New York Real Estate: What Is A “Sponsor Unit”?

What is a Sponsor unit?

A Sponsor apartment is a unit owned by the original owner or corporation responsible for converting a building from a rental into a cooperative ownership.

The Sponsor may still have an original (regulated) tenant occupying the apartment who did not purchase the apartment during the original conversation (rules allowed the tenant to stay) from rental to cooperative ownership. Also, a Sponsor unit may no longer have an original (regulated) tenant but a fair market tenant. If a Sponsor unit has been vacated by an original regulated tenant and possession transfers to the Sponsor, they can either rent it at fair market or sell the apartment at anytime without restrictions.

What are the advantages of buying a Sponsor apartment?

The biggest advantage of purchasing a Sponsor unit is that the buyer does not have to go through the dreaded co-op board approval process (comprehensive application and personal interview).

In many cases, buyers may have the option of bypassing typical building rules such as the required amount for down payment. A Sponsor might allow financing up to ninety-percent of the purchase price, bypassing the Cooperative’s more stringent requirement. If the buyer is paying all cash, the transaction from contract to closing can take place quickly, unlike a board approval process which may take several months.  In addition, in most cases application and other co-op process fees are waived.

Are there additional costs when of buying a Sponsor apartment?

Yes. The Sponsor almost always has the buyer pay the NYC and NYS transfer taxes.

A purchase price $500,000 and under

NYC RPTT = 1% NYS RPTT = $2 per $500 or portion thereafter

A purchase price $500,001 and above

NYC RPTT = 1.425% NYS RPTT = $2 per $500 or portion thereafter

 
The Barshay Team
Barshay Brokerage Real Estate Group, LLC
Ph: 212.645.8866  -  Fax: 212.645.8809
275 Seventh Avenue 7th Floor
New York, NY 10001
www.barshay.com

 

Real Estate Glossary |  Search All Listings |  Are Banks Lending? |  NYC Building Descriptions |  Real Estate Glossary |  F.A.Q's |  Pre-Qualify Now |  How Large A Mortgage Can I Afford? |  Room Design Planner |  Home |  Welcome |  Welcome To the Financial Center |  1031 exchange |  Awards & Links |  NYC Condo, Co-op, Townhouse Closing Costs |  Local Schools |  Local Weather |  NYC Area Info |  Rental Application |  Our Philosophy |  Send Link to a Friend |  Certified Real Estate Brokerage Manager-CRB |  8 Steps for getting your Finances in Order |  Reasons to Purchase |  Steps to Prepare For Purchasing |  Tips For Buying In a Tight Market |  Co-op and Condo Info |  Seller Closing Articles-2 |  What is an Appraised Value ? |  Understanding Capital Gains in RE Tax |  Tips For Packing Like a Pro |  How Large a Mortgage Can I Afford? |  Professional Affiliations |  Budget Basic Worksheet |  Moving Tips For Sellers |  12 Financial Articles & Loan Information |  Understanding Agency |  Ways to Speed Up Your Sale |  Different Type of Leases |  NYC Building Descriptions |  12 Financial Articles & Loan Information |  Press |  Link to Me |  Union Square History |  NYC Neighborhood Virtual Tours |  Link Directory |  Gramercy Park History |  Lowes: News You Can Use |  Room Design Planner |  Living in Lower Manhattan |  Green Advice & Energy Savings Tips |  33 Greenwich Avenue Building Specialist |  What Is A Sponsor Unit? | 

LinkUAgent - Link Partner

LinkUAgent Partner

      Real Estate Directory    This site and www.realestateabc.com are partners in providing information and resources to real estate consumers.         RealEstateYellow.com - Real estate Yellow page and real state directory
    REALS.COM - #1 Real Estate Directory
REALS.COM - #1 Real Estate Directory    
Powered by LinkURealty - Real Estate Web Design & Websites