This Sunday's "The Hunt" column in the NY Times followed a back-from-the suburbs, two-dog family who wanted to buy a $2.895 million Upper East Side condo in a building that only allowed one dog per unit.
Here is the curious resolution:
"[The buyer] noted to the condo board that their apartment was three units combined. So both of their basset hounds...should be allowed. The board acquiesced."
We suspect this board wanted to creatively assist a sale in a moribund real estate market. But its decision highlights--and exacerbates--the tension between small and large unit owners in most buildings.
Voting rights in the city's co-ops and condos are based on how real-world businesses work: Roughly speaking, the bigger your investment, the more say you have in how it will be managed. That part is understandable. But the analogy doesn't work all the way: Someone who owns a million shares of Google can cast more votes than someone with 10 shares, but the outcome of the vote won't compel the little guy to put more money on the table.
In the co-op/condo scenario, however, smaller owners are frequently less able to fund building improvements favored by neighbors whose personal fortunes correspond to the size of their real estate. And unlike stocks, real estate is illiquid: The strapped one-bedroom owner can't sell off a bathroom to pay an assessment.
While we don't love this arrangement, we don't have a better suggestion at the moment (though we'd be interested in hearing ideas). But we do think the condo board in the Times story made a questionable decision.
These buyers weren't concerned about protecting their investment, which is the rationale under which voting rights are distributed by share instead of by family. They just wanted a perk--an extra dog.
But a co-op or condo building is a community as much as it is a business. And to award (or withhold) privileges based on the size of one's apartment, or the number of shares, seems--well, we're not sure what the right term is. Unfair? Undemocratic? Whatever it is, it kind of makes us queasy.
One family, one rule. That's our vote.
Related posts:
Killing deals to protect property values is risky business
1 in 10 co-op sales inflated to pass the board
Approval, schmoovel! Renovation perks for board members
4 neat ways to use an investigative lawyer in a co-op or condo
