Renovations of individual co-op apartments have become increasingly common and complex, as many people have chosen to stay in their apartments as their families expand, rather than buying houses in the suburbs. As a result, many families have bought two and sometimes three apartments in one building and have decided to combine them in order to acquire the space that they need. These renovations are sometimes multi-million dollar affairs. In some co-op buildings, half the apartments are combined apartments.
When purchasing such apartments, it is important to verify that they have been "legally" combined. One cannot take that for granted. Some buildings close their eyes and allow an opening to be made between the apartments without requiring them to be technically combined. The idea is that people still have the flexibility of being able to sell two separate apartments, if they need to do that down the road. However, when purchasing two apartments, banks financing such purchases want to know that they are, in fact, combined or will be combined as of the date of the closing, so that their investment is protected and secured.
In one closing, the co-op and the bank required that probes be made in the two apartments, before approving the closing, to ensure that they could in fact be combined. The building did not have a set of the original plans and was not certain that they could structurally be combined. This involved having a separate agreement between the parties, with money held in escrow, to allow this work, since the buyer did not own the apartments they were cutting into and they might cause damage.
In another situation, two combined apartments were marketed as one joined apartment. When the attorneys were negotiating the terms of the contract of sale, it turned out that the seller did not have the paperwork proving that they had been legally combined. The seller had owned the apartment for a number of years prior to such documents being on-line. The seller was certain they were legally combined, but could not prove it. This resulted in the need for an expediter to be retained by the seller to go back in the New York City Department of Buildings records to find the paperwork. The actual document is called a letter of completion. Since this search might take a while, language had to be drafted into the contract of sale to require this paperwork as a condition of closing. In other words, the seller not having this paperwork ready, caused a lot more time to be spent prior to signing the contract of sale. This paperwork should have been on hand before the seller put the apartment on the market.
In another scenario, someone may own one apartment and another becomes available next door and they want to buy it and join them. This would be done after the closing as an application under an alteration agreement with the co-op. The shareholder buying the second apartment is usually treated as any new buyer would be and must submit a board package. The buyer would need to work with both an attorney and an expediter or architect on the process of combining the units. In this example, the buyer would be paying for the work done to combine them. In the example above, if it turns out that the units were not legally combined, the seller would be paying for the work that needs to be done.
When combining apartments, an application would need to be made to DOB for a permit to remove the wall between the apartments. There can only be one kitchen after the combination, unless the party has a need for two kitchens for religious reasons. The second kitchen is usually all or mostly removed, with the stove, in particular, being removed and the gas capped. Plumbing is also removed in the kitchen. The end result is a letter of completion, which is presented at or prior to the closing.
Often when apartments are combined, there is more extensive renovation than just the combining of the apartments. As an attorney who drafts many renovation contracts, I will discuss some of the things to be aware of in another article.

C. Jaye Berger, Esq., is the principal of Law Offices C. Jaye Berger, New York, N.Y. Tags: