New York Real Estate for Brokers, 5th e

© 2013 All rights reserved.Chapter 6.2 Development 1

New York Real Estate for Brokers, 5th e

By Marcia Darvin SpadaCengage Learning


Chapter 6

Construction and Development Part II: Development


Chapter 6 Key TermsAmperageArea varianceArticle 9-A of the

Real Property LawBlueprintBuilding codeBuilding permitBuilding

specificationsCertificate of

occupancy (CO)Circuit breakers

Completion bondCondemnationCumulative zoningDefectDue diligenceEavesEminent domainExclusive-use zoningFlashingFooting Joist


Chapter 6 Key Terms (continued)

OutlotsPercolationPitch Platform constructionPolice powerProperty condition

disclosure (PCD)RaftersRegulatory takingSheathingSill plate

Slab-on-grade foundation

Special-use permitSpot zoningSteep slopeSubdivisionSubdivision

regulationsUse varianceWattsWetlandsZoning ordinance


Zoning Ordinances

ZoningZoning

Sale of development

credits

Sale of development

credits

Incentive zoning

Incentive zoning

Cluster zoning

Cluster zoning

ZoningpermitZoningpermit

Transfer ofdevelopment

rights

Transfer ofdevelopment

rights

Construct or alter a

building

Construct or alter a

building

Floor-to-area

ratio

Floor-to-area

ratio

Multi-use

zoning

Multi-use

zoning


The Subdivision

PUDs andzoning

Dedication

OutlotsImpact

fees

Local planning

board approval

Completion bond

Usable Square

footage

Acquiring thesite


Wetland Regulations Areas on or near a

wetland may require a permit of letter of permission

Wetlands mapped and regulated by NYS Dept. of Environmental Conservation

© 2013 All rights reserved.

LandIncludes: types of soil location of

wetlands, springs, floodplains

forest areas rocks, trees,

vegetation

A major characteristic of land is its immobility

Chapter 6.2 Development 8


Functions of Planning BoardsFunctions

{related to real estate}

Making investigations

maps & reportsrelating to planning & developing

Recommendingamendments

to the zoning

ordinance ormap

Implementingmaster plan

Preparing and amending

master planfor

community



State Environmental Quality Review Act Due diligence reviews

Environmental Impact statements

The lead agency coordinates the action

Mandates environmental assessments



Zoning Board of Appeals Interprets the zoning ordinance

Grants use and area variance

May grant special use permits



Zoning ActionsZoningBoard

Of Appeals

ZoningBoard

Of Appeals

SpotzoningSpot

zoning

VarianceVariance

Special Use

Permit

Special Use

Permit


A Purchase Money Mortgage


Private Land Use Control

Easements

Subdivision regulations

Liens

Deedrestrictions


Condos and Coops

Condo-title transferred by deed

Coop- title transferred through sharesof stock


Cooperatives

A cooperative corporation usually owns the land, buildings, and property rights and all interests

The title to the property, as shown on the deed, is in the name of the corporation



What are Shares of Stock?

The shareholders do not own real estate, but a proportionate number of shares of stock in a cooperative corporation

As lessees, the shareholders pay a monthly maintenance fee-the rent



Cooperative Board Application and Interview Preparation

Before SchedulingInterviewConsider

Co-opBoard

Application

Interview Prep

The Role Of Time

FamiliarizePurchaser Package forDiscussion purposes

Need for total disclosure

By purchaserDuring

Interview

Real Estate Example: Why?Dr. Leslie is a single woman who is paying cash for a cooperative. She has sizable and safe investments and no debt. The cooperative board refuses her. No reason is given.



Key Issues to Review in a Co-op Board’s Minutes

Maintenance and Assessment History

Underlying Mortgage

Reserve Fund

Many cooperative reserve funds receive income from the flip tax, a charge levied when units change hands



CPS1 Phase: Cooperative Policy Statement

• Sets out New York Attorney General’s rules • how a developer

may test market for a new development before filing the offering plan and before construction is completed

• The CPS1 period • lasts 120 days

from acceptance of the CPS1 statement by the Attorney General

• can be extended by request from the developer for an additional 60 days



Primary Residency Versus Subletting Issues In the Cooperative

Primary resident owner of the cooperative unit

Subletting allows tenant shareholders more flexibility in

ownership board may limit the length of time a tenant

shareholder can sublet a unit

If the sponsor owns the shares allocated to the apartment, he may be permitted under bylaws or rules to sublet or rent a unit even though a unit owner cannot



Documents Needed for the Sale/Purchase of Cooperatives

AlterationAgreements

House Rules

Offering Plan

Stock Certificate

Proprietary Lease



Offering Plan

Size of unit

Size of unit

The floor plansThe floor plans

The constructionThe construction

The size and materialsThe size and materials

The plans of recreation buildings The plans of recreation buildings

The make and model of appliancesThe make and model of appliances

The scope of the landscaping The scope of the landscaping

The land on which condominium is locatedThe land on which condominium is located



Offering Plan Amendment :New Development

o New building and after 90-day tenant’s exclusive period in a converted building

o sponsor can separately negotiate the price of a particular apartment

o The developer can sell one apartment for $200,000 and then sell another identical apartment for $175,000



Offering Plan Amendment:Building Conversion

NYS lawWhen a developer files an offering plan

with the Attorney General to convert an existing building to a condo or co-op, the tenants have a 90-day exclusive right to buy their apartment

During this period sponsor cannot negotiate separate prices



Difference Between a Condop, Condominium, and Cooperative Apartment

A condop isa building that includescondominium and

cooperative ownershipin the same structure

Real Estate Example: Why it is created?

Building owner Sal owns a multi-unit apartment building that includes a store on the street level. Sal records the Declaration of Condominium, dividing the property into two condominium units: Condo A (the commercial unit) and Condo B (the residential unit). Sal continues to own fee title to the commercial condominium unit and collects rent from the store. As fee title owner to Condo B, Sal deeds the residential unit to Big City Co-op Corp. in exchange for the shares of Big City Co-op Corp. Various blocks of shares are allocated to the different apartments. Sal now sells the block of shares allocated to each unit (together with a proprietary lease) to individual purchases.



Condominiums A structure of two or more units Interior space is individually owned Common elements, are owned by owners of

the individual units To create, the owner/developer of the

property signs a condominium declaration

Shareholder’s rights and obligations are in the condominium’s bylaws

The sponsor is the owner or developer Chapter 6.2 Development 27


A Condo and Coop Closing Compared

Condominium

Cooperative

Type oftransaction

Fee simpleownership

Personal property; shares of stock

Transfer documents

Deed Proprietary lease

Taxes at closing

NYS transfer tax

NYS transfer tax; flip tax


Closing CostsReal

EstateTax

TaxDeductions

Common Charges

Mansion Tax

MortgageRecording

Tax

Right of First

Refusal


New York Real Estate for Brokers, 5th e

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