Hi frankcorrao-ga ?
Below is an outline summary of the New York State regulations for coop
conversion. They apply to New York City.
Steps in the Conversion Process
1. Owners or sponsors "present an offering plan to each tenant and
to the Attorney General." It is only a preliminary prospectus and is
referred to as a "red herring" because the title on the cover is
printed in red.
2. Two types of conversions may be proposed: eviction and non-eviction.
Under an eviction plan, "a non-purchasing tenant may be evicted
from an apartment by the purchaser or the sponsor after a certain
period of time."
Under a non-eviction plan, a tenant may remain in the building as
a renter after the conversion.
Senior citizens (62 and older) and the disabled are protected from
eviction although they may later buy their apartments at the price
offered other tenants (at the time they make their decision).
3. The tenants usually organize themselves and hire architects,
lawyers, etc to examine the condition of the building and the offering
plan itself.
4. After the Attorney General approves the "red herring" plan, a
final offering plan is made by the sponsor. It has a black title
replacing the red one of the "red herring," and is called a "black
book."
5. Even after Attorney General approval, the plan won't go through
unless a certain number of tenants agree to buy their apartments. They
have 90 days to decide whether to buy. This 90-day period may be
extended under certain conditions.
6. "The conversion laws in New York City ... specifically prohibit any
person from interrupting, discontinuing or interfering with any
essential service which substantially disturbs the comfort or peace
and quiet of any tenant who uses or occupies an apartment. The tenant,
or the Attorney General, may take legal action to stop harassment."
Tenants Rights
1. In an eviction plan, 51% of the tenants must agree to buy their
apartments (or shares) for the plan to go forward. Senior citizens
and the disabled do not count towards this 51%. If this percentage is
not reached, the plan must be abandoned.
2. Non-purchasing tenants may stay in the building for 3 years from
the date the plan becomes effective.
3. Rent-stabilized tenants are entitled to have their leases renewed
up until the end of the 3 year period. Those whose leases extend
beyond the 3-year periods may not be evicted until their leases
expire.
4. All services and facilities must be provided to non-purchasing
tenants who decide to stay for the 3-year period.
5. "For a non-eviction plan to be declared effective, at least 15% of
the dwelling units must be sold to bona fide tenants or non-tenant
purchasers who intend... to live in the unit. The percentage may
include sales of vacant and occupied apartments. However, an outside
purchaser of an occupied apartment may not evict the tenant living in
the apartment. The tenant may continue in occupancy as a
rent-stabilized or rent-controlled tenant, paying rent to the outside
purchaser or the sponsor, who must provide all the services required
under applicable laws."
Section 3 and Section 4
http://www.oag.state.ny.us/realestate/conversion.html#3
The above outline was taken from "The Cooperative and Condominium
Conversion Handbook" of the NY Attorney General's office. The entire
handbook is found at:
http://www.oag.state.ny.us/realestate/conversion.html
You can read about he basics of cooperative conversion from the
tenant's point of view in a NY Times article <
http://www.oag.state.ny.us/realestate/conversion.html >. The article
is a little out of date (April 18, l982) but points out the still
valid importance of organizing.
As far as a special tenant price for newly converted coops: the
sponsor or owner is anxious to get 51% of the tenants to accept the
offer (eviction plan) and will be disposed to offer insider prices
below market value.
A general article on cooperatives may be found at:
Housing Cooperative
http://en.wikipedia.org/wiki/Housing_cooperative
I hope I've given you a good start in thinking about coop conversions.
Good luck,
alanna-ga |
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