coop board deposit

No. Co-ops are by definition subject to board approval.

i dont understand

sale is contingent upon board approval

if the board turns you down, you get your deposit back.

my lawyer saysif they come back and ask for more information and I cannot supply it they can say I am acting in bad faith and the seller can try and keep deposit I am very worried

if you act in bad faith the seller has to prove it... usually that requires litigating. my buyer admitted they were going to act in bad faith and we worked out a deal.
if the board rejects you, you get your deposit back

If the seller tries to keep your deposit, you slap a lien and file a lawsuit against him so he can't sell his place. Then you file action against all of the Board members in their personal capacities. Watch how fast they give up.

I think people are offering you advice without knowing all the information necessary. The law is not an ass. Of course there are things you can do that may cause a seller to withhold your deposit. There are actions you can take in response. But before it all gets to that point, the situation itself has to be better understood so you can get more fitting counsel.

For example, if the board determined something in the packet appeared fraudulent (say a forged financial statement) and asked for additional documentation to support the fact that the statement was in fact genuine, you would likely have to provide that information. If the rejection came as a result of the board believing you had forged documents, you bet the seller might keep your deposit and that litigation would result.

So before going off half-cocked, more information would be needed to better understand what it is that the board was focusing on, what area they were concerned about, what supplemental material they requested, whether that request was reasonable, whether your response to the request was reasonable and in good faith, etc. The circumstance you describe is in itself a bit odd sounding, so that makes me think there's more information here that is relevant than you have thus far provided.

Everything is legit, the situation is just that more info being asked for that they say is needed to deem what we presented 'complete' and its going a bit over the top. The question is as long as everything is done and presented correctly and to the best of our ability can the deposit be withheld.

can you be more specific?

don't see an answer to KWest's ? OP so not bloody likely you'll get the answer unless you provide some deets

KW hits on the important points. But as far as broker's deeming the application "complete", it means diddly squat. Firstly, neither of them represent the Coop or can make decisions on behalf of the Coop, and therefore can't bind the Coop. Secondly, Coops are given a fairly wide berth under the Business Judgment Rule to ask for whatever information they deem they need to make a decision. I agree that them asking you for more information and you flat out refusing to provide it is a fairly decent reason for a seller to say you did not act in good faith. The only one who can deem the application "complete" is the Coop Board: not the brokers, not the seller, not you. The only chance I think you would have is if the Managing Agent typically made a fairly thorough examination of packages before passing them along to the board and has regularly held back incomplete packages, but in you case deemed it "complete" and then passed it along (because of everyone involved, they are the only one's who can possibly be deemed to have the authority be representing/binding the Board). But even then, unless the Board had a history of always accepting whatever the managing Agent passed along as "complete", I still think the Board would be the one's to call the application "complete" or not.

Face it; you made a commitment (odds are, I haven't seen you specific contract) to "amke you best effort" to provide whatever information the Coop Board required. I don't see how flat out refusing to provide anything they ask for because YOU deemed in unnecessary/over reaching could be deemed as "making your best effort".

"If the seller tries to keep your deposit, you slap a lien and file a lawsuit against him so he can't sell his place. Then you file action against all of the Board members in their personal capacities. Watch how fast they give up."

Firstly, as far as slapping the individual board members personally, odds are this will get you no where. And unless the Coop is terribly run, they have Director's insurance so they will simply let the insurance carrier handle it.

Secondly, while making a claim against the owner and the unit IS the right way to go, it's a much better tool in a rising market: if the seller knows he won't get anywhere near the price you paid if he returns the deposit, he will be much less inclined to "just move on". But also, people seem to be totally unaware of the cost of litigation: in a lot of cases, litigating to get your deposit back can be a losing proposition due to the extremely high cost of litigation. People act like "just slap a lawsuit on them" like it's free. It could easily run you 6 figures by the time it's done if it actually goes all the way through trial (and then there's appeals).

"if you act in bad faith the seller has to prove it... usually that requires litigating."

I'm afraid it's the pother way around: it's not the seller who has to litigate to keep the deposit, it's the buyer who has to litigate to get it back.

hold on...the deposit is in escrow. it cannot simply be released to either party. and i question whether or not the unit can be sold to a third party with a lien hanging out there. it is in the interest of both parties to come to a resolution. yes, all things being equal, I would rather be the seller because i'm not out of pocket; but, as you point out, in a falling market, as the seller, you want to move on to another buyer as quickly as possible.

30yrs: I forgot to comment on the "both brokers approved it" line. Good catch.

There is something else weird here. OP wrote: if the board hired at your expence an out side person to look over package...

What the heck does that mean?

"There is something else weird here. OP wrote: if the board hired at your expence an out side person to look over package...

What the heck does that mean?"

