Cooperatives and Condominiums

In contrast to cooperative housing corporations, where transfers are governed by personal property rules that give a boardwide discretion to approve transfers, a condominium board has limited control over prospective owners. The condominium is designated by law as real estate; as a result, restraints on the transfer of condominium units are limited.^[1]� The common control technique is for the bylaws of a condominium to provide a right of first refusal for the board to become the purchaser of proposed unit sales.^[2]�

Real Property Law (RPL) �339-v(2)(a) provides for the inclusion in condominium bylaws of “provisions governing the alienation, conveyance, sale, leasing, purchase, ownership and occupancy of units, provided, however, that the bylaws shall contain no provision restricting the alienation, conveyance, sale, leasing, purchase, ownership and occupancy of units because of race, creed, color or national origin.”^[3]� Courts have upheld restraints on alienation found in condominium bylaws provided that such restraints are conditioned upon the restrainer’s obligation to purchase the property at the fair market value.^[4]