchasing a building parking spot from one of my co-op neighbors. The bylaws are silent on transactions like this. Anyone know what is involved (ie do new shares need to be issued? do we need board consent? any idea of transaction costs and can one attorney handle for both sides?) I just don’t know where to begin. Thank you
Interesting thing about parking spaces. Every building is different. My building is a condo and we have residential units and parking units, each with a stated percentage of entitlement to common space and parking space owners have separate titles and pay separate taxes. Banks won’t finance the parking space so if you need a loan for 80%, it’s only the residential unit value they consider, but they take the mortgage over both pieces of property. We haven’t had any resales of parking spaces, so I have no idea how it’s going to be handled, but the board would not allow a sale to someone who is not a residential-unit owner, it would exercise its right to acquire.
In a co-op all transfers of shares must be approved by the board. It is possible to divide a shareholding and rewrite the proprietary lease, people combine apartments all the time, and the rules that allow combinations usually allow sub-dvision, but only with the consent of the Board. Boards are required to act in the best interests of the co-op corporation as a whole, any self-dealing is prohibited and an injured party can take legal action if they have evidence of self-dealing by a board member (evidence that will stand up in court and be sufficient to overcome the business judgment rule). Clearly the OP’s first port of call should be the board. The board will have to approve either a transfer of shares or a sub-letting arrangement. If the board has established a procedure for such sales, like requiring the sale at an agreed price to the next shareholder on a waiting list (which would be covered by the business judgment rule) then they are unlikely to approve any transaction which seeks to circumvent those procedures.
the parking issue will be very clear as soon as you ask .. anyone. board member, seller, whoever. it may be owned outright as a separate unit and may have share allocated or not. this is done a lot with parking spots, cabanas, storage areas.. many times things that were added after conversion. anyway, it could be any unique situation that will be easy to understand when you ask anyone who knows what’s what.
Can we stick to the parking space here? There’s a whole thread for bickering about boiler room access!
WRT to parking spaces … there must be something in writing somewhere, or what are you buying? The guy says that’s his parking lot and you can have it for a fee?
If it is bundled with his unit now, it probably is part of the collateral for his mortgage (or coop loan. semantics.) So he’d have to involve the bank in the transaction.
If it isn’t bundled with his unit but came off a waiting list, it may not be his to sell.
smeyer–the 80-20 rule has been loosened up some.
smeyer418 is it really a buyers market in nyc? or is it just stabilized.
per Miller Samuel average Manhattan co-op price per square foot is up on a quarterly basis and a yoy basis. same for condos in Brooklyn (co-ops are not quoted on a psf basis).
and if you refused the inspector a right to look at it, they may decide the building has something to hide. Given that it is currently a buyers market, your attempting to sell shareholders must really love you.
The reason for the inspection is to see if you will be needing a boiler soon and if you have adequate reserves(same thing as looking at the roof) no one wants to buy into a coop and get a special assessment for a new roof or new boiler a month later.
The other issue with selling off the parking space is IRS rules that prohibit coops from getting non-shareholder income above a certain percentage….
I love to chime in on the boiler room issue!
I can’t imagine — or have ever heard of — an applicant telling the board to change the boiler or renovate the lobby. But it’s their right to inspect the building imo. Minard, by your thinking you wouldn’t let applicants look at financials since you don’t want to hear their opinions on how the debt is handled. That’s not why people do these things.
It’s funny tho — your assumption that this involves the board in a central way is one I’ve found on my own board. A building inspection helps buyers and sellers hammer out a price. It has nothing really to do with the board. How many times have I said that in my board meetings!
denton,
1. if the apartment and the parking space are part of the same share allocation then they are stuck together and can no more be split apart than a bedroom or kitchen. That’s different, in that case, a sublet of the space would be the best bet.
2. I would not let a prospective buyer look at the boiler any more than a shareholder. those rooms are off limits in my building except to qualified personnel. If a prospective buyer tells the board to change the boiler or upgrade the electrical or redecorate the lobby, that applicant would be seen as a dangerous flake and would most likely never be approved.
3.in terms of leaks, if a leak is the result of a pipe burst in the wall or ceiling, it is the co-ops responsibility. if it is because a shareholder forgot to watch the tub and it flows over, it is the shareholder’s insurance responsibility.
And to answer Manhattanite’s question, yes I have found that most people willing to dedicate time and energy to serving on their building’s board largely do it for selfless reasons, there are the exceptions but the good people on most boards more than compensate for the bad ones, and most importantly, unlike North Korea, there are real annual elections in a co-op.
The annuitized value of a parking space is approximately $100,000 (I’m figuring one that would rent for $400/month). Keep that in mind when you’re exploring how they are allocated and assessed.
Monsieur Lefaver, of course coop boards are wonderful volunteers! But tell me you find them universally selfless! Please.