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New York City condos differ from the golf course and lakeside offerings typical in the rest of the country. In the city, condos are usually stacked one atop the other in high-rise buildings. Despite the lack of surrounding land, these condos are still considered prime real estate. As such, they’re governed by the same laws on sales, financing, and taxes as other types of property.
There are some essential things you should know about condos in NYC before you make your first purchase. In Manhattan, each condo unit in a multi-dwelling building has its block number and tax lot. Parts of the building that are not part of your particular unit are called common elements. This includes outdoor areas, the land the building is on and shared indoor areas such as the lobby, hallways, utility rooms, and laundry rooms.
When you own a condo, you also own a specified percentage of these common elements. Accordingly, the whole building is collectively owned by the unit owners. Each owner pays a monthly maintenance fee referred to as common charges. This supports the operating expenses for the building. Unit owners are also required to pay their real estate taxes.
How New York City Condos Operate
When a new condominium is built, the developer has to provide the state attorney general’s office with a detailed plan that specifies how the building will be run. The same requirement applies to the building owner when an existing building is converted into a condominium. These plans must include the condominium’s bylaws and declaration. The latter details the percentage of common elements that each unit is responsible for and defines where these common elements are.
A board of managers runs New York City condos. Condo owners elect board members during the annual meeting. In some buildings, each apartment receives a single vote, while others allocate votes based on the percentage of common elements an individual owns.
Unlike the board in a co-op, the condo board does not have the power to reject prospective buyers. The only way board members can prevent the sale of a unit is to buy it themselves. This process, called “right of first refusal,” is seldom used because it requires a vote from other unit owners. Even if the vote passes, the board must still come up with funds to buy the unit.
Some court cases have revolved around the actions of condo boards. Courts typically hold that the board cannot be held personally liable for their operating decisions as long as the members are operating in good faith. Still unresolved in the courts is whether or not the board can assess a “flip tax” on owners who are selling their units.
Understanding The Pros and Cons of Condos
- Condominiums are a flexible and affordable option for some home buyers, but there are distinct differences between condos and single-family homes. Here are some things to consider if you are thinking of buying a condo.
- Storage space varies wildly in condominium units. Some buildings have storage cages in the basement, but many don’t. If you need a lot of storage space, a condo may not be the best choice.
- Private space outdoors is rare in a condominium development. This is great if you dislike maintaining a lawn, but if you love to garden or lounge outdoors, you may regret your condo purchase. If outdoor space is essential to you, consider purchasing near a park or a condo in a building with a roof deck, possibly.
- Most condominium developments have luxurious amenities like on-site gyms, communal outdoor spaces (in some cases swimming pools), community lounges, and playgrounds, which are very attractive to a certain type of homebuyer. Keep in mind, though, that the more amenities you have, the higher your monthly fees will be, so choose your amenities wisely.
- Almost all condo developments have an onsite maintenance crew that handles any repairs to your home and maintains the common areas. They often also arrange for deliveries to your home and even let approved workmen into your homes, such as cable or phone technicians.
- Condos usually offer enhanced security, such as a doorman, multiple secure entry locks, and in some cases, round-the-clock security personnel—which is very helpful in the event of an emergency.
- You’ll pay maintenance fees and dues to cover the costs associated with the amenities and security, even if you don’t use them all. The fees are set by the condo board, and they often increase on a periodic basis. These fees will be on top of your monthly mortgage payment.
- The resale price on your unit often hinges on what other units are available in your development, and at what previous like-kind apartments have sold for. Condo units are very similar to one another, so the number of available units, views, finishes, and appliances often determine your asking price.
- Condo living is governed by the condo association and any rules and regulations they adopt, although in most cases you will have a vote. Some condo boards restrict pets or noise levels. Make sure you read all your condo rules and regulations before purchasing a unit.
- Condo residents live in proximity to one another; it’s a good idea to meet your neighbors before you buy.