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September 6, 2017

New York Law Journal

Boards and co-op apartment owners want to know whether a co-op corporation can be converted to a condominium. This question is now being asked with greater urgency—as the condominium form of development and ownership has become more prevalent in New York and co-op apartment owners perceive significant benefits to be had from condominium versus co-op ownership. These include: enhanced apartment values (as much as 20 percent, based on empirical studies); and greater flexibility in transfers, leasing and apartment financing (which in most condominiums, unlike in co-ops, requires no board approval).
 
This column discusses the significant deterrents to converting co-ops to condominiums, in the hope that, for co-ops which desire to do so, solutions can be found to remove the economic uncertainty and risk which generally deters even consideration of such conversions.

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