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To reject a buyer without giving any reason? For rejecting a buyer for what the board feels is a low offer? How did they get to be so powerful and immune from any governance?
Why do you say they are immune from governance?
Because they don't have to give any reason for rejecting a buyer.
What neighborhood is this in?
It's in Queens but what does it matter?
What does giving an outsider a reason have anything to do with governance?
Well, who overseas co-op boards? Who holds them accountable?
No one holds them accountable for their own legal actions, just like any corporation isn't held accountable for any of their actions as long as they comply with the law.
After an interview with a new job, if they don't hire you, are they obligated to call you and say, "I'm so sorry, but we didn't want to hire you for the following reasons... "? And before you say, "but this isn't a job," you should find out what a cooperative really is.
>Well, who overseas co-op boards? Who holds them accountable?
They are accountable to their shareholders / owners in the co-op. Surely you aren't saying they should be accountable to someone else?
I see your points. It is a corporation. Unfortunately, it seems that co-ops seem to be setting a market price for their units and buyers have paid out a lot of money to find out they can't live where they want to. It just seems grossly unfair to all concerned, including the realtors, to go through all the time and expense of being rejected without any indication of why.
How, you ask, Kaydee? How?
I'll tell you how: By taking their massive insecurities & job powerlessness out on hapless applicants & shareholders, that's how (or, more accurately, why).
In any case, it essentially boils down to this:
No different than a country club- can reject anyone as long as they follow antidiscrimination laws. Doesn't matter that it's a more onerous application process or that it's something more important like housing.
It seems to be it should matter, crescent22. Only in NYC!
And overseas co-op boards are a different story altogether...
I'm sorry to hear that you were not approved, kaydee.
If you aren't given any reason how do you know it wasn't an illegal reason such as race, color or creed, by allowing a coop to reject for any reason and not state why is simply in my opinion another form of discrimination. Just my opinion, but same rules for condos should apply for coops in this so called fair world if the co-op doesn't want the person let them buy the unit themselves otherwise the reasons should be stated in the beginning example person must have a 950 credit score, person must make at least 1 billion per year and everyone must have 150 letters from current friends who work for the US government.
>example person must have a 950 credit score, person must make at least 1 billion per year and everyone must have 150 letters from current friends who work for the US government.
Well aalsberg, you have a lot of credibility
Thank you, aalsberg, I agree completely. And greensdale, I'm a seller and not a desperate one, but I think the entire process is very questionable and I'm surprised it is allowed to continue.
allowed by whom?
I think the idea that you might be misunderstanding, what myself, greensdale, and others are trying to get across, is that it's not about being "allowed." This really isn't even a part of the mentality, in fact. Whether it's Enron, Apple, or any other company, they are all trying to do what is best to put themselves in the best financial position. Granted, a co-op might not be as "aggressive" compared to a typical for-profit company, but it is still trying to do what's best for THEM -- as a whole -- not what's best for YOU. Similar to the job comparison I made before: when you are applying for one, they will be accepting you based on how YOU will benefit THEM. It's not about what's best for, and certainly not what's fair to, you. What makes many people, yourself included, uneasy about this prospect with coops is that we do not often (at least not naturally) think about our living situation as a circumstance in which we are trying to benefit a greater whole -- a company outside ourselves. Usually, when we think about our personal living situation and habits, it is natural to think: what to *I* want in an apartment, what am *I* looking for, what type of building works best for *ME*. If you are a co-op, however, they think of you as: how will this applicant help *US* further *OUR* goals (which is, in general terms, keeping the coop afloat comfortably). The concept of "allowed" really doesn't even enter into the thought process, unless legal questions are raised.
Happy 4th of July everybody!! :)
I've never heard so much whining. Just go buy a condo already!
Everyone, I think my original question was who oversees co-op boards, if any government/legal entity does. Do they just have carte blanche to do what they want without any accountability?
Happy 4th of July!
A coop is a corporation. The are subject to the stock holders(existing owners) and must obey the law. So your beef is with New York State and your fellow cooperative owners. Don't like it, speak to your fellow owners and elect a new board or petition to have the law changed.
"To reject a buyer without giving any reason? For rejecting a buyer for what the board feels is a low offer? How did they get to be so powerful and immune from any governance?"
This question is most often asked by someone who's been rejected by a board.
