Q: I am interested in buying an 800 square meter apartment with a bedroom in Manhattan. The price is 399,000 US dollars and requires considerable renovation work. The home ownership association's fee is $ 1,941 per month. Two other units in the building are for sale, both with higher prices – $ 620,000 and more – but the club fees are lower, around USD 1,750 per month. They have been renovated, are on higher floors and are comparable in size. I don't understand why these units have lower monthly fees. What goes into the calculation?
A: As a buyer, it may seem strange that the fees of the homeowners' association do not match the condition of the condominium unit. However, the proportion of each unit at these costs was very likely determined when the condominium was formed, so that the current renovation needs are not reflected in them.
The New York legal law describes how the percentage of shared interest can be calculated for each unit in a building. The percentages that determine monthly fees are defined in a document called Schedule A in the offer plan of the condominium and do not change over time, unless the affected units agree.
“All future joint fees increase and ratings over the entire lifespan of the building use the schedule as a building block for consistency,” said Mark B. Levine, who has three real estate management companies in New York City and is a director of EBMG LLC.
While the sponsor or the developer has to determine percentages within the law, he has flexibility, said Laura Mehl Sugarman, partner of real estate practice at Benesch.
There are four methods to set this percentage according to the law, and usually the size of the device and the floor play a role. However, other factors can be taken into account, e.g. B. if a unit has advantages over others. The law also allows each unit to assign the same percentage or the same percentage for all units within a class. The documents of the condominiums describe which method was used.
If your building has set the percentages in the middle of a conversion into condominiums, the renovation work in one unit may have justified a higher percentage of common interest.
Before buying, it is a good idea to examine the schedule of a document to see the common interest in the unit in which you are interested and how it is compared to others in the building. So you have an idea of what you can expect when it comes to future increases.
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