Leasing Roof Rights

Hello,
Our condo board is willing to lease to us the roof rights for the roof right above our top floor condo.  We are about to enter the negotiating phase, but we have no idea how much we should pay for the rights.  We can’t buy them outright, so we’ll be signing a 99 year lease.  It’s roughly 800 square feet.  I’ve been told that to buy common space one would pay 15% of the value of the condo.  So if a condo’s value is $1,000 per square foot, then to pay for the common space one would pay $150 per square foot.  But this isn’t a purchase.  It’s a lease.  We could either pay a large sum upfront or a monthly fee.  Any idea out there of what we should expect to pay for this lease? Or how we could best enter the negotiation? Thanks!

mindts

in Decks and Porches 13 years and 4 months ago

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ilovestoops | 13 years and 4 months ago

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In a condo, each owner owns a percentage of common elements.  If some common element is “sold”, then everyone’s percentage ownership would have to change, not just the percentage of the person buying the common element.  Coops sell common areas and condos lease them in an arrangement roughly analogous to a coop’s proprietary lease.  In coops, shares are allocated for the purchased common area and maintenance fees are charged based on share allocation.  In condos, a monthly fee,  like common charges, is charged by the association. Some buildings have guidelines for determining the upfront fee for the common area lease and the monthly charges but most rely on an appraisal.  The 15% figure you were told may have been used in one building, or it may be a guideline established for your building, but there really isn’t a standard percentage because there are so many factors that could affect how a particular common area could be valued.

deancollins | 13 years and 4 months ago

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I’d be still trying for outright ownership, its only going to make it more complicated to sell in the future.

deancollins | 13 years and 4 months ago

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why cant you buy it outright?

Seems like it makes more sense to purchase than rent as its goign to limit your ability to resell if you are burdening any future purchasers of your apartment to thier share of a 99 year lease. Please explain why the co-op thinks they can sell to you?

elbow | 13 years and 4 months ago

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We pay 50% of a low market rate per square foot for the roofs we rent. So if the low going rate for an apartment rental in your area is, say, $50/sf/yr, you’d pay $25/sf/yr for renting the roof. Ultimately, however, the rate would be whatever the parties agree to. It’s a very small market, right? Who else is going to pffer to rent your roof?