1. © 2013 All rights reserved. Chapter 6.2 Development1 New York Real Estate for Brokers, 5th e By Marcia Darvin Spada Cengage Learning

2. © 2013 All rights reserved. Chapter 6.2 Development2 Chapter 6 Construction and Development Part II: Development

3. © 2013 All rights reserved. Chapter 6.2 Development3 Chapter 6 Key Terms  Amperage  Area variance  Article 9-A of the Real Property Law  Blueprint  Building code  Building permit  Building specifications  Certificate of occupancy (CO)  Circuit breakers  Completion bond  Condemnation  Cumulative zoning  Defect  Due diligence  Eaves  Eminent domain  Exclusive-use zoning  Flashing  Footing  Joist

4. © 2013 All rights reserved. Chapter 6.2 Development4 Chapter 6 Key Terms (continued)  Outlots  Percolation  Pitch  Platform construction  Police power  Property condition disclosure (PCD)  Rafters  Regulatory taking  Sheathing  Sill plate  Slab-on-grade foundation  Special-use permit  Spot zoning  Steep slope  Subdivision  Subdivision regulations  Use variance  Watts  Wetlands  Zoning ordinance

5. © 2013 All rights reserved. Chapter 6.2 Development5 Zoning Ordinances Zoning Transfer of development rights Sale of development credits Zoning permit Construct or alter a building Incentive zoning Floor-to-area ratio Cluster zoning Multi-use zoning

6. © 2013 All rights reserved. Chapter 6.2 Development6 The Subdivision Acquiring the site Usable Square footage Completion bond Local planning board approval Impact fees OutlotsDedication PUDs and zoning

7. © 2013 All rights reserved. Chapter 6.2 Development7 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

8. © 2013 All rights reserved. Land Includes:  types of soil  location of wetlands, springs, floodplains  forest areas  rocks, trees, vegetation A major characteristic of land is its immobility Chapter 6.2 Development8

9. © 2013 All rights reserved. Functions of Planning Boards Functions {related to real estate} Preparing and amending master plan for community Implementing master plan Making investigations maps & reports relating to planning & developing Recommending amendments to the zoning ordinance or map Chapter 6.2 Development9

10. © 2013 All rights reserved. State Environmental Quality Review Act  Due diligence reviews  Environmental Impact statements  The lead agency coordinates the action  Mandates environmental assessments Chapter 6.2 Development10

11. © 2013 All rights reserved. Zoning Board of Appeals  Interprets the zoning ordinance  Grants use and area variance  May grant special use permits Chapter 6.2 Development11

12. © 2013 All rights reserved. Chapter 6.2 Development12 Zoning Actions Zoning Board Of Appeals Special Use Permit Spot zoning Variance

13. © 2013 All rights reserved. Chapter 6.2 Development13 A Purchase Money Mortgage

14. © 2013 All rights reserved. Chapter 6.2 Development14 Private Land Use Control Easements Deed restrictions Subdivision regulations Liens

15. © 2013 All rights reserved. Chapter 6.2 Development15 Condos and Coops CC ondo-title transferred by deed CC oop- title transferred through shares of stock

16. © 2013 All rights reserved. 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 Chapter 6.2 Development16

17. © 2013 All rights reserved. What are Shares of Stock? T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 Chapter 6.2 Development17

18. © 2013 All rights reserved. Cooperative Board Application and Interview Preparation Before Scheduling Interview Consider Co-op Board Application Interview Prep The Role Of Time Familiarize Purchaser Package for Discussion purposes Need for total disclosure By purchaser During 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. Chapter 6.2 Development18

19. © 2013 All rights reserved. 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 Chapter 6.2 Development19

20. © 2013 All rights reserved. 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 Chapter 6.2 Development20

21. © 2013 All rights reserved. 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 Chapter 6.2 Development21

22. © 2013 All rights reserved. Documents Needed for the Sale/Purchase of Cooperatives Proprietary Lease Stock Certificate Offering Plan House Rules Alteration Agreements Chapter 6.2 Development22

23. © 2013 All rights reserved. Offering Plan Size of unit The floor plans The construction The size and materials The plans of recreation buildings The make and model of appliances The scope of the landscaping The land on which condominium is located Chapter 6.2 Development23

24. © 2013 All rights reserved. Offering Plan Amendment : New Development oNew building and after 90-day tenant’s exclusive period in a converted building osponsor 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 Chapter 6.2 Development24

25. © 2013 All rights reserved. Offering Plan Amendment: Building Conversion NYS law When 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 Chapter 6.2 Development25

26. © 2013 All rights reserved. Difference Between a Condop, Condominium, and Cooperative Apartment A condop is a building that includes condominium and cooperative ownership in 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. Chapter 6.2 Development26

27. © 2013 All rights reserved. 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 Development27

28. © 2013 All rights reserved. Chapter 6.2 Development28 A Condo and Coop Closing Compared CondominiumCooperative Type of transaction Fee simple ownership Personal property; shares of stock Transfer documents Deed Proprietary lease Taxes at closing NYS transfer tax NYS transfer tax; flip tax

29. © 2013 All rights reserved. Closing Costs Real Estate Tax Deductions Right of First Refusal Mortgage Recording Tax Mansion Tax Common Charges Chapter 6.2 Development 29