New York Cooperative Ownership Differs From Condos

New York's exam has no national portion at all, and most prep courses are still teaching the wrong material.

New York's In-House/PSI exam tests 75 state specific questions with no national portion at all. That structure punishes candidates who spent their prep time on general real estate principles. Co-op ownership rules, assessment tax classes, and Article 12-A violations are the three areas where the state portion consistently separates passing candidates from those who have to return.

I grew up in New York, and the co-op market is something you absorb just by being there. I even named my cat Rochester after Rochester, NY, the city, not the building. But knowing co-ops from lived experience is very different from knowing the legal rules the DOS exam actually tests. Let's get into what the statute requires.

Co-op vs. Condo Ownership

In a New York co-op, buyers don't receive a deed. They receive shares in a corporation and a proprietary lease, and that distinction changes how financing works, how board approval is required, and what transfer taxes and flip taxes apply.

In a co op you own shares in a corporation and hold a proprietary lease, not a deed, the exam ruthlessly tests this distinction, including how it changes financing, board approval, flip taxes, and subletting restrictions unique to New York.

The exam tests the specific consequences of co-op versus condo ownership: who holds title, what a board can reject, how subletting rights differ, and why a co-op sale cannot be financed the same way a condominium sale can. I don't want you guessing on this one. Know it cold.

Ad Valorem Tax Assessments

New York's assessment system divides property into tax classes with different ratios. Class 1 residential property is assessed at 6% of market value, while Class 2 through 4 properties are assessed at 45%, and the DOS exam tests those specific percentages, not a general concept of assessed value. Actually, the statute says something more specific: the ratios are fixed by class, and the exam will give you a market value and ask you to calculate the assessed value using the correct one.

New York uses different assessment ratios by tax class (6% for Class 1 residential, 45% for Class 2-4), students routinely fail questions requiring calculated assessed value versus real market value using these state specific percentages.

Ad valorem tax assessment methodology differs by state. Pennsylvania assesses property under a county-by-county system with varying ratios, and Delaware uses assessed values that may not reflect market value. Neither state's assessment system functions quite like New York's, where appeal rights and exemption calculations are also tested.

Be ready to calculate assessed value from market value using the correct class ratio, identify which class a given property type falls into, and apply exemptions such as STAR. These are the specific calculations the DOS exam will present.

Article 12-A Violations

Article 12-A is New York's foundational license law, and the DOS exam tests it as a criminal statute, not a civil one, which changes the consequences when candidates try to reason through violation questions. I don't make the rules. I just make sure you know them better than whoever's sitting next to you.

Article 12-A of New York's Real Property Law is the backbone of license law, and any single violation constitutes a misdemeanor, confuse it with a civil penalty and you lose critical points.

Know which acts constitute an Article 12-A violation, that each violation is classified as a misdemeanor under New York law, and what penalties and license consequences follow. The DOS exam will ask about all three.