Connect with us

Real estate

REAL ESTATE MATTERS: Board member seeks approval for change in documentation – Business – News Chief



Q: I am on the board of a condo association and it was brought to our attention by a past owner who was selling his unit that a potential buyer noticed that the par value noted in the governing documents of our association did not match that in the multiple listing services in our local tax assessor’s tax base.

Upon review, we found that the three penthouse units in our complex were incorrectly drawn in the plats. One of the units is way off on its square footage. This was the first time it was brought up since our condominium building was put up.

We engaged an attorney to review our docs and tell us what would be needed to correct the mistake. We need 90% approval to change the par values. The three impacted units have subsidized the other 11 units over the past 15 years, and the owners of these three units no longer wish to continue this. We are also concerned that this error will limit potential buyers for our units due to the increased fee level.

We are now waiting on a proposal from the surveyor who has our original drawings. We have spent about $10,000 to date on this issue and expect the total amount we will spend to be less than $15,000. We believe it is a gross error that must be corrected now that it has been brought to our attention. If the owners vote to not support the changes and additional money needed to correct the errors, can one or all of these three owners sue the association and any board member who may also vote no?

A: You have an interesting situation on your hands. We need to clarify one thing for you and our readers from your question: When you own a condominium in a building, you own the interior of your own unit and you also own a certain percentage of the condominium’s common areas along with all of the other owners.

This type of ownership is different from owning a single-family home, where you know the dimensions of the lot you own along with the home that sits on that land.

Let’s say you have a 10-unit condominium building with all units being identical. You’d assume that each owner would own 10% of the building and land for the association and that each unit would pay 10% of the assessments needed to run the association.

Unfortunately, the method of computing the percentage ownership in an association can be quite complicated. In some places around the country, the percentage given to a unit will determine the real estate taxes paid on that unit as well as the percentage of assessments that will be charged to that unit. When this situation comes up, developers may base the percentage ownership on the initial sales prices given to the units.

Let’s say in our example that we had 10 identical units, but one unit was on the ground floor and one unit was on the 10th floor. The 10th floor unit might be more desirable and worth more than the ground floor unit even though they have the same square footage. Well, if real estate taxes are based on the value of the unit, the 10th floor unit will likely be assigned a much higher percentage ownership than the first floor unit.

We don’t know the method used to determine the percentage ownership for the units in your building, but frequently you need a unanimous vote to change those amounts in the governing documents of the association. In certain cases, where it was clearly a typographical error or other mathematical error, you might have the right under the governing documents to make a change to correct that error. However, we don’t know whether the differences you mention are typographical errors or whether the developer intentionally set the numbers that way.

The square footage of the units in your building could be one of the factors to determine the ownership percentages for each unit, but even the square footage number can be a complicating factor. The penthouses in your building may have interior square footage and exterior square footage, in the way of a balcony or rooftop rights. We don’t know if the developer intended to include the entire square footage in computing each unit’s ownership interest in the building.

As you can see, we suspect your issue is not cut and dry and we can even say that the numbers could, perhaps, be correct as written in the document if the developer intended the numbers to differ with actual square footage numbers. We know of several instances where the developer of a property decided to live in one of the units (the largest unit with an attached parking space, in one particular example), but assigned himself a lower percentage of the total than you would otherwise expect in order to pay less in property taxes. There are all sorts of unintended consequences that can come from a decision like that.

Having said that, if there is a law or rule that requires developers in your area to compute the percentage ownership in a certain way and it was done improperly, you may have a case on those grounds. So, you should ask the attorney you hired to figure out what the law is in your state regarding this issue and get an opinion as to whether it was done properly.

Finally, if every owner agrees on a change in the documentation, you may then have an agreement that you can put in writing, but we suspect that those units benefiting from the lower assessments won’t be eager to pay more. Good luck.

Contact Ilyce Glink and Samuel J. Tamkin through her website, (c) 2020 Ilyce Glink and Samuel J. Tamkin

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Real estate

County’s real estate reassessment to begin this month | Nvdaily




Appraisers expect to begin Shenandoah County’s next real estate reassessment later this month.

Gary Eanes, of Wampler-Eanes Appraisal Group, told county supervisors during last week’s Board of Supervisors meeting that his firm, which has a main office in Daleville in Botetourt County, planned on establishing an office in Woodstock this week with the intent of beginning field work on the newest reassessment during the third week in August. The reassessment will take effect on Jan. 1, 2022.

Shenandoah County’s last reassessment, also done by Wampler-Eanes, took effect on Jan. 1, 2016. State code requires that counties with a population of less than 50,000 perform reassessments no less frequently than every six years.

Eanes, during his presentation last week, said the first step of the reassessment would be a comprehensive field study. He noted that he expects the field work to take 12 to 14 months to complete, after which property owners will receive notices regarding their new reassessment and will have the opportunity to make an appointment with appraisers to go over any concerns.

“We’ll start about the third week of August knocking on doors and visiting properties and we’ll probably start right in Woodstock,” Eanes said.

During the process, Eanes said, the county will be divided up into “smaller market areas such as Strasburg, Woodstock, Edinburg, just to name a few,” and those market areas would not be compared to each other for the purposes of the reassessment.

He added that Wampler-Eanes would use “all three approaches” – cost, sales and income (in the case of apartments and retail stores) –  when assessing property values.

