rejection

boards do reject and usually get significant legal guidance when they do. Reality is that most boards have guidelines and if you are able to meet them, there should not be an issue. In cases, I am aware of, rejections have resulted when prospective buyers have misrepresentd their financial position.

does this apply to co-ops only, or are you saying it is for condos also?

does anyone know lawyers who handle board rejections? i had biyer rejected and want to sue them.

It is my understanding that board rejections are in coops only. In condos, the only procedure available to the board is to buy the unit. Am I wrong?

the condo board in a building we are buying in only has the option to buy apparently. Not sure what other condo boards can do though.

nuggit

I have never heard of a case where the condo refuses to accept a buyer unless of course if the buyer had a serous crimianal record.

From what I've heard about co-op boards, they can reject you, need give no excuses to anybody & both the seller & the buyer has no recourse. It really is a fascinating system but, again, you're not buying real property, you're buying shares in a real estate corporation.

it really does challenge the self-entitlement of you lol

Co-op Board—definition: noun. An unregulated governing entity, found exclusively in New York City, which is empowered to enforce various forms of discrimination at its own discretion. Usually, but not contained to, individiuals who could not afford to move into their own building, given the past and current market. Marks of integrity and morality only found in rare instances. Self-policing and self-perpetuating.

Contrary to poster #11 above me, I'd be happy to give you a basic overview regarding coop (and condo) board rejection as a previous coop president and board member myself. It's a bit lengthy, so I apologize in advance for those of you who think responses should be limited.

In a coop situation, there are basically three types of boards - conservative, moderate, and liberal. A conservative board will be extremely demanding, and you will have to put at least 50% (or more) down plus usually show the ability to purchase your place for all cash, plus have a multiple of that number in liquid assets, with the multiple being anywhere from three to ten times the purchase price of the unit. Your personal and financial life will be subjected to minute scrutiny, including a forceps, tweezers, and an electron microscope. After this lengthy review process on paper, you will then (if you pass muster) have a series of interviews, in which you, your kids, your pets, and any other sentient beings living with you will be scrutinized. You will have to have a broad spectrum of excellent personal and professional references from people those on the board either know personally or are likely to have heard of and want to know (nepotism is crucial). In addition, conservative boards are very resistant to anyone they think are too young, too much of a partier, someone who is going to do extensive gut renovation (non-decorative), those who might bring any type of unwanted attention to the building (such as a rock star or movie actor), and those who are in any way 'too splashy' (read: new money, including hedge fund youngsters, no matter HOW wealthy). In addition, yes, there is NO doubt that the most conservative of coop boards have 'unwritten' agreements regarding religion, race, and other discriminatory practices, so much so that when wealthy buyers are looking for a coop along a stretch like prime Fifth Avenue or prime Park Avenue, all the brokers and residents are fully aware that certain buildings only accept only jews (or none at all), certain buildings accept only wasps (or none at all) certain buildings accept minorities (or none at all), and so on. But truthfully, in my experience this is a VERY SMALL NUMBER of extremely small, high end, long standing, boutique coops located in the most prime locations of the upper east side.

Moderate coops (which tend to be the very large majority) of the type that I was board president of) tend to want to be simply assured that the prospective buyer can reasonable handle the financial responsibilities of ownership. You should be able to put 20% - 25% down, and not be completely broke. Your monthly mortgage payment and maintenance should be no more than about 50% of your monthly income (give or take). The reviewal process of your financials is detailed but reasonable (last three months bank/brokerage/investment statements, last two years tax returns, letter from employer, some personal and professional references, and a credit check). Assuming all looks good on paper, we're only interested in a brief 30 minute meeting with you to clear up any questions we have (if they exist at all), make sure that you seem to be nice, answer any questions you may have about us, and that's it. Assuming you don't have two heads or carry on a conversation with an imaginary person during the board meeting, you can assume you're in.

Liberal coopo boards are rare, and basically they simply operate on a 'right of first refusal,' meaning if you have somebody that wants to buy your place, all you have to do is then offer it to the coop board for purchase first at that exact same price (usually the board has seven days to decide). As this option is (almost) never used, you can then sell to your buyer, no financials or review required.

Condos used to only operate on the 'right of first refusal.' But I have news for you - even that is changing! Many higher end condos are now adopting a process (still very relaxed, though) where the financials of a potential purchaser must be reviewed and a very brief interview held. This is happening because people buying expensive condos DO want that great flexibility a condo offers (rent/sublet/sell quickly if need be) COMBINED with some sort of very basic controls on who gets in the building (will they pay their building maintenance on time and will they act respectfully to other tenants being the only issues).

In a coop, approval can be with held for any reason, and that reason does not have to be disclosed. The language in these newer condo rules says that approval cannot be UNREASONABLY WITHHELD, which is very different than the coop situation.

If you are turned down for a coop, the only real basis you can legaly attempt to fight that rejection is discrimination of one kind or another, and that is VERY hard to prove in a court of law as all board members know exactly what can and cannot be said in an interview that would trigger a legal basis for this kind of lawsuit. People have won before, but an EXTREMELY small percentage.

Hope that helps, and sorry again for the long explanation....

Thank you very much; an excellent explanation of the board process.