Board Approval and Price

Many coops are desperate because they haven't gotten any revenues from flip taxes in the past few months so I suspect they may be more flexible. What are you offering per SF?

"broker", "honest", "board would turn it down" ?????????????????????????

Really, what could you be thinking?

Why are you listening to the brokers? It is in their best interest to get you to offer a higher price. Make the offer you're comfortable with, and let the seller determine if it is acceptable, and if it should go to contract and go to the board.

And that apartment at 35 Park is shown as "sold" though the sold price hasn't yet been listed - and the buyer definitely went after it when you posted the price you had offered - so, board accepted the buyer even at a low price.

You're talking yourself into immobility again!!

Hey my 997 turbo got another 2k miles on it. If you don't buy it now for $90k, I'm gonna jack it up to $100k when I add another 1k miles on it.

Flmao. $250k for ur coop in 2 yrs and a 158th w heights condo buyer crying like a baby.

It's illegal for boards to turn down purchasers for price reasons. The seller should advise them of that in advance of receiving your package. A warning should be enough.

but steve, happens all the time. happened to me as a buyer. was told not to waste my time.
who wants to make a mission of dealing with a dirty coop board? that why they get away with it.buyers move on...seller are in a nutvise controlled by the board..it behooves neither sellers nor buyers to fight the boards whether in court or otherwise..all parties want to transact and move on

i agree with ubottom...why waste time/money if you know they will turn you down?

ubottom, you as a buyer have no cause of action against a board for that. The seller does, however. If you agree on a price and are happy with it, a nice note to the board members from the owner threatening legal action for damages, request for an emergency injunction, etc., if your package is rejected, can do wonders. If the owner claims price discrimination, the board will have to prove that it wasn't.

are you sure about that steve?

There is ZERO evidence of ANY Co-op board in the NYC turning down a sale due to price. Take a step back and realize that this is a straw-man from the broker to get you to bid higher.

"Gee, it's not me. Your offer would be great, but that big, bad co-op board keeps turning down low offers so you better make the offer higher."

Seriously, you can't see through this charade? In a good market the lie is that there are other offers at or above ask. In a bad market the lie is that the co-op board will reject any low offers. The goal of the lying broker is the same in both cases.

Don't blame the board...it's all a lie.

This indeed happened to me over the summer. The sellers accepted our price on the apartment but then the appraisal came in 20% above our contract price. Sure enough, the board refused to meet with us despite us having very strong financials. The sellers had an off the record conversation with the board member and determined that it was due to the price. We agreed to raise our offer by about 5% but only an additional 15-20% would have gotten us the apartment. At that point, we had no choice but to walk away as we didn't want to sit and negotiate with the Board when the sellers had already accepted our price. The worse part was that we had no recourse. In NYC, the Board can pretty much do whatever it pleases with no explanation. The only chance you, as a buyer, have in fighting them is if the seller (who actually can claim real damages) is willing to fight the Board. However, in our case, they did not want to "antagonize" the Board for fear that they would reject their next buyers, too.

This absolutely happens and it is infuriating.

not true wave my mother was the broker way back when and she knew the whole situation inside out

and steve, sellers are in a nutvise where litigation with the board will slow seriously the progression of their lives..they simply deal with it in the interest of moving on...happens all the time

The more I learn about coops, the less I want to buy one.

bv and ubottom - these just don't pass the sniff test.

In this market where appraisals are coming in lower than the sales prices you had your appraisal come in 20% higher...come on. And no offense to your mom and her memory, but co-op boards are not interested in breaking the law.

What is there to gain?

Have the seller sue them...not good. Have the seller not be able to afford to pay their maintenance...not good. Accept and approve a reasonable bid and move on...good.

finally we agree on something. i knew it could happen. having been involved with a co-op board, rejecting applicants was not easy--no one wanted to be the bad guy who said it first. and to reject for this kind of reason? i find it hard to contemplate the nature of the discussion---too easy to get yourself in big trouble.