The problem isn't the board, it's generally how you handle the rejection. Too many applicants have entitlement and ego issues, and can't see themselves objectively the way third-party board members do. No one likes to be rejected, particularly after they've laid bare their financial and personal lives to strangers.
It's a BUSINESS decision. It's not personal. Take a closer look at your application and discuss with your broker what may have gone wrong.
"Everyone, I think my original question was who oversees co-op boards, if any government/legal entity does. Do they just have carte blanche to do what they want without any accountability?"
No one in America has "carte blanche" to do what they want without any accountability (unless you're talking about the government itself or the Federal Reserve).
Co-ops, like any other corporation, are not "overseen", but rather held accountable by layers of city, state, and federal laws and agencies.
I'm a HK resident, I just bought a condo but originally I want to buy another one but it's co-op, at first I don't know what's means of co-op but the broker explained to me and then I'm so surprised of this kind of arrangement, they said that it may take few months to get approval from the board and then they got the right to reject the tenant if want to lease out, so many limitation and also some co-op got rules I may lease out for one time and then need to live by myself for another years otherwise I can't lease out. So the oversea investors they must not buy co-op then it'll curb the demand as the oversea will go to buy condo without such limitation.
kaydee - it's interesting that you are a seller and not a buyer of a co op. I'm surprised that you bought in a co op considering how distasteful you find the process. People who hate co cops should never buy one. Buy a condo.
kaydee: It happened to me as a buyer. In 2011. we were turned down, ostensibly because the purchase was dependent on on the sale of our apartment (which was already in contract). But, we learned through our broker, who knew someone on the board, that the price was too low. Turns out this person had an eye on selling his/her place in the very near future and wanted to keep prices buoyant and comps high, even though the market was very soft and the apartment had been on the market for more than six months. We were told we could resubmit once we had closed on our sale, but that still left the issue of the price. It was fixer-upper and we, and the seller, thought our offer was a fair one. In the end, we walked away. We felt we wouldn't want to be part of a co-op that behaved in such a way. We felt badly for the seller. The apartment took almost another year to sell. We would not want to be in a similar position, as sellers, due to the actions of the board and the self-interest of one of the board members. As it turned out, it was all for the best, as these things often are. We bought a fixer-upper at a bargain price in a building we have always wanted to own in. It was a sponsor unit so we were happy to bypass the whole board approval process. Interestingly, we never heard directly from the board, all of the above was communicated through our broker, so I don't think it was a formal rejection but the sellers attorney had no qualms about returning our deposit. It was all very fishy and we were glad to be out of it... I have learned that, as a buyer, it is important to find out as much as you can about the way the co-op board operates so that the resale process is as smooth one when the time comes. I hope this helps, just a little!
"In the end, we walked away. We felt we wouldn't want to be part of a co-op that behaved in such a way."
Sounds like the co-op made that decision for you.
"I have learned that, as a buyer, it is important to find out as much as you can about the way the co-op board operates so that the resale process is as smooth one when the time comes."
Good luck with that.
How about just having good financials, a good employment track record, good references, and bidding on an apartment you can actually afford, rather than stretching and pushing the limits?
Matt's correct here, in fact brutally honest. Face it people look to coops because the want to join an exclusive club. And while one can debate the merits of joining a particular club , in the end people complain because the exclusive club decided they weren't fit for membership. Coops aren't perfect but the do have their strong points, such as superior protections to existing shareholders in the event an exiting stock holder becomes delinquent and defaults on payments owed on their mortgage or coop charges etc.
Coops are at a discount to condos for this very reason. You can pay 25 percent more and not deal with the interview. Why do people want a discount and not want to deal with the hassle which comes along with it?
"Coops are at a discount to condos for this very reason."
People say this all the time, but they're really not.
Do you some articles or data to prove your point?
It's difficult to o apples to oranges comparison. Often coops are older buildings. Of course in NYC we have some very expensive Central Park West and Fifth Avenue Coops that prove otherwise.
Since 2006, the premium has grown anecdotally due to foreign buyers.
Someone who cares might want to compare similar lines at the 923 Fifth condo with a same-vintage same-location co-op. 880 Fifth, say. (Classic-six A-line in one with E-line in the other, but I forgot already which is where.)
Or the St. Tropez condo with some big far-east-60s co-op.
