CO-OP/CONDO BUYERS

I want to put in a dishwasher, but the broker said I would have to ask the board. The apartment I want to buy already has a washer/dryer, so why would this be a problem?

Your board has probably consulted with its engineer or architect or other professional involved with the building's systems. Many properties, especially the beautiful older ones, do not have sufficient infrastructure for all the equipment we like to use now.

In your case, the building's drain system may have limited capacity. The board may have restricted the quantity and type of equipment it will allow to accommodate the current drain capacity; it may have chosen to cap certain equipment to what was present as of a particular date; or it may have limited the number or type of equipment based on some other guidelines. The board may also be concerned about additional costs for water/sewer charges that the additional dishwasher would incur.

I encourage you to discuss any concerns with your property manager. Also, arrange an appointment to read your building's minutes. Both resources will provide meaningful guidance to you. Your offering plan may also provide a report of your building's plumbing capacities and an explanation of the equipment originally provided to each apartment.

Finally, you should confirm that the washer/dryer currently installed received the board's approval, especially if they were not part of the original installation by the sponsor. If your seller, or any former owner of the apartment, installed the washer/dryer without approval from the board, you may need to remove it (using a licensed and insured plumber and electrician).

Divya Rashad is executive vice president and managing director of The Andrews Organization.

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Almost one month ago, Lower East Side residents voiced serious concerns about the construction site for a new luxury condo tower after parts of Cherry Street — located behind the site — began to crack and sink. Now locals have learned that the building "on the East River waterfront could rise up to 800 feet — almost three times taller than the neighboring Manhattan Bridge [as well as] the tallest buildings in the area," according to DNAinfo. Talk about sticking out like a sore thumb. Curiously enough, DNAinfo reports that "[Extell Development Company] previously had a permit to construct a 68-story building but applied to lower its height to 56 stories in March.... Extell received a permit to build the 56-story tower last month, according to [the Department of Buildings'] website, even though a sign at the construction site says the building will be 71 stories tall." Residents are not happy, especially since — in addition to the sinking street and construction concerns — they’ve also lost a supermarket thanks to the new development. One thing's for sure, neighbors are ready to air their grievances about the tower "in a July 29 meeting hosted by Community Board 3 and the Two Bridges Tenants Association. The meeting will take place at 6:30 p.m. at the Two Bridges Tower community room, located at 82 Rutgers Slip."

Rendering by CityRealty

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Not always. The importance of having a reserve fund has been coming up with greater frequency in the last few years. This past spring, we began managing a building and it was immediately apparent that the property was a wreck. In the field, our property managers were met with severe problems such as deteriorating elevators that were damaged from years of neglect, cracked sidewalks in need of repair, a leaky roof, asbestos situations in the boiler room and garage, and a temperamental boiler. And, of course, let's not forget about all the local law work that had not been done!

If Murphy's Law was to apply to any building, this was it! The challenge continued away from the building. Over time, we found ourselves receiving legal notices from irate vendors demanding payments. The largest ones came from oil companies because of the high heating costs of recent winters. We had numerous meetings with the board to come to grips with the enormous financial challenge. A more financially sound building would have turned to its reserves to address these issues. But this was not an option here. This building did not have any reserves.

A special meeting had been called to give all shareholders an opportunity to speak. The truth was painfully clear. There was no money for a rainy day. Ultimately, the board decided to impose a special assessment. Because of the magnitude of the financial challenge, the assessment will be a part of their lives for the next four years.

Anastasios Magoulas is CEO of All Area Realty Services.

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Even if you live in a five- or six-story building rather than in a super-tall luxury high-rise, there are perks you get on the top floor that you don't on the lower floors. For starters, even if your neighbors frequent the roof lots, you don't have to deal with stomping at all hours of the day and night — which is nice. You tend to get better views and lighting, too. This is why maintenance fees and common charges are typically higher for people who live on higher floors. One co-op shareholder in the Upper West Side asks Ronda Kaysen why in this week's Ask Real Estate column in The New York Times: "Does an apartment owner on the 10th floor use more services than someone living directly below her?" When a building is set up as a co-op or a condominium, Kaysen explains, "the developer has to allocate the shares or common interests in a way that is marketable and makes sense, varying the maintenance or common charges throughout the building." She adds that while residents living in units on higher floors might use more services than those on lower floors, it isn't the reason they pay more. Living higher up, says Kaysen, is considered an amenity. Nice views and sunny rooms do come at a premium in the big city. 

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Most well-run co-ops and condos have a reserve fund, which you can think of as a building savings account. As an owner/shareholder, you want peace of mind that, should an unexpected capital project arise or large-scale repair be needed, the building has the funds to cover the expense. Imagine a rather large and unexpected leak in the roof causes damage to many of the building's common areas. If a building does not have a reserve fund, the owners/shareholders are responsible for coming up with the immediate funds needed to pay for that unexpected roof repair. The reserve fund makes it easier for the building's management team to expedite needed repairs.

It should be a red flag to you if a building you are looking to buy into does not have a reserve fund. When reviewing a building's financials for a prospective owner/shareholder, auditors and attorneys like to see a reserve fund that contains enough money to cover an unexpected expense or repair that could arise. They want to assure their client that the building has money to fall back on without the need to assess the building's owners/shareholders. You want to buy into a financially healthy building, one with three to six months' worth of common charges or maintenance charges in its reserve account. It is also recommended that a building set additional funds aside to finance anticipated future major repairs and replacement projects.

The reserve is a positive building asset, one that is shared by all unit-owners/shareholders on the balance sheet. A reserve fund demonstrates board discipline and healthy financial solvency.

