Condominiums and Cooperatives

Question 1

Condominiums are considered…

Answer 1

real property.

Question 2

Condo owners receive a…

Answer 2

deed a closing.

Question 3

Condominiums are considered…

Answer 3

freehold estates.

Question 4

For tax purposes, a condominium is classified as a…

Answer 4

residence.

Question 5

Cooperatives are NOT considered…

Answer 5

real property.

Question 6

The owner of a co-op receives a…

Answer 6

proprietary lease at closing.

Question 7

A proprietary lease is considered…

Answer 7

personal property.

Question 8

Co-ops are considered a…

Answer 8

leasehold estate.

Question 9

The leasehold estate gives the right to…

Answer 9

possession of an apartment and use of the common areas.

Question 10

A condop is a building that includes…

Answer 10

condominium and cooperative ownership in the same structure.

In other words, the building is part condo, part co-op.

Question 11

The Board of Directors manages…

Answer 11

a cooperative.

The Board oversees the maintenance, finances, and policy decisions of the cooperative.

Question 12

House Rules are rules in a cooperative that cover common issues including…

Answer 12

garbage disposal, maintenance, noise, and conflict resolution.

Remember: House rules are associated with cooperatives, while by-laws are associated with condominiums.

Question 13

House rules are generally more detailed than items in the proprietary lease and deal with the …

Answer 13

day-to-day behavior of tenants and general operations.

Question 14

The by-laws are the…

Answer 14

owner’s rights and obligations for a condominium.

Remember: House rules are associated with cooperatives, while by-laws are associated with condominiums.

Question 15

The by-laws may include:

Answer 15

• The powers and duties of the Board of Managers
• Sublet provisions
• Restrictions on the use of units and common spaces
• Pet restrictions

Remember: House rules are associated with cooperatives, while by-laws are associated with condominiums.

Question 16

If a prospective buyer is looking to purchase a unit in a cooperative, the Board of Directors will…

Answer 16

most likely want the buyer to submit a board package.

Question 17

The board package includes mostly…

Answer 17

financial documents.

Question 18

The Board of Directors will review the buyer’s board package and use it help determine if they will…

Answer 18

approve the buyer’s application or not. If the buyer’s application is not approved, they cannot purchase a unit in the cooperative.

Question 19

Condominium contracts typically contain a…

Answer 19

‘Right of First Refusal’ clause. The clause allows the condominium association the first opportunity to purchase the condominium when it goes up for sale.

Question 20

The developer of a new condominium or cooperative building (or the conversion of a building into a condo/coop) must file an…

Answer 20

Offering Plan with the NY Attorney General’s office.

Question 21

The first part of the Attorney General’s review is called the…

Answer 21

preliminary prospectus or “red herring”. the Attorney General can suggest any changes to the project. Once the Attorney General accepts the prospectus, it is known as a black book or offering plan.

Question 22

Although the Attorney General does not regulate price, proper disclosure of price must be…

Answer 22

accepted by the Attorney General.

Question 23

If the developer of a new condominium building is changing the prices of all (or a group) apartment, he/she must…

Answer 23

file the changes with the Attorney General for acceptance.

Question 24

CPS-1 stands for…

Answer 24

Cooperative Policy Statement.

Question 25

A CPS-1 (Cooperative Policy Statement) is used by real estate developers to…

Answer 25

test the market before building a condominium or cooperative building.

Question 26

The CPS-1 (Cooperative Policy Statement) must be filed with the…

Answer 26

Attorney General.

Question 27

The CPS-1 (Cooperative Policy Statement) includes rules on how the…

Answer 27

development may be advertised. The developer cannot declare a firm price.

Question 28

The CPS-1 (Cooperative Policy Statement) period lasts…

Answer 28

120 days from the date of acceptance of the CPS-1 statement by the Attorney General, but can extend up to an additional 60 days.

Question 29

During the (Cooperative Policy Statement) period, developers can…

Answer 29

advertise and take names of people who are interested, but cannot take deposits or sell the properties. They can talk about price ranges, but nothing specific.