Most co-ops have hardly any underlying mortgage left, so that traditional factor can be ignored. I'm pretty sure anyone out there in the market would say that condos carry a hefty premium. Whether that premium is justified by not having to go chat with some board members is another story. The package hassles aren't much different.
NYCMatt: That is your stock answer to every thread of this kind. Too bad you didn't take the time to read my post properly. WE walked away. They offered the opportunity to resubmit. We declined. I also object to your assumptions that we were bidding on an apartment that we couldn't afford and that we don't have good credit, employment history etc. You don't know anything about me. I find your tone on these threads unnecessarily confrontational and abrasive. in the end we, bought a more expensive apartment but not one at the top of our range.
@ KAS ... MATT and his minions are jackasses making people think that is you don't get into a COOP is cuz YOU AINT' QUALIFIED. Just like MADOFF use to act like when he wanted people to invest and gave this AURA of ENTITLEDMENT OF BEING IN HIS PRIVATE CLUB UNTIL HE TOTALLY SCREWED ALL HIS JEW BUDDIES.
Co-ops are like Bernie Madoff?
Well this thread got a little hostile. Kaydee to your original question, yes the co-op board can reject anyone and not provide a reason. Sometimes they do and in doing so can open up to legal issues if the buyer wishes to pursue. They are a private entity and so long as they are not violating any anti-discrimination/fair housing laws, they have the right to reject any buyer. Often it is because of the buyers financial situation, the suspected intended use of the apartment, the price being too low, etc. There is always talk in Albany, and I believe a current bill proposed, to mandate co-ops provide a reason for any buyer's rejection.
"I also object to your assumptions that we were bidding on an apartment that we couldn't afford and that we don't have good credit, employment history etc. You don't know anything about me. I find your tone on these threads unnecessarily confrontational and abrasive. in the end we, bought a more expensive apartment but not one at the top of our range."
Sounds like I struck a nerve.
The truth can sting sometimes.
"They are a private entity and so long as they are not violating any anti-discrimination/fair housing laws, they have the right to reject any buyer. Often it is because of the buyers financial situation, the suspected intended use of the apartment, the price being too low, etc."
But when you're talking about bruised egos, rejected applicants are always the first to cry foul, alleging some sort of bias.
To quantify this, in Manhattan alone there're about 2700 co-ops with 200,000 apartments. That's counting only those with more than 10 apartments. I don't know how many small ones there are, but in any stretch of rowhouses a bunch are co-ops.
Shareholders want to serve on boards for lots of reasons, but a lust for power and throwing one's weight around doesn't seem to be all that prevalent. There's not much scope for either, and if there were the work involved would be a high price to pay. It's probably more a feeling that someone has to do it, and (not to be too high-falutin') a sense of duty.
I like stories about dysfunctional/inefficient/etc. boards as much as anybody, but there just aren't that many of them.
I think the problem is that co-op boards are given too much leeway with too little structure. No person has a problem being rejected for a reason, its the fact that they can give you no reason and have no oversight. You have submitted very personal information you at least deserve a reason and if rejected your money back for the application.
Its basically like sleeping with someone and you never get that second call afterwards.
"It's probably more a feeling that someone has to do it, and (not to be too high-falutin') a sense of duty."
Every year we always have at least one open seat that we're begging people to fill. And usually someone finally reluctantly raises their hand.
But we've never had enough candidates to actually force a vote.
"have no oversight"
As I explained before, we DO have "oversight" by multiple layers of government, in addition to our own shareholders. We are no different from any other corporation.
It's usually that way with us, too.
Year before last, though, there was a contest. The person who was seen as having an agenda, being single-issue, lost. People don't like that. (I was all het up over the same issue, and bullet-voted for him, but now can't even remember who he lost to.)
While there is no denying that there are difficult coop boards in certain locations: fifth avenue, Central Park and vicinity, the percentage of people who are rejected is small. Think the article mentions 5 percent or so. In most coops, unless otherwise stated typically in form of high downpayment, 30 percent down, two-three years of mortgage, maintenance and personal expenses ex 401k post closing in cash/ diversified stocks, ability to easily carry the apt from your average income of last three years, respectable job history and current job, no lawsuits, and good attitude towards the interview process will do it. If a substantial portion of your income is from bonuses, increase the liquidity post closing to 5 years and haircut bonus amount by 50 percent to calculate income.
