Lifting the veil on co-op prices: how the law came about

Nov.November 01, 2007 03:21 PM

A New York state law has long shielded the tax records of co-operative apartments, making them the only type of housing exempt from public records rules.

But that cover was lifted when Gov. Pataki signed a bill late last month giving the public access to previously undisclosed documents.

“It sheds more light on how we administer sales taxes and provide a public service,” said Martha Stark, the commissioner of the city’s Department of Finance.

The legal measure was just a “technical” correction to a law that made New York City real estate transactions — other than co-op sales — public, she said.

The passed legislation is actually “part of a bill that we had done after several of our assessors were arrested,” Stark said. “We started to try and figure out ways to make what we do at Finance clearer to the public and information that we had more readily available to the public.”

In 2000, 20 current and former city tax assessors were arrested on charges of taking bribes from building owners in exchange for cutting their property taxes. Two years later, a state law was passed to make property sales prices public record.

The 2002 law, which went into effect in 2003, “made New York City like every other jurisdiction in the state,” said Assemblyman James Brennan from Brooklyn, the assembly sponsor of the 2002 and 2006 legislation.

But that same law applied inadvertently to real property only, Stark said. Since co-ops are shares of stock in a corporation, they were excluded from the statute.

The new law closes the loophole. “This co-op sale information is kind of a final step in full disclosure of market prices in New York City real estate,” Brennan said. “It should have been law 20 years ago.”

The bill had been on the Finance Department’s legislative agenda since 2003, but was finally passed by the state Legislature this June.

“I think we timed my visit really well,” Stark said. “I was up there in early June, about a week and a half before the session closed.” Also, she said, the agency hired a lobbyist this year that was able to urge legislative action.

The state Senate delivered the bill to Pataki’s office, and the governor signed it into law on July 26.

The Department of Finance was expected to begin posting sales prices on its Automated City Register Information System, or Acris, early this month. The online data will go back to January 2004.

Co-op sales prices haven’t been a total mystery in the past. There is the widely followed quarterly Manhattan market report prepared by appraiser firm Miller Samuel for brokerage Prudential Douglas Elliman, and other brokerages including the Corcoran Group, Halstead Property, Brown Harris Stevens and Stribling & Associates put out reports that aren’t property specific but have overall figures like average sales prices.

The Real Estate Board of New York also releases a quarterly report.

Co-op units make up more than three times the number of condos in New York City. There were 375,202 residential coop units for the fiscal year ending June 30, 2005, Department of Finance statistics show. There were 122,384 residential condo units, 1,237,997 rental units, and 1,058,238 one-, two-, or three-family homes and “condops.”

With identity theft garnering plenty of cautionary headlines, some people may worry about how much information the law will make available. While the prices and names of the buyers and sellers now become public, Social Security numbers remain confidential.

“When you think about today how much information is available on every single person, it’s very scary,” said Sharon Baum, senior vice president and director of the exclusive property division at Corcoran. “This is, I guess, one more element.”

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