Brooklyn Real Estate Q&A and Info

One thing that’s important to understand when you’re buying a Co-op apartment is that you are not purchasing Real Estate, you are purchasing shares in the Co-op Corporation.   The allotted shares represent the unit you are going to move into.

In a typical home purchase, the house itself is put up as collateral for the mortgage loan, but in a loan to acquire a co-op apartment, the shares are put up as collateral.  One of the things your lender will do to insure that their interests are protected (in other words, that they’ll get their money back) is require that they receive a Recognition Agreement from the Co-op.

The Recognition Agreement states that the Co-op Corporation must inform the lender in the event the shareholder seeks additional financing or fails to make monthly maintenance payments.  The Recognition Agreement is signed by the borrower, a representative of the co-op corporation and a representative of the lender.  

It depends.  When you purchase a co-op apartment, you are not actually purchasing the physical space, you’re purchasing the shares of the corporation that are associated with the unit.   Because you don’t own the apartment outright, your ability to rent, or sublet, your apartment depends on the rules set out by the corporation. 

Many co-ops require that you live in the unit for a certain amount of time before you’re eligible to sublet it, typically one year. There is usually a sublet fee imposed on the shareholder for subletting. Many co-ops also limited the amount of time that you can sublet the apartment before you’re required to either move back in or sell the unit.

There are many nuances associated with owning a co-op, some good, some bad. That’s why its so important that you, or your attorney, thoroughly reads the Proprietary Lease, the House Rules and the Board Meeting minutes before you sign on the dotted line.

Clinton Hill Co-op Apartments – A Jewel In Brooklyn

If you are looking to purchase an apartment in the $300,000 – $475,000 range in Brooklyn, I highly recommend you take a look at the apartments available in the Clinton Hill Co-ops, which has two campuses on Clinton Avenue between Myrtle Avenue and Greene Avenue. There are so many reasons that purchasing at the Clinton Hill Apartments is a wise investment, but here is a list of just a few:

1. The apartments are large, with good sized closets. One bedroom apartments are approximately 850 Square Feet!
2. All of the apartments have large windows that let in a lot of light, and many of them have fantastic Manhattan views.
3. The co-op has strong financials and a large cash reserve.
4. Apartment values have tripled in the last 7 years.
5. There is 24 hour security and maintenance, as well as onsite laundry facilities.
6. Storage and Parking available.
7. The co-op has a dedicated board that meets all requirements for shareholder meetings and handles it fiduciary responsibility of making sure all of the co-ops bills are paid.



8. The co-op is located in a section of Brooklyn that is just minutes from Manhattan. (I’ve been able to reach 34th street in Manhattan is less then 30 minutes).
9. The Clinton Hill/Fort Greene area has many restaurants and shops, with more and more opening every month.
10. Clinton Hill Co-ops is located on one of most beautiful streets in downtown Brooklyn, namely Clinton Avenue, which has been called “Mansions Row” because of all the historic mansions that line the tree line street.
11. The neighborhood is diverse and has a little bit of a small town feel in the heart of the big city.
12. For you pet lovers, Clinton Hill Co-op is pet friendly. Dogs and cats are welcome.

Have I convinced you that Clinton Hill Co-ops is a fantastic place for you to look for a new home? If you would like to see what apartments are available at the co-op for sale, click here.

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A Flip Tax, which is better described as a “transfer tax”, is monies paid to the cooperative by the seller once a coop apartment is sold (or the transfer of ownership occurs).   A coop’s flip tax, if it has one, will be spelled out in the cooperatives offering plan, and can be a flat fee, a per share amount or a percentage of sales.  For example, a coop that has imposed a 5% percentage of sale flip tax, would collect $15,000 at closing from the seller on a $300,000 sale.

Why do coops charge flip taxes?  Well, its a great way to collect money to fund the coop ’s reserve funds so that the corporation has monies available for any necessary capital projects that arise without having to access the shareholders, or increasing the coop’s debt service by taking out a loan.

Flip taxes are a necesary evil that you have to take into consideration when you purchase a coop.