I think coops MOST definitely turn down on PRICE but its never known as the reason but everyone knows it is...

have you ever been on any kind of non paid board?

nope....BUT everyone and I mean everyone seems to be talking about how boards in nyc reject base on price......so....im just believing it.....

Mhillqt - possibly boards are rejecting on buyers' financials - which may tie in with lowball prices.

CC: are you saying that you think it doesn't happen? It does indeed happen, to my personal knowledge. Not so bad in a bubble market, but in a down market - yikes, boards are asking for lawsuits.

CC: are you saying that you think it doesn't happen? It does indeed happen, to my personal knowledge. Not so bad in a bubble market, but in a down market - yikes, boards are asking for lawsuits.

threatening to sue a board is useless unless you are willing to actually sue - and you're an idiot if you do sue because it would be an enourmous waste of time and money - it would be, at the minimum,14-18 months until you got relief, if any, and even then, why would you want to move into a building that you just sued in court and made them spend a ton of money - in fact, it might backfire and cause the building to raise your maintenance to pay for the legal fees

to be clear...i have no idea whether it happens or not.

i find it hard to believe that it does because of my own experience. perhaps things are different in ultra high end park ave, 5th ave places with boards that have been in place for years.

merely trying to conspire with other board members and hoping that no one spills the beans in a moment of pique seems to me to be far more risky than what it might be worth.

despite matt's absurd postings to the contrary, my experience (and others that I have discussed it with over the years) of being on a board was a thankless job that leads to a lot of people being angry with you or others over the slightest thing that they personally disagreed with.

ph41:"Mhillqt - possibly boards are rejecting on buyers' financials - which may tie in with lowball prices."

The Board rejection occurs AFTER the buyer and seller have agreed on a price, "THE CURRENT MARKET PRICE". Therefore, it is not a lowball. Lowballs are generally bids that are rejected as being absurdly low. Ergo, the concept of "lowball" has nothing to do with a Board rejection based on price.

Stevejhx's penchant for offering nutty legal advice and encouraging lawsuits that are utterly detached from the way the real world operates is nothing new. Steve has interesting ideas and views on a variety of topics, but as a translator by profession the quality and accuracy of his legal counsel is about what one might expect. I surely hope no one reading this thread would think (1) a seller should pen such a "nice note" to a board or (2) believe suing a board over something like this would result in anything other than interminable litigation, spectacular legal fees, and very likely nothing to show for it in the end.

I have heard these appocryphal stories of board rejections based on low prices from time to time over the years on here. But in each case something about the posts always left me wondering about the finances and other circumstances of the applicant and what the other side of the story might be.

and really, why bother torturing yourself over a silly rejection? good riddance if they turn you down, and if you get accepted, good for you

patient09 -of course the board rejection occurs after agreementon price, AND after contract. read the comment again - if an accepted offer(and contract) is at a very low price call it what you will,(low price, steal of the year) perhaps the buyer's financials might not pass board scrutiny

rejection builds character

I think it may happen but is less likely to happen in this environment. As for suing, you (or the sellers) will never be able to prove it and shareholders rarely have much to gain from suing their coop over issues like these.

"It's illegal for boards to turn down purchasers for price reasons."

Really? And specifically what law makes this illegal?

"And specifically what law makes this illegal?"

There are 2 cases on this issue where the decisions were the opposite of each other. And the one where the court ruled against the Coop setting "floor prices" wasn't in this department, it was in Westchester.

Oh, Lord, the_president. PLEASE do not engage Stevejhx on his legal pronouncements. He's translator, not an attorney.

This may be a dumb question , but are people arguing that the board wants to reject a low price because it will damage market value of the buidling (as if they can somehow stand as an island)..or what?.

Personally, I think Coops should NOT, in general, reject sales based on price. Think about this: which is worse: having a sale go through and be in the past as soon as possible, or have a low priced unit ON THE MARKET at a LOW PRICE for a LONG TIME and still UNABLE TO SELL? You can always make excuses as to why a unit sold for a low price, but if one (OR MORE) unit(s) are on the market at a low price and can't sell, it does more damage to the prices in a building than a low sale which went thru and in a few months will be too old to use as a comp.

