DHCR alters policies for incoming & transferrin

Posted: May 26 2012 at 5:51pm | Views: 12202

The New York State Division of Housing and Community Renewal (DHCR) has issued new guidelines for Riverbay to implement immediately which will affect outgoing and transferring Riverbay Coop City shareholders.

Going forward, outgoing Co-op City Riverbay shareholders
will be responsible for the payment of carrying charges for up to 90 days from the date they surrender their keys, or until the apartment has been sold, whichever is earlier, as set forth in DHCR’s regulations at 9
NYCRR § 1727-5.2(b)(7).

Riverbay’s prior policy required outgoing Co-op City shareholders to pay their carrying charges until lease expiration or until the apartment was sold, whichever is earlier.

The new guidelines also specify that whereas Riverbay’s prior policy as set forth by the Riverbay Board of Directors requires transferring Co-op City shareholders to pay the equity for the new Co-op City apartment that they are moving to at the same rate at which they paid equity at the time of their original admission to the
development. To assure that all Co-op City shareholders are treated equally, DHCR now requires all transferring shareholders to pay the current equity of $4,500 per room for the apartment that they are transferring to.

According to correspondence sent to Riverbay’s management by DHCR’s Assistant Commissioner Richmond McCurnin, “Procedurally, the current equity payment will need to be paid in full at the time they take possession of the Riverbay Co-op City unit and the refunded equity, less restoration charges, can only be paid upon the restoration and resale of the vacated Co-op City unit.”

Consequently, DHCR disapproved of Riverbay’s prior policy of requiring transferring Co-op City shareholders to accept their new Co-op City apartment “as is,” with the incoming shareholder paying for the restoration and refurbishment of the new Riverbay Co-op City apartment.

As a result of this, DHCR directed Riverbay “to refurbish and restore all Co-op City apartments to be transferred to existing cooperators or to be assigned to new cooperators moving into the Co-op City cooperative development for the first time.”

Based on this new DHCR directive, Riverbay will incur the added cost to restore the apartment for the transferring cooperator, however, the payment of full equity at the current $4,500 per room rate will help defray this expense. When Co-op City apartments were provided to transferring shareholders in an “as is” condition, Riverbay incurred minimal costs to get the apartment ready.

The Riverbay Finance Department points out that transferring Riverbay Co-op City shareholders will be eligible for the deferred equity program which was implemented by the Riverbay Board last year whereby they can put down 25% of required equity (at $4,500 per room) at closing and pay off the balance over a 7-year period with a small deferred premium added in.

DHCR also mandates the Riverbay Co-op City housing company to set aside three out of every four available Co-op City apartments for internal transfers, as set forth in the state regulations at 9NYCRR §1627-1.3(a).

Regarding apartment preference both for internal transfers and new admissions to the Riverbay Coop City development, DHCR notes that applicants will be able to indicate certain preferences, e.g., for a specific size Coop City apartment, a particular area of the Coop City complex, or for a higher or lower floor, at the time of their application. However, any changes in preferences after their application is submitted, but prior to the time that an apartment is offered, will result in their application being placed at the bottom of the waiting list which reflects the new preference.

The only exception to this rule will be for applicants who request a change in the size of the Co-op City apartment they desire based on a change in family composition. In these instances, the applicant will maintain their place on the waiting list.

“In order to ease the administration of the waiting lists, Riverbay will keep the allowable preferences to a minimum, and requests to use preferences other than those
set forth above must be submitted to DHCR for its approval within thirty days of the date of receipt of this letter,” the DHCR directive read.

DHCR also directed Riverbay to cease charging shareholders the reserve fee of 50 cents per room, per month for the first 31 months of residency. This reserve fee was established back when Co-op City was first occupied to provide the housing company with a fund to be able to buy back Coop City units that could not be re-sold due to construction defects.

Riverbay can also no longer impose a 50% surcharge on the carrying charges (or on use and occupancy) paid by a succession applicant from the date they submit their succession application until the succession application has been finally approved or disapproved by DHCR.

Instead, the DHCR directive states: “Riverbay will accept income affidavits from succession applicants instead of rejecting them, and then imposing the 50% surcharge for failure to file. In the event of any discrepancies or other issues, Riverbay will write a letter to the cooperator or applicant.”

Addressing Riverbay leases, the DHCR correspondence noted that Riverbay is not currently using the standard DHCR lease. Riverbay, however, has agreed to compare its lease with DHCR’s form and notify the agency of the differences between the two forms of lease. In addition, the two entities will further discuss ending the practice of offering short term leases and moving to a system whereby a proprietary lease will be executed upon a shareholder taking occupancy with some other methodology that reflects changes and amendments to the original lease.

This, DHCR points out, should result in significant savings and reduction in administrative costs to the Riverbay Coop City housing company.

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