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Re: Equity refund from Mitchell-Lama Co-op

Posted by Mark Smith on August 10, 1999 at 10:27:48:

In Reply to: Equity refund from Mitchel-lama Co-op posted by Shirley Gordon on August 10, 1999 at 09:07:54:

Mitchell-Lama co-ops (and rentals) have the same clause that most leases have: the apartment has to be surrendered broom clean, in the same condition it was in when the tenant received it, reasonable wear excepted. And like many landlords, who have only a month or two worth's rent as security deposit, some Mitchell-Lama co-ops like to hold on to as much as they can.

Unlike most co-ops, where the apartment is sold by the outgoing co-operator directly to the incoming co-operator, outgoing Mitchell-Lama co-operators sell their apartments back to the co-op, which in turn, sells it to the incoming co-operator.

But, in a Mitchell-Lama co-op, that amount is much more than a security deposit, because it is several thousand dollars of original equity, and possibly the co-operator's share of the mortgage amortization, plus any assessments for capital improvements, such as new windows.

Mitchell-Lama tenants and especially co-operators should take the same precautions that any tenant should take when moving out: photograph and/or videotape the apartment to show the condition. If possible, get a co-op board member and/or the managing agent to inspect the apartment with you, and try to get a written report of any alleged defects. Dispute the alleged defects if you think they are wrong or unreasonable.

Some Mitchell-Lama co-ops seem to think that the new co-operator is entitled to a brand new apartment -- courtesy of the old co-operator, who may have been there for 40 years. Some even insist that the outgoing co-operator remove all improvements. While there can be disagreement about what is an improvement (freshly painted in dark purple, with bright orange carpet?), this can become unreasonable.

It is also unreasonable, in fact, unconscionable, to delay the refund of the equity (or security) for a year. It is also unreasonable not to give details of the deductions, especially if they total 75% or 100% of the equity.

Although I wouldn't really expect any results, you coul

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