Q&A: Brownstone Apartment Merger

Q We’re in the process of purchasing two studios in a small brownstone co-op. Our plan is to combine them into one apartment. How will reducing the number of dwellings in the building affect the overall co-op in terms of taxes, mortgage eligibility, zoning, etc.? Also, who- or what agencies-must be alerted about this project?

—Manhattan Shareholder

A Michael Manzi, an attorney at Balber Pickard Battistoni Maldonado & Van Der Tuin answers Manhattan Shareholder with this advice, “The first step to obtain the cooperative’s consent to the combination. In most cases, consent may be given by the cooperative’s board of directors. Under the proprietary leases for the apartments, the board of directors will most likely have the right to approve the actual alteration plans as well. The combination of the apartments and approval of the plans are usually given together. Most cooperatives document this consent and approval by entering into an alteration agreement with the shareholder.

“Once the alteration has been approved by the cooperative, it is necessary to file the work with the New York City Department of Buildings. Your architect, through the so-called “Alt-2” process, would do the filing. This process is not as involved as other filings since it allows for self-certification by the architect. Under current standards, the combination would not require amendment of the building’s certificate of occupancy, and, therefore, should not involve zoning issues. You would, of course, have to comply with all of the normal, rules regarding the construction itself, including, for example, fireproofing and egress.

“Whether or not the combination would pose any problems under the building’s existing mortgage should be determined by reviewing the mortgage’s particular provisions. In some circumstances, the combination may require the mortgagee’s consent. You should also be aware that if combinations reduce a co-op to only a few units, the number of lenders available to refinance its mortgage might be diminished.

“Finally, the combination could, in theory, result in an increase in the co-op’s property tax, but we have not seen such a result or at least one that could be documented.”

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