CO-OP/CONDO BUYERS

A READER ASKS: I'm fighting with my neighbor. It's gotten to the point where I want to sue her for leaving her garbage laying around and letting her dogs bark all day and night. Don't I have a right to a quiet, peaceful home? But my board wants me to try mediation. What is that? Is it worth it?

HABITAT ANSWERS: If you don't want to spend a day in court, try mediation. It can save you time, money and (possibly) some bitterness. What often happens when there is no mediation is predictable: charges, countercharges, lawsuits — and big legal bills. Besides creating bad feelings among the owners, litigation disrupts the building's budget and can quickly become a financial black hole.

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Thinking of perhaps keep a little pied-à-terre in New York, a little home-away-from-home where you can stay when you're in the Big Apple? Well, try to keep its market value below $5 million if a bill that State Senator Brad Hoylman plans to introduce goes to law. The idea, as reported by Crain's New York Business, is based on a proposal by the Fiscal Policy Institute noting that "because of the arcane nature of the City’s property tax, or because such units benefit from tax breaks mainly intended to benefit more affordable housing," non-primary residents "pay a very low effective property tax relative to the real market value of the property. Yet, the high value of their property depends on local tax dollars supporting the infrastructure and public services that contribute to the city’s quality of life and attractiveness."

The bill follows the Institute's math, which says a tax starting at 0.5 percent for the first $1 million in value over $5 million, rising to 4 percent for the value over $25 million, would generate an estimated $665 million from the 1,556 coops and condos in that price range and owned by non-primary residents. Which, if you're a Saudi or Chinese billionaire, is basically the change in your couch.

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At the co-op 1107 Fifth Avenue, an apartment that was once the city's largest has been sold to hedge-fund honcho Mark Kingdon, founder of Kingdon Capital Management, for $30.9 million, reports the New York Daily News. And this marks the end of a circuitous journey for the 10-room penthouse with a wraparound terrace, which Peruvian billionaire Carlos Rodriguez Pastor had previously wanted to buy. So did the co-op board's president, Maureen Klinsky. She bid $21 million, Pastor bid $27.5 million, and the board naturally accepted Pastor's higher offer. Which then begs the question of who was behind the board suddenly deciding it was going to build a shared roof deck for all the shareholders — accessible only by the penthouse terrace? And then shifting gears and deciding it was going to do repairs that would limit an owner's access to the terrace? Pastor sued and withdrew his bid — though Klinksy still didn't get to guy it. As Curbed.com has written of all this: "Co-ops: They're just like high school except nobody graduates unless they die."

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Kim Velsey in The New York Observer writes, quite entertainingly, of the travails facing diplomats seeking co-op or condo housing in New York. At many places it's "Diplomats Need Not Apply," as boards worry about diplomatic immunity, security details, endless sign-offs from the State Department and others, and, of course, the dreaded scourge of cocktail parties. Not to mention: You approve one diplomat, there's a coup, now you've got a whole new neighbor to contend with. We learn that while the UK and New Zealand have been given the red carpet, poor France got turned down at River House and Qatar had to buy a townhouse. (We know ... big hardship.) Attorney Steven Wagner offers an amusing anecdote about a bad diplomat in Astoria, Queens. And you don't even want to know what diplomats from poor countries have to contend with. Two words: studio apartment.

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ILSA, the federal Interstate Land Sales Full Disclosure Act, was designed to prevent deceptive real estate practices by requiring developers to disclose information needed by potential buyers. But now a bill passed by both houses of Congress and awaiting the president's signature takes that protection away from condominium purchasers. Introduced by Sen. Charles Schumer (D-NY), Sen. Kirsten Gillibrand (D-NY) and Sen. Dean Heller (R-NV), the bill, S. 2101, came after much lobbying by the Real Estate Board of New York, reports TheRealDeal.com. Developers had complained buyers were rescinding deals and demanding money back over minor paperwork errors. Buyers have long complained that developers would sell apartments in under-construction buildings and then not deliver the goods — stringing them along for month after month. Supporters of the bill say having ILSA apply to condominiums created uncertainty for developers and that New York State has other anti-fraud protections.

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A number of co-op and condo board members have reported that their neighbors are suddenly turning into watchdogs. Some of them hope to create a shadow board to monitor the elected board's every move. Others want their boards to put major expenditures to a vote of all residents. They often believe co-ops and condos be a participatory democracy rather than a representative democracy.

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Two New York State legislators yesterday called for an investigation of what they term deceptive insurance practices on the part of Airbnb, the apartment-sharing giant that critics, including co-op and condo boards, say helps apartment-dwellers violate laws on short-term rentals and most cooperative and condominium bylaws regarding illegal hoteling.

New York State Senator Adriano Espaillat and Assemblymember Francisco Moya sent a letter to the State Superintendent of Financial Services, Benjamin Lawsky, to ask that his office investigates "the possible illegality of the home sharing company Airbnb with respect to potential violations of the state insurance law."

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First, don't call them "grab bars" — call them "balance bars" and stress how helpful they'd be after a skiing accident or a kid's bad fall skateboarding. You'll find these and other co-op / condo sales tips from a broker and an interior designer in this "Home & Garden" column in The New York Times. Since removing such fixtures leaves holes in the walls, the main advice is to upgrade them and turn liabilities into assets. Sure, a curbless shower is good for wheelchairs — but just check out at how cool and streamlined they look!

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Discovering that your co-op or condo has a ground lease — a real-estate instrument in which your cooperative or condominium corporation owns the building but only leases the land, usually for periods of up to 99 years — can be unnerving. Why? Because you have to pay a monthly ground-rental fee atop your maintenance or common charges and because ground leases can be detrimental to sales: Lenders don't like to offer loans when the building has, say, less than 30 years left on a lease.

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Single-family houses can get reverse mortgages. Two- to four-family houses can get reverse mortgages. Even condominium apartments can get reverse mortgages — but not co-op apartments. Why? According to a report by The New York Times, it's because most reverse mortgages are insured by the Federal Housing Administration (FHA), part of the Department of Housing and Urban Development (HUD) — and HUD has chosen not to let co-op owners tap into their home equity. As a spokesperson told the Times, “FHA’s single-family programs are based on loans being secured by real property and the co-op structure does not meet this basic requirement.” That's true: In co-ops, owners own shares in the building corporation, which obviously means the apartment can just get up and walk away! Why, co-ops are so undependable and dangerous, banks won't even lend you money to buy them, except that they do. After all, you know those undependable prewar / midcentury buildings in New York City — why you just can't count on their market value ... to do anything except go up. HUD? More like DUD.

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