Michael Berenson is president of Akam Associates

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Long before Dumbo was even a thing and back when Red Hook was crowned in 1990 by Life magazine as one of the ten worst neighborhoods in the United States, calling it the crack capital of America, Brooklyn Heights was already a pricey and much-coveted neighborhood. Talk about location, location, location: it boasts the promenade overlooking the Statue of Liberty and the New York skyline, it's within walking distance of the Brooklyn Bridge, and it offers just about every subway line you'll ever need to get anywhere you want. With the explosion of the luxury market, it's little wonder that prices — and the opportunities to make some serious cash — have skyrocketed. Brooklyn Heights is home to Brooklyn Law School. The school has reportedly been selling a lot of its property. Late this week, reported the New York Daily News, the school put one of its best located buildings on the market. The 12-story rental at 2 Pierrepont Street faces the promenade. According to the Daily News, "the school snagged the building for just $2.2 million 30 years ago and has been using it as student and faculty housing. Now, it could be converted to for-sale homes or even torn down by a developer to make way for some of the borough’s most luxurious housing." Can you say condos? The Daily News also reported that "while no asking price [was] specified, sources said the building could trade for up to $30 million." Sorry, students and faculty. Unless you have the cash for a luxury condo, looks like you will all have to get used to a longer commute.

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Sure, it's no Jenga tower, but it's still set to become the tallest above 72nd Street. According to New York YIMBY, Tribeca-based developer DDG has officially broken ground on 180 East 88th Street: "The 32-story structure will feature 30-foot-high masonry arches on its top floors and a façade clad in brick imported from Denmark." Each of the 48 condos will average about 2,693 square feet, with ceiling heights of 16 feet. No gripes about tiny New York apartments and lack-of-space issues at this place. As for the ground floor, it will "host 52,000 square feet of commercial space, a small nonprofit art gallery, and 36 bike storage spots." YIMBY adds that generous zoning in the Upper East Side "has made it a hotbed for new high-rise condo towers. The short list includes two 21-story towers planned near the 86th Street stop on the 4/5/6, at 1289 Lexington Avenue and 147 East 86th Street, an Extell-developed condo project in the works on Third Avenue between 94th and 95th Streets, and a glassy development designed by SHoP under construction at 1711 First Avenue." Well, someone has to make sure of the Second Avenue Subway once it's finished in late 2016 or early 2017. It ain't New York City unless the trains are crowded, after all.

Image via DDG

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If you thought Manhattan was the only borough looking good in the second quarter, think again. Late this week, Douglas Elliman released its Q2 report showing Brooklyn and Queens sales figures and they aren't too shabby, either. According to the report, Brooklyn housing prices continued to break records in 2015, including the average sales price for the borough and for brownstones. Rising prices pulled more inventory onto the market, yet supply remained below long-term averages. Douglas Elliman anticipates a fast-paced market to carry on into the fall. Okay, so maybe Brooklyn's figures aren't much of a surprise, but what about Queens? Well, it looks like housing prices there increased, pushing condos to a new record. Median sales prices for condos in Long Island City, for example, soared 29 percent to $998,000. That's good news for these guys. If you're a buyer, though, the news is not so good. The report shows that faster marketing times and less negotiability made it a tougher market for would-be purchasers to navigate. Based on the current market, Douglas Elliman expects similar conditions in the coming quarters.

Take a look at the Queens report (click to enlarge):

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While it would be nice to score a luxury condo on Billionaires' Row, not everyone can afford it. The Upper East Side is more expensive than all of The Bronx. Tribeca has some of the priciest zip codes in Manhattan. And Brooklyn is getting so expensive that people are getting priced out of it and having to move… to Manhattan. Ah, the topsy-turvy world of New York City real estate. So where to for those who still want their condo and live in it, too? How about Long Island City? According to New York YIMBY, Ekstein Development began excavation at 25-19 43rd Avenue, in Long Island City, where a nine-story, 86-unit residential building is planned. The 86 condominiums will spread across 68,145 square feet of residential space, working out to an average unit of just 792 square feet." You'll have to wait a bit, though: "Foundation work is currently underway, per TCSB, and completion is slated for January 2017." 

Rendering of 25-19 43rd Avenue in Long Island City from teaser site 

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That's not a Jenga tower, folks. That is a rendering of what will be one of the tallest residential towers in the city, standing at a vertigo-inducing 900 feet, 90 stories. Bauhouse Group, the developer, does not seem interested in making sure the new colossus fits in to old-school Manhattan neighborhood Sutton Place. And longtime residents feel duped. According to the New York Daily News, the neighborhood's "longtime residents… thought they were getting a new luxury apartment next door that would be 13 stories tall — 30 at most." So, in December 2014, the luxury developer met with residents of 434 East 58th Street to discuss the matter of air rights. The Daily News reports that "according to minutes of the Dec. 22 meeting, a shareholder asked Bauhouse executive Christopher Jones for details, including whether it would be 'a 100-story building.' Jones replied that he was 'unsure of exact height' and that 'air rights would be a factor,' but the tower 'will not be 100 stories, as of now expected to be 13 stories.'" The co-op's shareholders voted to sell its air rights to the developer for $11 million, figuring that "30 stories wasn't completely out of character" for the holdover neighborhood that's been home to Vanderbilts, Morgans, and Marilyn Monroe. But "on April 7, Bauhouse put out a full-color brochure of a 90-story 'ultraluxury' skyscraper," leaving the shareholders feeling mislead. Now it looks like it's a game of he said/she said, with a spokesperson for Bauhouse claiming the minutes aren't accurate and the shareholder who took them insisting they are, indeed, correct. Talk about getting a harsh lesson in the cutthroat world of New York City real estate: Luxury tower style. 

Rendering of 426-432 East 58th Street/Bauhouse Group 

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