Chapter 24

Question 1

What do bylaws do?

Answer 1

Form the basis for conducting business. Focus on corporate governance and how the board operates.

Question 2

What are house rules when it comes to co-ops?

Answer 2

Habitations rules.
Day to day activity.
Helps people live together without conflict.
Ex: no baby strollers in the hallway

Question 3

Common charges is to condos, as house rules are to?

Answer 3

Co-ops

Question 4

The owner owns shares in a corporation. What does this describe?

Answer 4

A co-op

Question 5

Which one has to pay a mortgage on their own? Co-op or condo owner?

Answer 5

Condominium

Question 6

Who has Fee Simple ownership (complete ownership)

Answer 6

Condos

Question 7

Proprietary lease = condo or co-op?

Answer 7

Co-op

Question 8

Who has an underlying mortgage?

Answer 8

Co-op

Question 9

Does the IRS tax co-ops the same way as condos and single family homes?

Answer 9

Yes

Question 10

Maintenance fees belong to condos or co-ops?

Answer 10

Co-ops

Question 11

Maintenance fees are to co-ops and blank are to condos.

Answer 11

Common charges

Question 12

Board of directors go to?
Board of managers go to?

Answer 12

Co-op : board of directors
Condos: board of members

Question 13

Is a co-op real property/real estate or are they personal property?

Answer 13

Personal property, chattel, they’re movesble

Question 14

Deed is for co-ops or condos?

Answer 14

Condos because you need fee simple for deeds

Question 15

What are reserves? (Condos)

Answer 15

Money set aside for future expenses

Question 16

Money set aside for future expenses

Answer 16

Reserves

Question 17

What is a letter of intent?

Answer 17

Letter sent out to reserve a unit for possible purchase

Question 18

The habitations rules that govern all shareholders in a co-op are called what?

Answer 18

House rules

Question 19

Is yhe income tax treatment (IRS) for an owner of a co-op apartment the same as an owner of a single family home?

Answer 19

Yes

Question 20

In a co-op, what does each shareholder receive in their ownership?

Answer 20

Stock in a corporation

Question 21

What is the board package in a co-op?

Answer 21

A person interested in purchasing a unit in a co-op submits their personal and financial information to the board of directors with this package

Question 22

Can the board of directors deny you for a co-op?

Answer 22

Yes

Question 23

Unlike a co-op, a condo typically does not have an underlying loan on the land and common elements. Is this true?

Answer 23

Yes

Question 24

Residents of a building who learn that the building they live in may be converted into condos have the opportunity to read about the conversation in

Answer 24

The red herring

Question 25

You can express your interested or make an offer for purchasing a unit in a project being developed to become a CONDO through what?

Answer 25

Letter of intent

Question 26

When I bought a unit for a co-op, I got financing from a bank, which required the board to sign this form acknowledging the bank’s lien interest in the my interest in the shares. What form is this?

Answer 26

Recognition agreement

Question 27

The 80/20 rule that applies to co-ops restricts the level of

Answer 27

Passive income