Romer Debbas, LLP recently represented the purchasers of co-op for over $10 million on Central Park West in a building which the clients already owned a unit in. Cooperative Corporations in Manhattan favor purchases of units as primary residences, and many even specifically prohibit purchases as investment properties. There are various other arrangements as well, such as pied-a-terres or secondary homes. The issue that arose in this transaction is that this co-op has a very strict policy prohibiting existing shareholders from owning multiple apartments in the building which are not combined.
In order to induce the board’s approval of our client’s purchase of a second unit, we negotiated that our clients execute an agreement which stated that they agree to list and sell their existing apartment within two years of the purchase of their new unit. In the meantime, they may not sublease or finance their previous unit. Should they fail to take actions to sell it within the two year time frame, the board may do the following: a) arrange for an appraisal of the unit, b) retain the services of a real estate broker to list the unit for sale at such appraised price and c) execute any documents needed to effectuate the sale through the power of attorney to the co-op’s managing agent that our client was required to provide. Our clients are confident that they will successfully sell their current unit well within this two year period and in the slight chance this does not happen, we negotiated a very fair agreement for a rather unorthodox transaction.
This transaction was handled by partner Steven Matz, Esq. and senior paralegal Justin Musumeci.