I wonder what percentage of the 5% rejections feel there rejection had merit. My guess close to zero.
"On the surface, it appears as though buyers have an instinctive affinity to buildings where they are welcome - brokers say 95 percent of all applications are successful on the Upper East Side and a higher percentage in other parts of the city. But the relatively small number of board rejections and the handful of complaints received by the City Commission on Human Rights give no inkling of the scope of the discrimination. According to brokers and real-estate lawyers, it does say a lot about the amount of steering that goes on."
I agree riversider. For me, I will take the discount on the coop vs condo for a 5 % probability of rejection. In most cases, the selling broker will give you a good feel of what is needed.
Thank you, 300_Mercer.
I think much of the indignation comes from high-paid finance types (who already have an ego the size of Rhode Island) who don't understand that people who have a substantial percentage of their incomes in the form of bonus money are generally not good co-op candidates, unless they have a boatload of liquid assets to assauge any worries the board might have that their volatile employment situation could come to an abrupt halt.
Well, thanks for all your comments although some of them were off topic and uncalled for. But I guess my major concern is that it seems a co-op can dictate a market price for an apartment which in some way seems illegal to me. If I as a seller am willing to accept a price, I don't understand how (I understand WHY) a coop can nix the deal.
Kaydee, Sorry that you have to deal with this. Coops have a good reason to reject unusually low price as it impacts the appraisals of the rest of the shareholders. However, unusually is the key word. As a buyer, I would hate the board as well as they are preventing a great deal.
" If I as a seller am willing to accept a price, I don't understand how (I understand WHY) a coop can nix the deal."
Because it's not a simple real estate transaction.
In fact, it's NOT a real estate transaction; you are buying into a third party -- a CORPORATION -- that ultimately decides who can and who cannot be a partner.
> a co-op can dictate a market price for an apartment which in some way seems illegal to me.
Which law do you want to cover this? Who should prosecute?
Kaydee---as 300_mercer correctly points out, if the price is loo low the shareholders will be adversely impacted. If your upstairs or downstairs neighbor that has the same apt as you sells it under market for 20-50k or more I guarantee you would be upset when you try and sell yours 1 month or 6 months later. No one will pay market price because your neighbor undervalued their unit. Especially now when buyers have at their fingertips almost as much comp info as brokers do they conduct their own research and "recently sold" in the building is the their #1 reference point. That said, there will be co-ops that inappropriately wield their power and create nightmares for their own shareholders. Co-op boards are comprised of members that are human, sometimes with their own personal agendas, but typically and most often, they have their building and neighbors best interest in hand because that is their assigned duty.
...and I might add - that once you're actually IN your new condo that you bought because you thought the mean co-op boards were simply too randomly imperious for your delicate sensitivities, many condo boards can be equally an epic pain in the ass in comparison to any co-op out there when it comes time to deal with renovations, quality of life issues, instituting house rules and fines, etc. And I know this from having done board service in both co-ops and condos that I have previously owned.
I actually have drinks with some people that serve on boards on park ave in local restaurants. Does the issue or question of where are the people from or what is their profession discussed causually for applicants ?? It most certainly does and ANYONE who says otherwise is A FUCKIN LIAR !
kaydee I think you raise a good question about boards dictating prices. I have some thoughts on the matter which I posted in the discussions section under the heading, "Plaza 400 Board." If you are interested here is the link:
The posting I am referring to is the third posting I have on the page.
Yes, and I have some thoughts for you on that page, Vgoldber59.
MIBNYC: So what? Buy a condo. Clearly the people you actually drink with who serve on Park Avenue boards would not accept you as a co-op applicant in their buildings, but you're happy having drinks with them anyway.
OMG...Ida Goldberg...is.that you?!? I thought were long gone. You must be in your 120s by now - OY!!!
>MIBNYC: So what? Buy a condo. Clearly the people you actually drink with who serve on Park Avenue boards would not accept you as a co-op applicant in their buildings, but you're happy having drinks with them anyway.
Right. Very odd.
@Grace Jones, didn't I tell yo dumbazz already that I live in a TOWNHOUSE ?
...I'm sure you "live in a townhouse." I hear those rentals are nice...
Thanks, MIBNYC - I now have "Do or Die" going 'round in my head...
Thanks - but I meant this (although she actually WAS in a Bond flick).