Land-lease co-ops in Queens

Which co-op buildings of this kind are actually in Queens?

• Garden and tower cooperative complexes in Flushing, Hollis Hills and Whitestone, which is where the Ground Lease Co-op Coalition places the borough’s concentration
• Large multi-section complexes where each section is its own cooperative corporation holding its own lease, so two apartments across a courtyard can sit on entirely different terms
• Bayside, where the nine sections of the Bay Terrace cooperative bought out their ninety-nine year land leases from the ground owner across 2017 and 2018 and are no longer leasehold at all
• Buildings whose leases were written when northeastern Queens land was worth a fraction of what it is worth now, which is what makes a reset material rather than academic

What do board approval and financing look like in Queens?

• Remaining lease term against loan term is the threshold question, and a term expiring inside a thirty-year loan is frequently declined outright
• Because Queens carries the largest concentration of this stock, local lenders and appraisers meet the structure regularly, so the file tends to move faster than the same file in a borough where it is rare
• A reset scheduled inside the loan term is underwritten as payment shock, because the increase passes through as maintenance
• Where a complex is negotiating to buy its land, lenders want to know how a purchase would be funded, because an acquisition loan taken by the corporation also reaches the shareholder through maintenance

Which taxes and recording steps apply in Queens?

• No mortgage recording tax and no recorded purchase instrument, the same as any co-op
• New York State transfer tax and the New York City real property transfer tax apply to the share transfer
• Ground rent runs through maintenance rather than appearing as a tax line at closing
• Judgment and lien searches run against Queens County records, and the co-op lien search reaches the corporation itself

What pattern does a purchaser meet in Queens?

• Ask which section of the complex the apartment sits in, because in a multi-section complex the lease, the remaining term and the reset date belong to the section rather than to the development
• Read what happens at expiry before anything else: renewal terms, a purchase option, or surrender of the building are three very different futures
• A purchase option in the lease is worth more here than almost anywhere, because Queens complexes have actually exercised them
• Maintenance in a leasehold building is not comparable to a fee-owned Queens co-op at the same price, because it carries ground rent as well as operations

What else should you read before closing on one of these?