Chapter 15

Question 1

Cooperative

Answer 1

A dwelling unit owned by a corporation in which an owner owns stock commensurate with the value of his or her apartment compared to the value of the building as a whole. The stockholder has a proprietary lease to the apartment.

Question 2

Share Loan

Answer 2

A loan in which shares of stock are used as collateral. Typically found in cooperative purchases.

Question 3

Proprietary Lease

Answer 3

A lease given by a corporation to another. It is often used in a co-op context, where the owner is given a certain number of shares in the co-op, along with a proprietary lease for one of the residences in the building.

Question 4

Maintenance

Answer 4

Monthly payments by a shareholder to a cooperative corporation.

Question 5

Sponsor

Answer 5

The developer or owner organizing and offering for sale a condominium or cooperative development.

Question 6

Board Package

Answer 6

A series of documents submitted for the review by a cooperative board.

Question 7

Alteration Agreement

Answer 7

Describes the terms under which the cooperative gives permission to a shareholder before making any changes or improvements to the unit the shareholder occupies.

Question 8

Condominium

Answer 8

A form of fee simple ownership of part of a structure having multiple units. Owners have title to their own units plus a share of the common elements.

Question 9

Condop

Answer 9

A residential establishment that includes both a condominium and cooperative ownership structures. Typically the condop refers to the residential portion of a building which is treated as a single condominium unit owned through a cooperative-ownership structure.

Question 10

By-laws

Answer 10

The owner’s rights and obligations for a condominium.

Question 11

Common Elements

Answer 11

Also known as Common Areas; refers to the spaces in a building shared by residents of the building. Common areas include lobbies, corridors, stairs, elevators, etc.

Question 12

Common Elements

Answer 12

Also known as Common Areas; refers to the spaces in a building shared by residents of the building. Common areas include lobbies, corridors, stairs, elevators, etc.

Question 12

Covenants, Conditions and Restrictions (CCRs)

Answer 12

Limitations and rules on a group of homes by a builder, developer, neighborhood association and/or homeowner associations; when living in a building, a buyer gives up certain freedoms to be part of a shared community.

Question 13

Declaration

Answer 13

Also known as a Master Deed, is a fundamental document that establishes the existence of and further governs the use and maintenance of a condominium property.

Question 14

House Rules

Answer 14

Rules in a cooperative that cover common issues including garbage disposal, maintenance, noise, and conflict resolution.

Question 15

Letter of Intent (LOI)

Answer 15

Generally an agreement to agree. It outlines the terms between parties who have not formalized an agreement into a contract. LOIs are generally not binding and unenforceable.

Question 16

Maintenance

Answer 16

Monthly payments by a shareholder to a cooperative corporation.

Question 17

Offering Statement

Answer 17

A document prepared by the attorneys representing the builders of a newly constructed condominium building. The statement includes information about the number and type of units in the building, the Homeowners Association rights and duties to owners, and a list of any easements or liens affecting the title of the building. In most cases, buyers looking to purchase a new construction condo get the Offering Statement from their agent before they make an offer on a unit.

Question 18

Recognition Agreement

Answer 18

The agreement between the cooperative building and the bank lending money for purchase of shares of stock in the cooperative.

Question 19

Flip Tax

Answer 19

A fee paid by a seller or buyer on a housing co-op transaction typically in New York City. It is not a tax, and not deductible as a property tax. It is a transfer fee payable upon the sale of an apartment to the co-op.

Question 20

Flipping

Answer 20

A term used for buying a home and then turning around and reselling it for a profit.