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Posted by Anna on June 02, 2000 at 12:08:02:

In Reply to: Rent increase possibly illegal? posted by Mark Cannistraro on June 02, 2000 at 11:31:23:

: For the last 9 years, I've lived in a one bedroom apartment in the West Village. The rent increases, while a bit more than it would have been if the apartment were regulated, were always managable until last year, when the rent jumped 20%.
: This year, the management company wants another 20%!

: My apartment is considered a "co-op," but there is no private owner. Apparently, my building USED to be apartments (my neighbor pays $300 a month) and at some point, the bulding went co-op. The company that owns the building bought the newly available co-ops FROM THEMSELVES and thus are able to avoid the rent stabilization laws.

: My neighbor recently said that she had heard that this kind of thing might not stand up in court if challenged. Is this true? She mentioned there was a name for this sort of thing, but she wasn't sure what it was. Can anyone help? I love the apartment and don't want to move!

: Mark Cannistraro

At the time the building was converted to coop, the sponsor (usually owner/landlord when it was rental) owns all the shares to all the unsold apartments, occupied or not. The coop owns the buildings. As the non-purchasing occupied apts become vacant, the sponsor can sell the shares or rent out the now-unregulated apt at market rates. Sometimes he sells blocks of occupied shares to investors (buyers with no intention of living there).

Sometimes the new coop becomes an investor and buys unsold shares from the sponsor to get rid of him: is this what you mean?

Who is your landlord? the sponsor or the coop or an investor?
Did you move in during the conversion or after it was declared effective?

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Comments:
: : For the last 9 years, I've lived in a one bedroom apartment in the West Village. The rent increases, while a bit more than it would have been if the apartment were regulated, were always managable until last year, when the rent jumped 20%.
: : This year, the management company wants another 20%!  

: : My apartment is considered a "co-op," but there is no private owner. Apparently, my building USED to be apartments (my neighbor pays $300 a month) and at some point, the bulding went co-op. The company that owns the building bought the newly available co-ops FROM THEMSELVES and thus are able to avoid the rent stabilization laws.

: : My neighbor recently said that she had heard that this kind of thing might not stand up in court if challenged. Is this true? She mentioned there was a name for this sort of thing, but she wasn't sure what it was. Can anyone help? I love the apartment and don't want to move!

: : Mark Cannistraro

: At the time the building was converted to coop, the sponsor (usually owner/landlord when it was rental) owns all the shares to all the unsold apartments, occupied or not. The coop owns the buildings.  As the non-purchasing occupied apts become vacant, the sponsor can sell the shares or rent out the now-unregulated apt at market rates.  Sometimes he sells blocks of occupied shares to investors (buyers with no intention of living there).

: Sometimes the new coop becomes an investor and buys unsold shares from the sponsor to get rid of him: is this what you mean?

: Who is your landlord? the sponsor or the coop or an investor?
: Did you move in during the conversion or after it was declared effective?


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