New York Real Estate Broker Exam — All Questions

Many New York City apartments are subject to rent stabilization, which means:

• a.Owners may raise the rent to any market level each year
• b.The apartments cannot legally be rented
• c.Permitted rent increases and lease renewals are limited by law rather than set freely by the owner✓
• d.The tenant owns the apartment outright

Rent stabilization limits permitted rent increases and gives tenants renewal and other protections. A broker working with regulated units must understand that the rent and renewals are governed by law, not set freely by the owner, and misrepresenting a unit's regulatory status can create liability.

In a New York cooperative, the purchaser acquires:

• a.Fee-simple title to the physical apartment as real property
• b.An interest in common elements only
• c.A time-share interest in the building
• d.Shares in a corporation and a proprietary lease, subject to co-op board approval✓

In a cooperative, the buyer purchases shares in a corporation and a proprietary lease rather than real property, and the co-op board typically must approve the purchaser. This differs from a condominium, where the buyer owns the unit as real property plus an interest in the common elements.

Which statement about a New York cooperative board is accurate?

• a.A co-op board may reject an applicant without stating a reason, subject to fair housing law✓
• b.A co-op board must approve every financially qualified buyer
• c.A co-op board may reject a buyer based on the buyer's race
• d.A co-op board has no role in approving purchasers

A cooperative board may reject an applicant without stating a reason, but it remains subject to fair housing law and may not reject a buyer on a prohibited discriminatory basis. Brokers must explain that co-op board approval is a real contingency that can delay or prevent a closing.