More importantly, the vast, vast majority of people will never look at acris or this site or any other to find out about what price this "low sale" was, but MANY will see it back on the market and staying on the market every day on broker's websites, newspaper ads, etc. And especially in a market where sales are slow, you run the risk of having multiple units on teh market COMPETING WITH the unit who's price is "too low". What happens then?

And what happens when the unit owner(s) stop paying their maintenance because they can't afford to carry their units? Even though the Coop is ultimately protected because it can foreclose, what looks worse: a low sale or a Coop which has lots of mtc arrears on it's books and units which got foreclosed on because they couldn't sell?

There are lots of Coop attorneys standing up for Boards with this attitude that setting floor prices is good because it "protects the values" in the Coop. Well, as much as i get on Broker's cases for not knowing what they should know about Coop Law, I get on the cases of Coop Attorney's who really don't know shit about finances advising their clients to do things which THEY don't know about.

Oh, and let's not forget the flip tax which the Coop forgoes when it rejects the sale as well.

"This may be a dumb question , but are people arguing that the board wants to reject a low price because it will damage market value of the buidling (as if they can somehow stand as an island)..or what?."

Unfortunately, jim, this is EXACTLY what they are arguing, and they are being led to believe it's a good idea by their Legal Council(s)

"many of them have been honest and told me that eventhough the seller might accept my price ...the board would turn it down"

Just to echo that I wouldn't attribute this to the broker being honest as much as using it to tell you why it's futile to try to get the unit for market rather than an inflated price.

PS If a building had floor prices, I'm not sure I'd want to be a part of that Coop since they are going to be wrong headed about LOTS of things.

its just another version of shoot the messenger. we love to ignore any and all facts that don't work for us.

In the vast majority of coops, I do not believe legal counsel (not 'counsil' btw) are advising it is good or bad to decline an applicant under the circumstances being discussed here. Much more likely, to the extent a board consults with legal counsel, the question is regarding the legality of a possible board action--not on the financial wisdom of the move. Few attorneys I know would wade into the area of what a board ought to do on a financial matter--they tend to leave that to a board's business judgment.

But as 30yrs points out, there are so many downsides to a board tinkering with sales in this way that most boards are savvy enough to figure this out. And frankly, if I were rejected because the price were too low, I'd be relieved to have been saved from joining a coop that thinks in that way and whose shareholders believe the board members reaching such an off-base decision are the right ones to lead the building. Consider such a rejection, if it were to occur, a gift.

(lol. you're a faster typer than me 30yrs!)

"There are 2 cases on this issue where the decisions were the opposite of each other. And the one where the court ruled against the Coop setting "floor prices" wasn't in this department, it was in Westchester."

For legal purposes, that does not matter. A Manhattan case is just as binding on Manhattan as a case involving a co-op in Westchester or even Buffalo. However, I have never heard of a case involving co-ops rejecting a sale based on price.

Actually, a trial court decision in any department isn't especially binding on any other court. One judge of concurrent jurisdiction cannot really bind an equal judge by issuing a decision first. An appellate decision is a different story and technically an intermediate level appellate decision in one judicial dep't is binding on trial courts in all departments. Practically speaking, each appellate division pretty much decides things the way they want to without much regard to the other departments if it suits their mood. Highest court, of course, binds everyone, In NY that is the Ct of Appeals

"For legal purposes, that does not matter. A Manhattan case is just as binding on Manhattan as a case involving a co-op in Westchester or even Buffalo. However, I have never heard of a case involving co-ops rejecting a sale based on price."

Sorry, this is just incorrect 9as kw points out). There are differences in more than one L&T "state of the law" and therefore standard practices between the first and second department. The one I can think of off the top of my head is the right of a Sponsor to increase rent to whatever they want on units they retain, but have been vacated by the non-purchasing tenant and rented rather than sold.