“Our goal throughout the whole process is to acquire accurate appraisals and equitable assessments,” Eanes said. “Basically, we want to ensure that the tax burden is distributed correctly across the board. If you live in a $100,000 house, you need to pay taxes on a $100,000 house versus someone that’s in a million-dollar property. It needs to be fairly distributed and the only way to do this is to do appraisals.”

Shenandoah County budgeted $340,000 for the hiring of an independent firm to perform the reassessment in the fiscal year 2021 budget that took effect on July 1.

Continue Reading

Real estate

Cuomo signs bill, sparked by Newsday, to fight real estate discrimination




ALBANY — Gov. Andrew M. Cuomo signed a law Monday, sparked by a Newsday investigation, targeting real estate discrimination by allowing the state to suspend or revoke agents’ licenses.

The state already has authority to suspend a broker’s license for fraudulent practices and other causes. The new law adds another cause: “Violation of the human rights law,” a reference to the state’s anti-discrimination statute.

The real-estate legislation comes following a Newsday special report, “Long Island Divided,” which found evidence of widespread unequal treatment of minority communities and minority homebuyers. Covering three years, the findings included evidence that potential homebuyers were steered to neighborhoods based on race and that agents in some cases required preapproval for mortgages from black customers but not white ones.

The governor cited the Newsday report — and its “deeply troubling findings” — in his decision to sign the law.

“We have zero tolerance for discrimination of any kind in New York and the sheer scope and breadth of the unscrupulous and discriminatory real estate practices uncovered on Long Island is repugnant to who we are,” Cuomo said.

The legislation was sponsored by two Long Island Democrats, Sen. James Gaughran (D-Northport) and Assemb. Kimberly Jean-Pierre (D-Wheatley Heights).

“This law will provide teeth to the enforcement of New York’s Human Rights Law and ensure that real estate agents cannot engage in racist practices like “steering” that deny families the dignity of choosing their home and neighborhood,” Gaughran said.

Jean-Pierre said: “This legislation will help ensure that we are protecting every New Yorker’s freedom to choose where they want to call home and build a future for themselves, regardless of the color of their skin.”

The governor also on Monday signed into law a bill to extend the deadline for filing lawsuits for decades-old sexual abuse claims until Aug. 14, 2021, a one-year extension triggered by the coronavirus pandemic.

Originally approved in 2019, the law suspended the statute of limitations for filing sexual abuse claims and created a one-year special “look back” window, ending Aug. 14, 2020, to file lawsuits.

When the pandemic hit and courts largely shut down around the state, alleged victims and attorneys began lobbying to extend the deadline. Cuomo, using emergency powers, first extended it five months. Then, the state Senate and Assembly approved a bill to make it a full year.

Assemb. Linda Rosenthal (D-Manhattan) said filing such lawsuits is complicated and many people feared the “clock would run out” on their ability to sue because of the pandemic.

“Extending the CVA window was necessary before COVID-19 because survivors needed more time. COVID-19 made it a moral and legal imperative,” Rosenthal said.

Since August 2019, 3,118 lawsuits have been filed under the Child Victims Act, according to the state Office of Court Administration. That includes 181 in Nassau County and 69 in Suffolk.

Continue Reading

Real estate

Bain Capital Real Estate Sells Durham Office Property for $138M




Durham.ID. Image courtesy of Longfellow Real Estate Partners

Longfellow Real Estate Partners has paid $138 million to achieve full ownership of Durham.ID, a mixed-use office asset in Durham, N.C. The project is the first phase of the broader Durham Innovation District, a 1.8 million-square-foot development consisting of offices, lab, retail and residential space. Its sale marks the largest office investment transaction in the Southeast since the beginning of the COVID-19 pandemic.

READ ALSO: Top 10 Office Projects Under Construction in North Carolina

The previous owners included Longfellow and Bain Capital Real Estate, which was represented by JLL in the sale. A Longfellow representative told Commercial Property Executive that the company recapitalized the project and rolled it into an affiliate of its Longfellow Strategic Value Fund.

Durham.ID. Image courtesy of Longfellow Real Estate Partners

Located at 200 and 300 Morris St., the two-building office development offers a total of 330,369 square feet split into approximately 25,000-square-foot floorplates, the Longfellow spokesperson told CPE. Completed in November 2018, Durham.ID offers an outdoor courtyard, collaborative spaces, curated events and programming through Longfellow’s proprietary platform Elevate, and an eight-story parking facility with 1,225 spots, according to the spokesperson. Both buildings were able to achieve LEED Gold certification through its smart technology construction, installation of heat-reducing glass windows and other energy saving features.

The Longfellow spokesperson also told CPE that the Durham.ID office space is currently 83 percent occupied, while the company is in ongoing discussions with multiple prospective retail tenants for its 20,380 square feet of ground-floor space. In October, Longfellow secured another tenant for Durham.ID through a 25,000-square-foot lease with fintech company Spreedly.

Major mixed-use district

Longfellow is the owner and developer of the 1.8 million-square-foot Durham Innovation District, which will take several more years to complete. The project stretches 15 acres and includes 1 million square feet of new office and lab space, retail options, residential and hotel properties, as well as open space areas. Longfellow has found major tenants including Duke University, Duke Clinical Research Institute and Duda | Paine Architects, among others.

Continue Reading