Nassau Gardens Cooperative (NGC) is a community-owned and operated business in which each member of record has an equal vote; one share, one vote. The NGC stock certificate may include up to three members’ names, however, only one member may vote. The Board of Directors is made up of residents elected by the membership. The Board of Directors is responsible for establishing standards to keep the community a pleasant place to live. Nassau Gardens Cooperative is self-managed under the supervision of the elected Board of Directors and the Property Manager.
In a condominium, the buyer purchases one unit with a conventional mortgage. In an established cooperative, such as Nassau Gardens, a share of stock is purchased, and the corporation assigns a unit to the shareholder. This means you will be making an all-cash purchase. In a cooperative, no loan or mortgage money is available using the share as collateral. Please keep in
mind that you are not buying real estate. You are purchasing one share of stock in Nassau Gardens Cooperative Housing Association, Inc. Your unit represents one share.
At Nassau Gardens Cooperative, there is a monthly payment determined by the Board of Directors. This monthly payment covers insurance on the building, taxes, gas, water, and maintenance for the entire property. The unit is not owned by the shareholder but by the cooperative. Exterior care includes lawn and shrubbery care, snow removal, trash removal, and maintenance of the exterior of the buildings. Interior care includes maintenance of plumbing, coop-owned appliances, heating & electrical systems, and structural repairs.
The introduction below was written in 1979 at the time our cooperative was created and incorporated. Most of what is said herein applies today. However, on September 1, 2011, we refinanced with Arbor Commercial Mortgage, LLC and no longer have a HUD-insured mortgage or Regulatory Agreement. We do have our own self-management guidelines for operational purposes. We also contract with Maloney Properties, Inc., to provide financial reporting and management advice as needed. In addition, an annual audit/financial review is completed by an outside certified public accounting firm to ensure that the necessary checks and balances are in place.
BACKGROUND OF COOPERATIVE OWNERSHIP
The increase in cooperative ownership of moderately priced dwellings in the United States during recent years has been phenomenal. There are now more than 1.5 million cooperative homeowner families in the country, compared with scarcely 30,000 in 1950. A third of this increase has been attributed to cooperatives insured or assisted by the Federal Housing Administration under the National Housing Act. The reasons for this rise in popularity of cooperatives in the housing field are many and varied. But briefly, cooperatives have met the desires of apartment dwellers for home ownership and better control over their community environment. And this has been done at a more reasonable cost through the cooperative approach of non-profit, non-speculative democratic ownership and operation.
WHAT THE CORPORATION IS AND WHAT IT DOES FOR ITS SHAREHOLDERS
Purpose: The Corporation is organized for the benefit of its Shareholders who are all residents. The Articles of Organization, which is its Charter, guarantees that the Corporation’s primary function is to provide housing on a cooperative non-profit basis for the benefit of its Shareholders.
How the Corporation Operates: The By-Laws of the Corporation form the constitution for the Membership group of owner-residents. They define how the Corporation shall function and they guarantee democratic control and define the structure of the Corporation and the rights and obligations of the Shareholder.
In these By-Laws, you will find provisions for eligibility for membership and manner in which the membership may be terminated; provisions for regular meetings; the method for selecting the Board of Directors and the extent of their powers and duties, as well as the technical requirements for the fiscal management of the cooperative corporation.
THE SHAREHOLDER AND THEIR RELATION TO THE COOPERATIVE
The most important part of the Cooperative is the individual Shareholder. The Cooperative has been created for the benefit of its Shareholders and their families.
Each Shareholder has joined the Cooperative by signing a Subscription Agreement. This agreement set for the Corporation’s promise to entitle the Shareholder to occupancy of a specific dwelling unit in the development and the Shareholder’s agreement to purchase his or her membership. It also establishes the Shareholders, as well as the Corporation’s right to cancel if that should be necessary.
Each Shareholder will also sign an Occupancy Agreement. This Agreement specifically defines the Shareholder’s right to occupancy of a dwelling unit. The Occupancy Agreement provides certain protections to a Shareholder – certain rights in the use of the dwelling. It also establishes certain limitations required for the benefit of the entire community or required by law.
MATTERS AFFECTING THE MONTHLY CARRYING CHARGE
The monthly carrying charge paid by the Shareholders provides the funds necessary to meet the financial obligations of the Cooperative. These monthly carrying charges will pay the real estate and other taxes and the costs of administration, operation, and maintenance of the development. Just as in any other business corporation, costs and expenses may change from time to time. You will note, therefore, that the Occupancy Agreement provides for a periodic review, at least annually, of the carrying charges and these charges may be changed as conditions require.
In addition to normal expense items, your Cooperative will also maintain reserve funds for your protection in the future. A Replacement Reserve and a General Operating Reserve will be accumulated to protect the Cooperative and its Shareholders.
Being a shareholder at Nassau Gardens Cooperative (NGC) has a considerable cost advantage over either renting or condo ownership in Norwood.
1. CONDO OWNERSHIP vs. NGC
To purchase a condo in the Norwood area costs approximately $250,000 to $300,000. In addition to the mortgage, there are utilities, taxes, condo fees and possibly mortgage insurance costs. In contrast, costs at NGC include the initial buy-in amount plus a monthly carrying charge, as noted in the chart below. The shareholder is responsible for their electricity, and cable/internet expenses.
2. RENTALS vs. NGC
Rentals in Norwood are approximately two and a half times the monthly carrying charges at NGC. Many rental units do not include utilities and may have additional charges, such as for parking.
Unlike a rental where you get nominal interest on your security deposit, at NGC you own a share in the corporation and the equity of that share increases annually. Upon moving out, the accumulated equity is returned to the shareholder, minus the cost of restoration of their unit.
3. BUY-IN EQUITY SUMMARY AS OF:
| Unit Size | Buy-In | Carrying Charges | Equity Increase |
|---|---|---|---|
| One Bedroom | $12,270 | $808/month | $1,080/year |
| Two Bedroom | $13,650 | $925/month | $1,200/year |