COOPERATIVE UNIT PURCHASES AND SALES
The law offices of Pun & Associates provide legal representation to individuals or entities that are looking to purchase or sell cooperative units, whether as a primary residence or as an investment property in the New York and New Jersey metropolitan area. The New York and New Jersey metropolitan area shall comprise of all five boroughs of New York City, Nassau and Suffolk counties in Long Island, Rockland and Westchester counties in New York State along with all New Jersey.
If you are a first-time buyer or seller of a cooperative unit or if you have already purchased or sold a cooperative unit, Pun & Associates will gladly represent you in either the purchasing or selling process. Our dedicated staff and experienced attorneys will help make the purchasing and/or selling process as streamlined and as stress-free as possible.
As buying or selling a cooperative unit is a complex transaction, it is always advisable that you obtain the representation of an attorney to safeguard your rights and clarify your responsibilities during the purchase or sale of a cooperative unit. We, at Pun & Associates, will be with you every step of the way from the signing of the contract through to the closing of the property.
Purchasing or selling a cooperative unit is slightly different than purchasing a condominium unit in that you are purchasing or selling the right to occupy a cooperative unit. What you are purchasing or selling are ownership shares in the cooperative corporation. The unit that you are buying or selling is the physical manifestation of your ownership percentage in the cooperative unit. In addition, purchases and sales hinge on the approval of the cooperative association’s board of managers. The board of managers decide whether the buyer is financially able to purchase the unit, pay the monthly maintenance fees and is able to follow the rules and regulations of the cooperative association. If the board of managers rejects the buyer or buyers, then the proposed transaction is terminated. The board of managers work at their own pace and it may take a while before it makes its decision on the financial viability and ability to follow the cooperative’s rules and regulations of a prospective buyer.
It is important that before you sign a contract to purchase a cooperative unit that the cooperative’s operating agreement and financials are reviewed to make sure that you are buying into a financially strong cooperative. In addition, the cooperative documents may state that when you sell your interest in the cooperative you will have to pay the cooperative a portion of the sales price. It could be 1% of the sales price or a higher percentage of the sales price. This is what is called a “flip tax.” Cooperatives differ in the amount of “flip tax” that is charged. The attorneys at Pun & Associates can review the cooperative’s documents with due diligence and care for your benefit.
Aside from the board of managers role, the procedural steps in purchasing or selling a cooperative unit are similar to the purchase and sale of a condominium unit. We invite you to look at the “Condominium Unit Purchases and Sales” sections of our website for more information about the buying and selling process.