Co-ops in small buildings may face stormy seas

(Flickr photo by Steve Babb)

There are many advantages to buying a co-op in a small building, among them:

• Being well acquainted with your neighbors;
• Generally low maintenance fees;
• Scale that is desirable to many of its residents;
• Numerous opportunities to participate meaningfully as a volunteer in a diminutive community;
• Application procedures that may be less onerous than in larger buildings.

However, some buyers see the disadvantageous side of the coin:

• Having neighbors who make too many demands on you — being called upon to provide services ranging from babysitting to package acceptance and providing company;
• Diminished privacy;
• Necessity of shouldering burdens that can include board service, property management and hallway cleaning;
• Too many meetings.

But the list of concerns is even longer, as friends of mine — Terry Karush Rogers’ BrickUnderground and Sandy Mattingly, who blogs as Manhattan Loft Guy — have pointed out.

The BrickUnderground post considers the problem of a shareholder who learns that the board’s treasurer has skimmed $25,000 from the building’s bank account.

That is only part of the problem.  The shareholder’s bigger concern is that the other board members won’t do anything about the actions of their longtime neighbor.

For his part, Sandy has blogged about deadbeat owners and the burdens they place on small buildings, the excessive costs on individual shareholders when small buildings encounter major structural issues, and the difficulties such buildings face meeting mortgage underwriting standards.

Living in a small building obviously means a level of intimacy that can provide a benefit on one hand but a heartache on the other.

Whether the risks outweigh the rewards is up to the individual buyer.  What frequently settles the matter in brownstones and other townhouses lacking elevators is prices that tend to be lower than in bigger buildings.

As I never tire of repeating, no buyer at any price point manages to avoid compromise.

Tomorrow: Terms of Inspection

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

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