There is a sinking feeling real estate agents get when we look up the history of a co-op or condo apartment we are listing for sale and see that our new client bought it as a 2 bedroom unit and prior transactions have it as a one bedroom. Obviously, two bedroom apartments are higher in value than those with one bedroom. However, using a den or alcove as a bedroom does not make the area a legal bedroom.
Generally speaking, a bedroom has to have its own door, a window, and a closet. That said, even if the owner hires a contractor to add a closet, you simply may end up with an illegal bedroom. All buildings have certificates of occupancy, and they specify the characteristics of the building. The reason for this isn't simply municipal hegemony; the number of bedrooms indicate the probable number of inhabitants for matters like utility usage, parking spaces, and fire safety. If a large building with limited parking has ten or fifteen extra "bedrooms" added over time without management's knowledge, there can be a shortage of parking or quality of life issues the building was not designed to accommodate. That is why there is red tape or prohibition in legalizing a 2nd bedroom.
When owners and real estate agents list a 1 bedroom unit with a den or a junior 4 (one bedroom with a dining area) as a 2 bedroom, that information is out there forever. It remains in Multiple Listing Service archives and real estate websites, and future owners of the unit who thought they bought a two bedroom and can only sell it as a 1 bedroom may be caught in the information undertow. This is a liability that is larger than any gain that the 2 bedroom listing might have yielded.
The pragmatic issue is that the current crop of buyers in this economy are very cautious, and do far more research than in years past. Moreover, a buyer needing a true second bedroom often turns on their heels when they see a 7' by 9' den or converted dining cubby being pawned as that second bedroom after viewing true 2 bedroom units. That does not foster trust.
Last year the Westchester Putnam Association of REALTORS (now the Hudson Gateway Association) began to actively stop member brokers from listing junior 4 and 1 bedroom units with a den as 2 bedrooms, and that did cause a backlash with some sellers who thought they owned two bedroom units. This was an unfortunate thing, but necessary to make sure that the integrity of the data going forward would be reliable.
The takeaway for consumers and agents alike is that a simple check with the management office can save future headaches and expensive mistakes.