Why Some New York City Co-op Sales Are Missing From ACRIS

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In the course of writing several recent pieces about co-ops, I have learned some interesting things about them.

These facts had somehow escaped me despite 56 years of living or covering real estate in New York City, the motherlode of residential co-ops.

One that jumped out at me: Co-op unit sales — which are actually sales of shares — were not recorded in ACRIS, the city’s property records database, prior to 2003. Sales in HDFC co-ops are exempt from transfer taxes, so they still need not be recorded in ACRIS.

This made it difficult for me to investigate the bizarre history of unit transfers at 123-25 East 102nd Street in East Harlem. Actually, it would have been impossible if not for attorney Gregory Byrnes’ having subpoenaed the co-op’s records, which showed insiders passing units back and forth like baseball cards.

I asked Adam Plotch, a veteran of co-op foreclosure auctions, how title insurers can verify the chain of ownership if the records are kept not in a public database or municipal office but in the dusty file cabinets of the co-op. The answer was, title companies don’t necessarily rely on public records for co-op deals.

“An original stock certificate and proprietary lease is immutable proof of ownership,” he replied. “A co-op will not issue a stock [certificate] and lease to a new owner until the old one is canceled. They also will not allow [them] to be transferred unless their own records reflect that the transferor is, indeed, the sole owner of the shares.

“So if you have a stock and lease in your possession, and you couple that with the records of the co-op, it’s as clear a record as any of valid ownership.”

The system seems archaic to me. What would happen if fire destroyed a co-op’s records and shareholders’ stock certificates? How would anyone know who owned what?

But I don’t want to single out co-ops. Records of real property transfers could also use modernization, as revealed by frequent reports of deed theft and fraud.

“A nefarious or sloppy owner of real property can, in theory, execute multiple deeds to the same property to multiple persons,” Plotch noted. “This actually happens — and there’s statutory and case law that determines how such conflicts are resolved: The first person to record his deed in the land records is deemed to be the owner.”

What we’re thinking about: Yiatin Chu and I have had our differences on X, but I couldn’t argue with her post on being a landlord in New York City: “This is what happened to my relatives. The renter subletted to someone who didn’t pay. The squatter knew how to play the court system to delay. It took 3-yrs to evict. They won’t get the $80k in unpaid rent and the tenant destroyed the place. It cost $70K to gut renovate. Many small property owners fear these situations and rather take their units off the market.” Send thoughts to eengquist@therealdeal.com.

A thing we’ve learned: A Chicago judge is considering ordering tenants relocated from a violation-ridden building. In New York City, tenants aren’t evacuated unless their building presents an imminent danger — because with the city’s 1.4 percent vacancy rate, there is nowhere for them to go.

Elsewhere…

An update on an item I wrote last week about a new state law banning algorithms that allow landlords to collude on rents:

The Real Estate Board of New York sent a statement explaining its strident opposition to the bill.

“Attempting to prevent collusion is laudable, but this legislation goes beyond regulations in other states, to the point of banning evaluation of public data outside of a property owner’s portfolio when considering rents,” said REBNY President Jim Whelan. “We believe more transparency and market analysis most often benefits the consumer and this bill will lead to unintended consequences like higher rents and reduced market efficiency.”

That’s quite a contrast to this tweet by Jay Martin of the New York Apartment Association, which represents rent-stabilized owners (and doesn’t always see eye-to-eye with REBNY):

“We spent 0 time and energy opposing this bill. Why? We couldn’t find any members that use ‘algorithms to collude and raise rent.’”

With trademark sarcasm, he added, “Congrats though. Eventually we’ll get around to policy solutions that will make housing more affordable.”

Closing time

Residential: The top residential deal recorded Tuesday was $5.8 million for a 2,500-square-foot condominium at The Caledonia at 450 West 17th Street in Chelsea. Joseph Pullen and Taylor Durland with The Corcoran Group had the listing. 

Commercial: The top commercial deal recorded was $170.3 million for the Dominick Hotel at 246 Spring Street in Soho. The hotel has 46 floors and 391 rooms.  

New to the Market: The highest price for a residential property hitting the market was $18.5 million for a 4,689-square-foot condominium at 65 West 13th Street in Greenwich Village. Noble Black, Connor Cuccinelli and Cory Cahlon with The Corcoran Group have the listing. 
Matthew Elo



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