And I forgot to ask about that one.

"hold on...the deposit is in escrow. it cannot simply be released to either party. and i question whether or not the unit can be sold to a third party with a lien hanging out there. it is in the interest of both parties to come to a resolution. yes, all things being equal, I would rather be the seller because I'm not out of pocket; but, as you point out, in a falling market, as the seller, you want to move on to another buyer as quickly as possible."

You are correct about the escrow: but depending on what the contract says about the escrow, it can be released. Face it, if it couldn't be, then what's the purpose of having it? And it's almost always in the escrow account of the Seller's attorney and if they deem there is a default, unless there is a notice provision, the deposit can get released before the buyer gets a chance to file a suit to stop it. Also, I'm not sure what the concept "placing a lien" on people's apartments is. You can't just go an put a lien on people's property. If you get a judgment, fine, If you've got a Mechanic's Lien, that's fine. but Just place a lien because you feel like it? based on what? Just because you MAY have a claim doesn't instantly become a lien.

Typically, when a board hires "an outside person" to look over your package, it's a financial investigator of some sort -- no one is bringing in a copy editor.

It sounds like the board wants more detail about the nature and perhaps the origin of your finances -- I can't see your specific contract, but your lawyer can, and if he or she thinks you're subject to "bad faith" being raised, then you probably are.

So your choice is pretty clear here: provide more information (despite your feeling that the request is "over the top") or risk your deposit.

ali r.
{downtown broker}

andrew1, I think there is more to the story here than we are being told, maybe significantly more....in any case we would like to know how this turns out. Hope it goes OK for all. Co-ops are not for everyone.

{Manhattan real estate agent.}

I have no experience with this but am curious from those who do - 30 Years, Kyle, lawyers, etc: have you ever actually seen a seller successfully retain a deposit from a potential buyer who was refused by the board?

Please no urban myths, am just curious if anyone (but specifically the most experienced among us) has actually witnessed this? What were the details? Thanks!

i can share my experience... not exactly your question but will share.
almost three weeks after putting down the deposit the buyer asked to get out (it was last year when the market collapsed). the buyer was foolish enough to put in emails an implication (not outright) that they would throw the interview to get out due to a crazy reason i would not care to share. when we came down to the wire their lawyer verbally admited they would do the same.
They offered me a very small amount of $. I countered asking for the bulk of the deposit telling them i would litigate. Everyone was shocked but they accepted.
i am not a lawyer but was told it would have been almost impossible to get the deposit, the apartment could not be sold in the interim and it would have been costly. We never got there so who know,
I did keep about 70%, everyone- the lawyer, the brokers were shocked.
But still this is not a case of keeping the deposit for a board rejection, it was they buyer not acting in good faith and we had some emails to support it.

OP, if the folks reviewing your applications request more info, why not provide it, or explain to them why it may not be available?

Or why not just ask your lawyer? This sounds strange - if your atty is already telling you that not providing the info could be viewed as an act of 'bad faith' and you're worried, then it seems as if you are hiding something.

Thanks RE2009. Everyone was so shell shocked in the Fall of 2008, behavior reflected that. Your buyer might have put up more of a fight had his/her overwhelming emotion not been "thank god I don't have to buy that apartment right now."

If that is the only example anyone can come up with, I'd guess that Andrew1's deposit is relatively safe.

I read this a bit differently -- if what you are really saying is that you went to contract, the board requested a third party review due to something such as off balance sheet liabilities, or unverified income, in order to make you acceptable -- maybe we ARE talking about a gray area of bad faith here. If you overreached in your package -- and they are catching you in the lie -- that is a different story and you should lose your deposit as you are asking the seller to risk the market timing why they waited for you.

So you do need to be more specific. If they ding you-- bacause you fabricated crap that does not pan out -- you did act in bad faith... if you get dinged -- but you were completely on the up and up -- (not sure what the additional information you seem unable/unwilling to provide) -- then I suspect you will be turned down and you will get your deposit back.

"I have no experience with this but am curious from those who do - 30 Years, Kyle, lawyers, etc: have you ever actually seen a seller successfully retain a deposit from a potential buyer who was refused by the board?"

I could tell you to ask Linda Stein about her unsuccessful suit against Calvin Klein, but...........

30yrs - LOL, but is that being really disrepsectful?

I hear Steins estate is suing Douglass Elliman for hiring that maid.

(PS Why I hate Google: I know of the Linda Stein / Calvin Klein case, but no matter what search terms I put in I can't get Google to link me to ANY info on it).

If the Board asks for more information and the buyer refuses to provide it he is acting in bad faith and could loose depostir wheather he actually will could be determined by a lawsuit expensive to both buyer and seller but lucrative to lawyer....and I have had a case where this happened years ago