Co-ops Reap Unexpected Bonanza

According to an interesting article posted on NYTimes.com Real Estate Section: Co-ops Reap Unexpected Bonanza a law changed last month means change for commercial tenants. According to this law change cooperative buildings are now allowed to increase the rent they charge their commercial tenants. Apparently, retail space in some cooperative buildings in New York City have rented at bargain rates and in some cases, tenants have received thousands of dollars back at the end of the year. All of these measures were taken to ensure that tenants were not overcharged for their retail space. Although all of this sounds quite generous, the fact is that these cooperatives were mandated to follow such practices because of the 80-20 rule, a federal tax regulation that requires residential cooperative to make at least 80% of their gross income from tenant shareholders and no more than 20% from other sources of income; namely commercial tenants. However, a recent change in the law has allowed cooperatives to charge more for their commercial space and it hasn't taken long for the cooperatives to employ these changes.

Read the entire article Co-op Reap Unexpected Bonanza on NYTimes.com