Gregory J. Heym
Executive Vice President, Chief Economist
By WILLIAM NEUMAN
They’ll Never Tell
IF Gov. George E. Pataki signs a bill that would make co-op apartment sales prices public for the first time, the boards of many co-op buildings will probably take steps to protect the identity of buyers from prying eyes, according to lawyers and real estate professionals.
Arthur I. Weinstein, a lawyer and the vice president of the Council of New York Cooperatives and Condominiums, said co-op boards might allow buyers to buy apartments in the name of a corporation or a trust as a way of keeping their names out of public records.
That would be a change for many co-ops that still require apartments to be bought by individuals, not by corporations or other entities. For many years that was a legal requirement, Mr. Weinstein said, but a change in tax law in 1986 allowed corporations or trusts to own co-op shares.
Slowly, boards began to adapt, and today there are many that allow such purchases when it benefits the buyer because of tax or estate planning reasons.
But a key element of co-op ownership is being able to control who your neighbors are. So when a trust buys an apartment, Mr. Weinstein said, the board will most likely insist on side agreements that specify who is allowed to live there. It might also require the real buyer to sign a guarantee that maintenance and other charges will be paid.
Mr. Weinstein said the proposed law would probably make those kinds of purchases more common.
“There may be greater pressure to do so, certainly for celebrities who want to maintain privacy or any individual who wants to maintain privacy,” he said. “But in those cases the co-op will have to enter into occupancy agreements to make sure the co-op knows who the occupant will be.”
The bill, which was proposed at the request of city officials, was passed by the State Legislature last month and will be sent to the governor for his signature later this year.
Mary Ann Rothman, the executive director of the co-op and condo council, said that she thought the change was unnecessary and an incursion into privacy. But she added that council leaders had decided not to oppose it, largely because they considered its passage inevitable, since it had the city’s backing.
The change is intended to make the process of determining appraisal figures and property taxes more transparent. By including co-op sales figures in an online database, it will also make more information available to buyers and sellers.
Gregory J. Heym, the chief economist for Terra Holdings, which owns Brown Harris Stevens and Halstead Property, said that buyers and sellers would still need brokers to give them a full picture of the market. A sales price on its own means little, he said, without information about the size or condition of the apartment. And that is still something that most people will have to get from a broker.
Sunday, July 16, 2006