5 Little Known Co-op Rules and Regulations That Will Make You Scream
Cooperative buildings in New York City will make you jump through hoops to purchase your unit and afterward, limit exactly how you can use the space you’ve just bought. This article will teach you about four different types of co-op rules and regulations that can be imposed on owners, so you can decide if the loss of flexibility in a co-op makes up for the lower price.
Here’s a what you should know:
There are often strict co-op rental rules that often banned or severely limit subletting.
Pets are not always welcome in co-ops.
You may be subject to fines and penalties if you break the co op rules.
5 Co-op rules and regulations you need to know
1. No Pied-a-Terres
Translating literally to “foot on the ground,” the term pied-a-terre refers to any type of temporary lodging.
If your co-ops ban pied-a-terres, that means you won’t be able to use your unit as a vacation home, or second home; the unit must be your primary residence. What “primary residence” means is sort of up to the interpretation of the co-op board.
Always check the co op rules and regulations if you’re not planning on living in the property full time.
2. You May not be able to Sublet Your Unit
Some coops straight up do not allow you to sublet your unit. Some are OK with it for certain amounts of time - say 4 out of every 7 years or 2 out of every 5 years. Some allow you to sublet from the get go and some make you wait - usually for about 2 years of ownership - before they’ll let you rent it out. Be careful; Some coops will be OK with subletting but they will charge you a percentage of the annual rent for the privilege.
If you do live in a co op that allows subletting, the co op rules will prevent you from renting your place to just anybody. Your potential renter will need to go through the same strict vetting process you went through to buy your unit.
3. Your Co-op Can Ban Pets
There are lots of co op rules and regulations around pet ownership. Some cooperatives will allow cats but not dogs or they will allow certain breads or sizes of dogs. If you have a furry friend, make sure you check that they’d be welcomed in your building before you put an offer in.
4. No Gifting Or Parents Buying for Children
Planning on getting a down payment from your parents? Co-op rules on family members can be harsh, so even though your bank might be OK with it, some co-op rules specifically prohibit you from using a gift to pay for the property.
What if mom and dad buy the unit and let you live there full time? Some co-ops allow parents to buy for their children while others do not.
5. No Financing
Some coops won’t allow you to use financing or they will require you to put 60% or 70% down. Most coops are reasonable and only require a 20% down payment, but certain ones should be avoided by individuals who plan on getting a mortgage.
If you break the co-op rules and regulations, you may have to pay
In addition to these general policies, every coop will have a list of co op house rules you’ll need to read over and agree to as part of your purchase. These co op rules are largely about smaller things like recycling, smoking, acceptable hours to use communal laundry machines, etc.
If you break any of the big or small tenants of your co op, you will likely be subject to fines that escalate with repeat offenses. If you are in wild defiance of your co op rules, you may even be forced to sell your unit.
Are there co-op rules on family members living in my unit?
Your guests, including your family members, are subject to the same restrictions that you are. That means if your cousin Sal was smoking in your unit, you’re on the hook to pay the fine. Family members are allowed to live with you in co-op units as long as the primary individual on the lease continues living in the apartment. If you’re not there and their name isn’t on the lease, it’s usually considered a sublet.
Knowledge is power
The more you know about co-op rules and regulations, the more you’ll be able to choose a home that is the perfect option for you. While co-operatives do have distinct advantages over condominiums, condos can be a great alternative to co ops if you are put off by these co op rules.
You may also want to check out these resources:
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