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Ask an Expert: Are condo boards as powerful as co-op boards?

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Q. Are condo boards as powerful as co-op boards? Are they as difficult when it comes to renovations and sublets?

A: Though condo boards and co-op boards each operate as the captain of their respective ships, there is a significant mismatch of power, say our experts.

Let's start with what the two types of boards have in common. Both are elected and tasked with following the building's rules and acting in the best interest of residents, says Gordon Roberts, a real estate broker at Warburg Realty.  Similarly, both determine monthly expenses (maintenance fees in co-ops and common charges in condos), assess owners, oversee the shared areas of the building and decide which services will get residents' dollars, notes Roberta Axelrod, a real estate broker and asset manager at Time Equities

All that said, co-op boards "tend to be more active and, frankly, more powerful," says co-op and condo attorney Dean Roberts of Norris McLaughlin & Marcus, largely due to the stronger legal tools at a co-op's disposal--which in turn derive from the different ownership structures of co-ops vs condos.

In a co-op, where residents own shares in the corporation rather than a deed to their unit, "there is a landlord-tenant relationship and a proprietary lease or occupancy agreement, which is not present in a condominium," explains Roberts. "Therefore, a cooperative can sue in Housing Court to enforce the collection of maintenance and to address breaches of the house rules."  Importantly, a co-op's ownership structure also means that  the board can wield the ultimate power--eviction--just like a landlord.

Since condo owners hold deeds instead of leases, eviction is not an option. Moreover, condo boards must seek out the far slower and more expensive Supreme Court to deal with legal disputes. 

When it comes to the sale of apartments, co-op boards can reject buyers out of hand. But while condo applications can be as intrusive as co-op applications, a condo board's only recourse (other than stalling) is to exercise its right of first refusal--i.e., purchase the apartment itself--which virtually never happens.   

"Most condo boards are 'hands-off' and have little influence on selling or subletting," says Warburg's Roberts. "The condo ownership experience is much closer to that of a free-standing property."

With regard to sublets, co-op boards can reject a tenant outright, while condo boards must settle for the rarely-exercised right of first refusal.   Co-op boards will typically want a full board package from a potential tenant and can restrict the length and frequency of renting, says Kory. Technically, condo boards can do this too, but they usually don't, our experts say, though many won't allow rentals for less than 6 months. 

But condo boards can be just as tough as their co-op cousins about renovations.

"Every board first and foremost wants to make sure that renovation work will not compromise their building’s infrastructure or adversely impact the residents," says Deanna Kory, a real estate broker at the Corcoran Group. "To that end, for a major renovation, all boards require submission of an alteration agreement and a review of the proposed work by the building's architect. But even for smaller projects, boards require notification and approval, to make sure the contractors are adequately insured and that several projects don't take place at the same time."


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