Dreaming of a Basement Playroom or Gym
Rent Control and Domestic Partners, Co-op Gyms and Playrooms; Condo Fees
By: Ronda Kaysen
January 17 2015
The Value of a Gym or a Playroom
I am a shareholder in a prewar co-op with a large basement space that is owned by the sponsor and kept locked. The sponsor is in private negotiations to sell it to one shareholder. Some of us think the co-op should try to buy the space for common use like a playroom or gym. What value does this kind of amenity add over all to a co-op building? Is it advisable for the co-op to negotiate buying this space from the sponsor?
Upper West Side, Manhattan
You are not the first New Yorker to wish for amenities in your building. Many of us would relish the chance to hop on a treadmill or unleash the kids in a playroom without stepping outside on a wintry day. Why else would new condominiums come packed with perks for everyone down to the family dog? In fact, many older buildings have been feverishly revamping common areas so they can compete with new condos.
Your co-op board should review its offering plan to make sure it does not already own the space. It might have been deeded to the corporation back when the corporation was created. If the deed does not exclude the basement, the corporation might have rights to it, which would mean the sponsor does not have the right to sell it.
“The first step is for the board to make sure that the sponsor actually owns, and therefore has the right to sell, the basement space,” said an attorney at Adam Leitman Bailey P.C., a Manhattan lawyer who represents co-op and condo boards.
But if the deed explicitly excludes the basement space and the offering plan spells out that the sponsor owns it, the board could try to buy it. The corporation’s governing documents must give the board the authority to buy commercial space. Look to the co-op bylaws, which frequently restrict how much money a board can borrow or spend. The bylaws might also require a vote, which frequently means that two-thirds of the shareholders would have to support the idea for the measure to pass.
Once the board determines whether it can buy the space, it needs to figure out how much the space is worth. “Talk to an expert in valuation and get an appraisal,” said Paul Purcell, a managing director at William Raveis New York City. Once the finer details are worked out, the board should brace for another pressing decision: treadmill or elliptical? Or both?