Chap 24 Condominiums and Cooperatives

Question 1

___________ may stipulate condo owners cannot paint doors a certain color or must use a specific type of patio furniture.

a. CC&Rs
b. CPS-1
c. Offering plans
d. Recognition agreements

Answer 1

a. CC&Rs

Condominium developers establish and record a declaration of covenants, conditions, and restrictions (CC&Rs), which create a general plan of private restrictions for a subdivision.
CC&Rs might stipulate that owners cannot paint their front doors certain colors cannot install a satellite dish, can only use white holiday lights outside, or can have only a certain type of patio furniture.
The purpose of CC&Rs is to keep the community attractive and uniform, and to protect its market value.
CC&Rs dictate the rules unit owners and their guests are required to follow.

Question 2

A celebrity or well-known person, who is not part of a restricted class protected by anti-discrimination laws could be denied residency if

a. at least two condo owners decide not to grant approval
b. one co-op shareholder decides not to grant approval.
c. the condo board decides not ot approve the application
d. the co-op board decides not to approve the application

Answer 2

d. the co-op board decides not to approve the application.

Another important part of a cooperative purchase is the board package. A board package is presented to the co-op board of directors and often includes financial qualifications, employment verification, letters of reference, and other material requested by the board.

Condo owners and homeowners have no control over who becomes their new neighbor, but co-op boards generally have the ability to vote whether to allow a particular person to buy into the cooperative.

Question 3

The __________ typically pays the condo’s New York City and State Transfer Tax, unless the purchase is made directly from the sponsor.

a. board
b. buyer
c. managing agent
d. seller

Answer 3

d. seller

Seller's Costs:
Attorney Fees
Move-out Deposit
Bank attorney Fee
Various Title Fees and Title Close Fees
New York City Transfer Tax
New York State Transfer Tax

Question 4

According to most condo offering plans, sponsors must give up control of the board of managers/directors after _______year(s) or ___% of the building is sold, whichever comes first.

a. one,10
b. two, 20
c. five, 50
d. ten, 100

Answer 4

c. five, 50

Question 5

A ________ is a property developed for co-ownership, with each co-owner having a separate interest in an individual unit, combined with an undivided interest in the common areas of the property.

a. condominium
b. condop
c. cooperative
d. corporation

Answer 5

a. condominium

Question 6

The ____________ directly oversees the day-to-day activities of a condominium

a. board
b. managing agent
c. principal
d. sponsor

Answer 6

b. managing agent

Question 7

A document agreed to by the lender, the co-op, and the shareholder that recognizes the rights of lenders who finance the shareholder is the

a. alteration agreement
b. offering plan
c. recognition agreement
d. settlement statement

Answer 7

c. recognition agreement

A recognition agreement is an agreement between 3 parties, the lender, the co-op, and the shareholder-that recognizes the rights of lenders who finance the shareholder.

As with condominiums, an offering plan for a co-op is a document provided by the sponsor which offers detailed information regarding the property.

An alteration agreement is a written agreement, signed by the co-op shareholder tenants, before any renovations, modifications, repairs, or alterations can begin.

Settlement Statement-a document prepared by the buyer’s and seller’s attorney or bank representatives that itemizes all expenses and costs paid by the buyer and seller to close the real estate transaction.

Question 8

A proprietary lease is given to a

a. board member.
b. condo owner.
c. co-op shareholder.
d. sponsor

Answer 8

c. co-op shareholder

Stock certificates and proprietary leases (NO DEED)- When a buyer purchases shares in a cooperative, a stock certificate and proprietary lease are issued.

Question 9

An amount of money imposed by the co-op board for the transfer of ownership during the sale for a unit is a

a. flip tax.
b. maintenance fee
c. move-in, move out fee.
d. tax abatement.

Answer 9

a. flip tax

A fee, imposed by the co-op board, for the transfer of ownership during the sale of the unit.

Question 10

Which statement regarding condominium ownership is correct?

a. An owner must take title as joint tenants with other owners.
b. A unit owner has a proprietary lease.
c. a unit owner may not devise the property
d. Unit owners receive a property tax bill.

Answer 10

d. Unit owners receive a property tax bill