AFFORDABLE HOUSING

05.03.22

The benefits of leasehold condominiums for nonprofits

By Ruben M. Ravago, Laura Mehl Sugarman

On Tuesday, April 26, 2022, Nixon Peabody's Ruben Ravago and Laura Mehl Sugarman had an informative discussion on the benefits of leasehold condominiums, particularly for nonprofits. Not only do nonprofit tenants feel the impact of New York City's exorbitant real estate taxes through high rents, they often bear direct responsibility for pass-through real estate tax costs. Creating a leasehold condominium can provide relief, allowing an eligible organization to obtain an exemption from real estate taxes and use those dollars to fund its mission. They touched upon the leasehold condominium structure and the factors informing whether it is worthwhile for a given nonprofit. Ruben and Laura provided insights on the following related topics:

Section 420-a of the New York State Real Property Tax Law grants eligible nonprofits a full exemption from their real estate taxes on real property they own; eligible organizations include educational, healthcare/hospitals, charitable, religious, mental health, and social services entities
A minimum 30-year lease term is required for non-residential purposes, although dormitories and homeless shelters qualify as "non-residential"
The difference between a "PSA structure" vs. "Condo in a Condo" structure vs. a single-tenant leasehold condo structure, and when to use each of these structures
The formation process for a leasehold condominium can take up to nine months. It is important to fully complete the 420-a application as the appeals process can be lengthy
The nonprofit entity's landlords, architects, lenders, agencies, expeditors, and lawyers must be involved throughout the application process when creating a leasehold condominium
General costs of formation for a leasehold condominium include fees for filing, architects, expediting, and legal.

Ruben and Laura covered a lot of information in a short amount of time during this webinar. If you have any questions or would like additional details about leasehold condominiums, general real estate issues or information regarding cooperatives, be sure to reach out to them directly! We hope you will join us for future programs.

Tags: New York and Northeast, Condominiums and Cooperatives, Real Estate, Webinar

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Author

Ruben M. Ravago

Counsel

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Thank you for your request to e-mail Ruben Ravago.

While you are welcome to contact an attorney at Nixon Peabody LLP, you should be aware that this Web site presents general information about Nixon Peabody LLP and is not intended as legal advice, nor should you consider it as such. You should not act upon this information without seeking professional counsel.

Please keep in mind that merely contacting Nixon Peabody LLP will not establish an attorney-client relationship. Nixon Peabody LLP cannot represent you until the firm knows there would not be a conflict of interest and the firm determines that it is otherwise able to accept the engagement. Accordingly, please do not send Nixon Peabody LLP any information or documents until a formal attorney-client relationship has been established through an interview with an attorney and you receive authorization in the form of an engagement letter from Nixon Peabody LLP. Any information or documents sent prior to your receipt of an engagement letter cannot be treated as confidences, secrets, or protected information of any nature.

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Continue with e-mail to Ruben Ravago.

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Author

Laura Mehl Sugarman

Partner

Posts By this author

Thank you for your request to e-mail Laura Sugarman.

While you are welcome to contact an attorney at Nixon Peabody LLP, you should be aware that this Web site presents general information about Nixon Peabody LLP and is not intended as legal advice, nor should you consider it as such. You should not act upon this information without seeking professional counsel.

Please keep in mind that merely contacting Nixon Peabody LLP will not establish an attorney-client relationship. Nixon Peabody LLP cannot represent you until the firm knows there would not be a conflict of interest and the firm determines that it is otherwise able to accept the engagement. Accordingly, please do not send Nixon Peabody LLP any information or documents until a formal attorney-client relationship has been established through an interview with an attorney and you receive authorization in the form of an engagement letter from Nixon Peabody LLP. Any information or documents sent prior to your receipt of an engagement letter cannot be treated as confidences, secrets, or protected information of any nature.

Clicking on the link below acknowledges that you understand and agree with this notice.

Continue with e-mail to Laura Sugarman.

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AFFORDABLE HOUSING

The benefits of leasehold condominiums for nonprofits

By Ruben M. Ravago, Laura Mehl Sugarman

Tags: New York and Northeast, Condominiums and Cooperatives, Real Estate, Webinar

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