Best way to win over a co-op board if financials are on the fence?

hal_s, are you including base + bonus + dividends, etc. in your salary calculation or are you just talking about your base salary? If you are talking about being $1K shy after adding up every source of income, then you have a bit of a problem. But if you get bonuses, dividends and even 401(k) matching grants on top of your (39.9 x rent) salary, then the coop board should be okay with that, I think.

you could offer to prepay maintenance for 6 - 12 months if that's doable for you.

Math aside:
Maybe another Math Wizz concludes otherwise, but I don't think we do have enough info to calculate your salary.....any rent and any salary will satisfy the requirement to be both $30 per month too high for your salary and "about $1000" per year too high when multiplied by 40 ($1200 to be precise)
Yes?

Do renters pay maintenance in a co-op?

owner continues to pay maintenance - renter pays rent to owner

That's what I thought, thnx.

Hal, are you renting in this co-op, or are you buying?

As hej pointed out, as a co-op board member I would have overlooked the marginal income shortfall until you pointed out that your income is the result of not one but two jobs. HUGE red flag. However, if you're just renting, the fact that you have a full year's worth of rent in the bank should mitigate that shortfall.

Your credit score puts even more marks on the "plus" side of your balance sheet. And while three years is hardly a track record, three years at the same employer with raises nudges that also into the "plus" side.

Renting...my salary only comes from one job; I just brought up the 2nd source of income as a possible way to push me over the edge.

Unfortunately, my job isn't the sort of job that results in bonuses or dividends, but I do get 401k matching, so I'll have to see if that helps.

What does a co-op board care about a subletting tenants income? Owner is the only one who pays them anything. I understand making sure they won't be partying all night and peeing in the hallways. But what idiot would apply a rental ratio when they are not paying the building anything?

Is it because most boards who do this are full of pompous a**holes?

coop board review of a renter? interesting.... Did you find out how long you can rent this place? There are more than a handful that restrict the time period that an owner can rent. It would be a shame to have to do this again next year as you look for a new place. The coop cares what you make??? there is an owner and it will always be the owners problem. I think if there is some sort of review it's just to see if you smell funny or your some kind of psycho...that couldn't be the case......Francis....could it?

Write a cover letter that your salary is "X" and you get "Y" in freelance income, and therefore not only have 40x coverage for the building you'd LOVE to live in, but in addidion, have had a stable job and one year's cash reserves.

You're a perfect candidate. Enjoy the new place.

ps @modern and @falcogold -- our (somewhat fancy) CONDO reviewed our renter's finances. Boards are being very, very careful these days.

ali r.
{downtown broker}

Write a cover letter that your salary is "X" and you get "Y" in freelance income, and therefore not only have 40x coverage for the building you'd LOVE to live in, but in addidion, have had a stable job and one year's cash reserves.

You're a perfect candidate. Enjoy the new place.

ps @modern and @falcogold -- our (somewhat fancy) CONDO reviewed our renter's finances. Boards are being very, very careful these days.

ali r.
{downtown broker}

"What does a co-op board care about a subletting tenants income? Owner is the only one who pays them anything. I understand making sure they won't be partying all night and peeing in the hallways. But what idiot would apply a rental ratio when they are not paying the building anything?

Is it because most boards who do this are full of pompous a**holes?"

No.

It is because we have a fiduciary duty to the rest of the shareholders that the prospective renter can afford the apartment, thus ensuring the original shareholder won't default on either his mortgage or maintenance.

"ps @modern and @falcogold -- our (somewhat fancy) CONDO reviewed our renter's finances. Boards are being very, very careful these days."

The CONDO seriously overstepped its legal authority in doing so, and should be called out on it.

"It is because we have a fiduciary duty to the rest of the shareholders that the prospective renter can afford the apartment, thus ensuring the original shareholder won't default on either his mortgage or maintenance. "

What? There is no fiduciary duty, you have no relationship with the renter. And no cause of action against them if they don't pay rent.

Do you actually let people buy in your co-op who can't afford the maintenance if the apartment is vacant for a while (or rented to someone who doesn't pay)? You must be desperate. Seems to me the one real role of a co-op board is not to let people buy who can't afford it.

"ps @modern and @falcogold -- our (somewhat fancy) CONDO reviewed our renter's finances. Boards are being very, very careful these days."

Then your board is full of financially brain-dead people, sorry. Renter's finances have little to do with whether your building gets paid.

The condo board is putting renter's financial info into the "might reasonably require" category spelled out in the by-laws the owner agreed to when she bought the place.

Matty- By you saying:

"It is because we have a fiduciary duty to the rest of the shareholders that the prospective renter can afford the apartment, thus ensuring the original shareholder won't default on either his mortgage or maintenance."

You are implying that without this rental income, the shareholder is at risk of defauting without this income. Otherwise, if they were financially sound, this added rental income would not be a concern.

As such, WITHOUT ANY rental income, the shareholder is at risk of defaulting on said mortgage/maintenance and the board should be happy that any renter is willing to help prevent the shareholder from defaulting.

When you as the board member review the rental agreement, do you go back to the shareholder and ask to see their financials again to determined if the rent is suffcient to cover their costs?

If not, you have no way of knowiwng if the rent is suffcient to prevent the shareholder from defaulting as they could have tons of debt outside the mortgage/maintenence that you are not aware of.

"What? There is no fiduciary duty, you have no relationship with the renter. And no cause of action against them if they don't pay rent.