"In the vast majority of coops, I do not believe legal counsel (not 'counsil' btw) are advising it is good or bad to decline an applicant under the circumstances being discussed here."

Our experience on how much Coop Attorneys stick their noses into Coop Policies other than to simply give opinions on whether or not they are legal is vastly different. Example:
"Aaron Shmulewitz, another Manhattan co-op lawyer, disagreed. “I don’t see why co-op boards should not be doing this,” he said. “Board members have a fiduciary duty to protect the financial interests of the corporation and all its shareholders. And allowing sales for below-market value would damage the financial interest of the co-op and its shareholders.”"

"And allowing sales for below-market value would damage the financial interest of the co-op and its shareholders."

Pop Quiz: can anyone see anything wrong with this statement?

Hint: arm's length contract

"And allowing sales for below-market value would damage the financial interest of the co-op and its shareholders.”"

LOL.

What is a fair market price? A price arrived at by a willing buyer and a willing seller. And the co-op board can overrule this price and deem it "below-market".

The stupidity of co-op boards is not to be underestimated.

was just told that a particular seller has friends on the board and they would turn down certain price points even if seller accepted price......so YES, ITS HAPPENING!

why would the sellers friends screw him in this manner?

seller didnt accept pricepoint.....but is looking to board to come up with something they would accept...

Mhill- who told you this? The broker?

yes...

this conversation is absurd.

1. Board turn downs are very rare under any circumstances. People who are unlikely to be approved almost always get winnowed out of the process long before the board actually meets. Coop boards are a pain in the ass, but when it comes down to it they rarely reject.

2. No board do not reject based on price. They just don't. It looks awful for an apartment to sit on the market, go into contract at a low price, and then go back on the market unsold. That's exactly what a coop board wants to avoid. Blaming the board is a great way for brokers and sellers to encourage you to increase your bid without seeming greedy.

3. It is virtually impossible to mount a successful lawsuit against a coop board. A surefire way to be rejected by the board is to threaten a lawsuit in advance of their meeting (or for the seller to make such a threat). The last thing the board wants is a litigious, trigger-happy

4. Coop board have the right to reject you 'at will.' That is, they do not need a good reason. If they don't like your breath, your sweater, or your real estate agent, they can reject you. But while they don't need a good reason, or any reason, they can't have a bad reason. They can't reject you because of your age, religion, race, ethnicity, gender, or sexual orientation. Nonetheless, it is almost impossible to prove that a suspect reason played a role in your rejection since the board members can always claim they just didn't like you. It's a bizarre legal situation.

sorry for the typos. i'm multitasking

happy renter....TOTALLY DISAGREE....boards do reject and they do reject on price.....i just told you several brokers that ive been working with have told me that 'no way would board approve that price - ie lowball....'......

Mhillqt: What happyrenter and others are trying to tell you is that what you have been hearing is just another broker tactic. When times were good (and sometimes even now) brokers would say, "I've got an offer close to ask, so you better go in at ask." Since that just doesn't fly anymore, the new strategy is to say that THEY would like to go with a lower price, but the big bad board won't allow them to, so you better go in at ask. Different strategy, same result.

please refrain from quoting brokers on any subject. you can believe their nonsense if it suits you, but spare us.

still disagree....brokers these days want to sell.....they need the income...the boards are preventing lowballs...in my opinion

of course the broker wants to sell. what kind of promises do you think they make to get the listing in the first place? note comment #2 from happy renter above. it is not in the board's interest to have apartments sit on the market.

I disagree columbiacounty

I've been on a board. No one wants any impropriety or any reason that anyone could ever consider a lawsuit. A low price would never be discussed therefore it would be difficult to get everyone to agree to reject based on price. Boards are naturally contentious. It would take quite a conspiracy to reject on price. I think you are wrong mhillqt. If you want to bid successfully, don't listen to the broker. Just make sure your bid gets to the seller and if rejected, move on. There is always another apt.

"It's illegal for boards to turn down purchasers for price reasons."

Only if you can prove that's the reason for the rejection.