Film and Broadway producer Scott Rudin recently made real estate news when he and his neighbor jointly put their matching West Village Greek Revival townhouses built in 1845 up for sale. The initial asking price for the two four-story properties is $37 million.
In the challenging real estate market of New York City, homeowners of condominiums, attached houses, and residential cooperatives may find strategic advantages in listing and selling their properties jointly. This approach involves neighboring homeowners partnering to sell their properties as a package deal, potentially attracting developers and buyers looking for more significant or unique properties.
Advantages of a Joint Sale
One of the primary benefits of a joint sale is the enhancement of the property’s appeal to buyers. By offering a larger parcel of land or multiple units in a building, homeowners can target a different market segment, including those interested in redevelopment projects. It can result in a premium price compared to selling individually. Additionally, sellers can split the cost of marketing and legal fees, reducing individual expenses and increasing net profits.
Structuring a selling partnership
A selling partnership should be structured carefully to protect the interests of all parties. Homeowners should draft a formal agreement outlining the terms of the partnership, decision-making processes, distribution of expenses, and allocation of proceeds from the sale. Even before an offer, sellers should use a real estate attorney to ensure that the agreement is legally sound and safeguards each homeowner’s rights.
Legal considerations and restrictions
Before proceeding with a collaborative sale, homeowners and buyers should be aware of any legal constraints that might impede their plans. Condominium associations and co-op boards typically have rules and bylaws that govern the sale of units. These may include rights of first refusal, which allow the association or board to purchase the unit before it is sold to an outside party, or there may be restrictions on bulk sales.
The sellers should review their governing documents and consult with a legal professional to ensure compliance and address any potential issues before listing their properties for sale—failure to do so could lead to disputes or compliance issues.
The path forward
The West Village townhouses offer a rare opportunity for a buyer with considerable resources. Still, sellers of more modest properties can also benefit if, for example, the sale would be for a multi-unit property that was previously a one-family home. By understanding the legal landscape and structuring their partnership effectively, homeowners can work together to maximize their return on their investment. As with any significant financial transaction, it is critical to seek professional legal advice to navigate the intricacies of the NYC real estate market and ensure a successful and compliant sale.