Do you actually let people buy in your co-op who can't afford the maintenance if the apartment is vacant for a while (or rented to someone who doesn't pay)? You must be desperate. Seems to me the one real role of a co-op board is not to let people buy who can't afford it."

Yes, there IS a fiduciary duty -- to the rest of the shareholders. And we absolutely have a "course of action" against them for any number of reasons, including not paying rent.

And yes, that's right. One of the main jobs of the co-op board is to ensure post-closing liquidity. One of the ways we do that is to make sure sublettors can pay the rent, thus assuring the liquidity of the shareholder to pay his mortgage and/or maintenance.

"You are implying that without this rental income, the shareholder is at risk of defauting without this income. Otherwise, if they were financially sound, this added rental income would not be a concern."

No.

If the shareholder his subletting his apartment, he is presumed to be living elsewhere at an ADDITIONAL cost. This is why we as the co-op board have to ensure his liquidity vis-a-vis his tenant covering his original housing costs.

"If the shareholder his subletting his apartment, he is presumed to be living elsewhere at an ADDITIONAL cost. This is why we as the co-op board have to ensure his liquidity vis-a-vis his tenant covering his original housing costs."

Big leap there, because it of course not possible that the shareholder moved in with parents for free or a crack house or anywhere else to save cash.

And do you require the tenant to pay the co-op directly the rent and then do you apply it towards the maintenance/mortgage???

If not, you have no way of knowing what that rent $ is being used for and it it is being used to pay the mortgage or buy crack

Apt boy, I'm not saying our system is perfect. But we use what we can to make the best decisions for our building.

I'm not sure we know that the condo overstepped its authority. Depends what the by-laws say.

Condo association bylaws do not supersede state law. Unless New York State law expressly gives them this authority, it is not theirs to assume.

"But we use what we can to make the best decisions for our building."

No, you are not. Best decision for the building is to get a rent-paying tenant in ASAP. Presumably the coop owner is subletting at the highest price he could get, so by your turning down the tenant because he has 39.5x the income needed instead of 40x, the coop owner loses several months of rent and will likely have to rent it at a lower price too.

And since you let someone in the building who apparently you are worried cannot pay the maintenance for a few months, obviously he will default and since all your other owners must be deadbeats too due to your lax building standards, I see no hope and nothing but bankruptcy in the future for your entire building.

I would strongly urge all buyers to stay away from NYCMatt's about to default building, as it appears to be very poorly run for a co-op and staffed by a bunch of pontificating macaroons on the board.

"Best decision for the building is to get a rent-paying tenant in ASAP."

It's a good thing you're not running a building. A sub-par tenant is worse than no tenant at all. Any landlord can tell you that.

I already said you should screen the tenant to make sure they are nice people. Tell me how their finances matter one whit to the building?

And if you use the "shareholder will default if tenant rent not paid" argument, you are admitting you let in financially substandard owners, which should scare people away from owning in your building.

"I already said you should screen the tenant to make sure they are nice people. Tell me how their finances matter one whit to the building?"

Seriously. Are you really this dumb?

don't call me Francis, call me psycho

Tenant moves in, doesn't pay maintenance to the coop, pays their rent to the coop unit owner.

Tenant moves in, doesn't pay maintenance to the coop, stiffs the unit owner on most of the rent.

What is the financial difference to the coop?

(this involves math, you might want to get some help, but I'll give you a hint, it starts with a z)

"What is the financial difference to the coop?"

Well, if you can extend your thinking to more than one step, you'd realize that the financial difference to the co-op is that in most cases, the shareholder now can't pay his mortgage or maintenance, because he's already paid the rent (or mortgage) on the OTHER place in which he's currently living.

You see, the vast majority of shareholders who sublet do so only because they can't otherwise afford to pay for TWO residences (their current unit plus the one in the new location).

"And do you require the tenant to pay the co-op directly the rent and then do you apply it towards the maintenance/mortgage???"

I have recommended to all Coops I advise that as part of any sublet, they MUST have a clause in their sublease stating that if for any reason the shareholder fails to pay their maintenance, the Coop has the right to request the subtenant to pay their rent to the Coop, and the Coop may use that as a credit on the shareholder's account. I know of quite a few Coops who do this.

However, if the subtenant can't pay, then what? The shareholder is off somewhere spending their $ on wherever they are living and won't have the money to pay mortgage and mtc because they are getting stiffed by the subtenant, and the subtenant won't pay the Coop either.

On the issue of Condos looking at renter's financials, almost every Condo has a right of first refusal on sales and rentals, and thus have the right to ask for information on the purchasers and proposed tenants to judge whether or not they are going to exorcise their right of first refusal. Yo my knowledge, there is no law saying the exorcise of this right must be based solely on price. There are even Condos who have changed their ByLaws so that renting units requires Board Approval rather than the right of first refusal.(If I'm remembering correctly, 2 Cornelia did this).

"You see, the vast majority of shareholders who sublet do so only because they can't otherwise afford to pay for TWO residences (their current unit plus the one in the new location)."

Big leap again (and already covered above)...I would argue the biggest reason for subletting a coop is financial distress by the shareholder or a really nasty crack/stripper problem

Matty - you seem to forget that you cannot act like a credit card company and pull a credit report on all shareholders each day to see if they are still credit worthy to live in your building...once you approve you are stuck and anything you do to prevent them from paying their bills (eg, deny a valid tenant) is wrong

"I would argue the biggest reason for subletting a coop is financial distress by the shareholder or a really nasty crack/stripper problem"

I really hope this is tongue firmly planted in cheek.