One of the main documents governing the majority of New York City's co-op buildings is the antithesis of the well-known Oldsmobile ad: it is your father's proprietary lease, and many of its parts are not exactly of-the-minute. Sponsors of most New York co-op buildings modeled their proprietary leases on a document that dates back to the 1970s, and although the detailed provisions of the lease vary from one co-op to another, on the whole, they are rather uniform - in some respects, according to many in the industry, uniformly in need of an update.
This leaves co-op boards with two choices, says Marc Luxemburg, president of the Council of New York Cooperatives and Condominiums (CNYC), summing them up by analogy. "You either keep repairing the car and getting new parts, or get a new car," he says.
Most real estate attorneys agree that the current lease is antiquated, but there is debate as to whether it's best to go forward making repairs (or amendments) as needed, or to junk the old document and begin anew.
Luxemburg is the co-drafter of a modernized proprietary lease that was officially adopted by the CNYC this summer. "On a drafting level, there isn't a clause in the old lease that couldn't stand some improvement," he says. "But it's only about 20 to 25 percent of the old lease that is in need of drastic revision."
Other industry pros beg to differ. Marcie Murray, a partner at Manhattan law firm Deutsch Tane Waterman & Wurtzel, opposes the adoption of a new lease. " I don't view its creation as a major improvement over the existing lease, with which cooperative attorneys are so familiar," says Murray. "Each cooperative is entitled to a lease tailored to its situation. Many cooperatives are now amending - or have already amended - certain lease provisions they've found most in need, and have a good working document. I have not yet had a client who is willing to pay for the detailed review of the "˜new' form of lease (as compared to the standard form), without which no responsible attorney could recommend its adoption."