A piece of legislation signed into law by Gov. George Pataki will level the real estate playing field by disclosing co-op sale prices.
The bill, which was signed by Pataki in late July, makes coop sales prices public. Currently, all other real estate transactions — including condominiums and townhouses — are public information thanks to the passage of a 2002 law to reform property assessments.
But purchases of co-op units — which make up 70 percent of city residential sales — are shares of stock in a corporation, and were inadvertently excluded from the disclosure law because it only covers “real property.”
The new sunshine law is viewed with enthusiasm by many real estate professionals.
“It’s going to give everybody a little more power,” said Diane Ramirez, president of Halstead Property. “Someone else that is not as familiar with the building — they will be able to go in and get real comps [comparative sales data].”
The law to amend the administrative code could lessen the advantage co-op brokers, showing exclusive apartments, have over other brokers.
“It could hurt an agent that worked in the marketplace where a price was not readily available,” Ramirez said. “An agent will not be the only one to know the proprietary information.”
Brokers with co-op properties on the market won’t lose their competitive edge as sales prices become public, said Steven Spinola, president of the Real Estate Board of New York.
“You’re still going to want to have a broker that understands the particular market you want to be in,” Spinola said. “The job is still a complicated process. This just makes it easier for all brokers to understand what sales prices are going at.”
A precursor to the passed legislation made New York City real estate property sales prices public, according to a law passed in 2002.
Due to a “drafting mistake” in the law, co-op prices were excluded from being released publicly, said Martha Stark, the city’s finance commissioner.
Not all co-op owners are in favor of the new law.
“I’m not interested in anybody knowing what I paid for my apartment,” said Helene Sencer, an East Side co-op owner. “Why is it anybody’s business what I sold it for?”
Joshua Kammerman, an attorney at the real estate law firm Kimmel & Kimmel, said if anything, the law could spur people to negotiate more for-sale-by-owners deals.
“They’ll feel more confident that they are pricing their units accurately,” he said.
Universally accessible co-op prices may also keep brokers in check. “It will be harder to overprice properties,” said Jeff Wolk, a board member and past president of the Manhattan Association of Realtors.
While observers are enthusiastic because of the law’s effect on market dynamics, Stark said it’s about good government and fair tax assessment. The intent, Stark said, is to “shed more light on how we administer the property tax and also, to some extent, provide an important public service, which is that they would have a public source to verify sales prices.”
Mayor Michael Bloomberg supported the passage of the law, as did the Real Estate Board of New York. The law brings transparency to how properties are being assessed, Spinola said.
Unlike in other real estate transactions, potential co-op buyers have to divulge a great deal of personal information before a board.
The secrecy of the co-op sales figure is not necessarily the reason why people move into a co-op. The new law will not prompt co-op buyers to consider condos, some brokers said, because purchasing in a co-op is less about the privacy of the sales number, and more about the exclusivity of the co-op.
“I don’t think they bought co-ops because of it not being public information,” said Sharon Baum, senior vice president and director of the exclusive property division at the Corcoran Group. People generally buy in co-ops, she said, “because they feel their neighbors have been prescreened and they have gone through this vigorous board process.”
Ramirez from Halstead echoed Baum’s remarks. “In your co-ops, it’s still like a private club. You have to be able to get into a co-op and that’s not changing.”