Speeding Up the Coop Process?

It's scary how a few people can hold up your life. Where is your lawyer? I would ask what legal remedy you have. What about the owners of the apartment. If you can call them and have them push from their side.

Another point, what about your realtor. Usually they know the bldgs., boards pretty well. I would strongly suggest you call the realtor, lawyer on a daily basis until you get in front of the board.

Reading this makes me wonder - is it possible to include a clause in a contract that the sale is contingent on the board's ability to review/decide within a stated period of time? I'm a recent buyer but have heard of a few stories like this one and it's just rediculous....nobody wins, incl the seller.

OP, if you're able to back out and don't get the place it's just as well....think about what would happen if you go to sell.

I'm a Coop president and I recommend you ask the owners to contact the Board. Owners track me down when they have issues - they are relentless. If they can't find me, they find the Superintendent to find out if I'm on vacation. Let the owners be the "bad guys". Although you are doing nothing wrong, you don't want to put a bad taste in the Board's mouth before you even get to the interview.

Typically, the delays come from: 1) the management company not processing the packages quickly (sometimes those applications sit and we don't even know they exist until the owners start complaining) 2) incomplete applications 3) holidays/summer vacations. Sounds like you are caught in the third category, as they were initially ready to interview you on July 12th. Many Boards don't meet in the summer at all, or skip August meetings. It also depends on if this Board will only meet on a Board meeting night, or is willing to assemble on any given week.

At my building, the entire Board is not required to do an interview. I've missed several interviews, but a handful of Board members proceeded without me. In my building, we will interview minimally with three Board members. You may have come across a building where certain Board members insist on being there. That could be a problem. You also don't know what the relationship is between the owners and the Board. They may have a rocky history and are in no rush to accommodate these people.

As for your fees lost, I don't know what recourse you have. When I bought my Coop, the Sponsor delayed the closing for quite some time. I got stuck paying to extend my mortgage committment TWICE. If you do wind up buying, keep good records of these added expenses, so that you can deduct them when you sell. And, I hope the Board responds to your prospective purchasers with a bit more speed (uptowngal is right on that one).

Don't be afraid to ask for the extra copies of your purchase applications back right after the interview - I would (just ask nicely). The Board should need to keep two at most (one for the management office, the other for the Board's records). I personally shred all the extras immediately (I collect them from the Board as I don't know how they plan to discard them). We keep one in a locked cabinet at the building for at least one year. After that, I typically shred dated applications. But, that's me - I'm a shredder. Identity theft is a scary issue. I doubt all Board's are that dilligent.

Good luck!

#5 you gave great information for those of us looking at apartments now. Thanks

now my blood pressure is REALLY rising. I typed out a long reply, but I had not logged in. After I did, I was taken to the main page, and my reply was lost to the ether...

Rather than retype it all, some bullet points

-still no reply/word from the #$^# board
-sellers contacted member of the board awhile back, and was apparently told "there's nothing I can do to help"

Any help in considering my options would be greatly appreciated:

-how to get my downpayment back (half of it is in non-interest bearing escrow account for the past 2.5 months)
-how to get reimbursed for the fees I have paid... credit checks, etc., including some that the building's management company cashed! but I am pissed, and I want ALL fees returned.
-how to get my mortgage lock fee back... $550 for 90 day lock, which will expire in less than 2 weeks

Interesting note...
-sellers lawyer told my broker a story about lawsuit
-apparently this unit was previously to be sold to a well qualified applicant (a doctor), who was rejected. that person is upset and is suing the board.
-however, when pressed for more details, the lawyer would not admit he had even told the story?!? wtf
-my lawyer looked into it, but found no evidence of any pending litigation... though maybe she doesnt know where to look?

If the seller/building KNEW of this supposed lawsuit (which may prevent them from selling the apt?), then werent they obligated to tell me? I never would have entered into the process!!! Of course, we have no evidence of any lawsuit at this time.

GEEEEEEZ

NYC_Coop, thank you very much for the info. I will definitely ask for the copies back. I've seen the stories on 20/20 or whatever on ID theft, and its is freaking scary. Your record/credit scores can be ruined for years and years. I hope your building appreciates your diligence in this matter.

You know, I had heard horror stories about coop boards, but my first purchase went so smoothly that I thought it was just hype. In contrast to this situation, I met with the board only 2 weeks (I think) after I submitted the package. Of course, I was only there after they rejected the high bidder, but hey, at least for me it was smooth.

You need to contact your lawyer to see what your options are. You might also want to contact a second lawyer since you don't seem to be too confident about the one you have now
(...though maybe she doesn't know where to look?) Alas, it is possible to get screwed around by co-op boards & it may be time to get tough. I'd be asking myself if I'd even want to be living with these imbeciles & having my future in their hands. Good luck & let us know what happens.

What about the Coop's attorney? (That's the lawyer that oversees the closing.) Can't your lawyer call his/her office to find out what is going on? The Board member who said "I can't help you" to the seller, should have at least provided an explanation as to the delay. What a lousy neighbor. Is the Board run by a dictator? Makes me wonder.

Just remember, if you attempt to get your fees back, your purchase application fee went directly to the managing agent (the Coop doesn't keep that money). If the Board chooses to refund that money, it will have to come out of the Coop's reserves because the property manager ain't gonna give up that extra income (believe me).

I know this doesn't help your situation, but I would seriously hesitate buying in this building at this point. If you have problems as a shareholder, these are not the people you will want to turn to.

I think the standard new york contract includes a provision that if the board hasn't reached a decision by the agreed-upon closing date by the parties (which is also in the contract), that seller is given an additional 30 days to get consent, and if the board hasn't come to a decision in that time, either party can walk and buyer gets deposit back.

unnamed, in my expereience contracts don't include the closing date, it's too soon in the process. Closing dates are a moving target, result of different variables (mortgage, coop boards, etc.).

What would be good to know - and maybe NYC_Coop can answer this - is whether contracts could include a clause such as this.

I would sit tight - I am a recent seller and went to contract in June and we still have not closed. The Board was away most of the summmer and it was August by the time they all rec'd copies of the board package. My buyer is irritated as well but summer sales are notoriously slow. I would try the closing agent at the company who manages the building. They are the liason with the board and should give you some info. I also think that your attorney is dropping the ball here - it is his/her responsibility to protect your interests and should at the very least be demanding some answers or a reimbursement of your down payment from the escrow account. The sellers lawyer also has a duty to be forthcoming with information relating to funds held in escrow and if he/she is refusing to release the funds then you are entitled to an explanation. The fact that they are still holding your funds makes me beleive that they fully expect the sale to go through.

Another thought - if the seller's attorney doesn't step up and find out what is going on or release your escrow funds - have your attorney threaten to report him/her to the Ethics Committee. I am an attorny myself and I know that this gets most lawyers' attention. All complaints are investigated by the ethics commmittee and it is a hassle no lawyer wants to deal with.

almost every contract has an "on or around" closing date that is legally binding. We sold recently and had to drag our feet for a little bit, but our lawyer told us that we basically had 30 days after the "on or around" date and after that the contract would default.

You should have your lawyer lean on the sellers if you really want the place and let them know you are ready to fly. After 30 days you have no obligation and should be able to receive everything back.

Use your lawyer -- that is what they get paid for.

Hi

You guys are correct... my lawyer said there is a clause in the contract that says I can back out 30 days after the on or around date.

My lawyer, the seller's lawyer, my broker and the sellers broker have been bombarding the management company with letters and calls demanding updates/meeting dates. The board finally replied... with a letter stating that they are still in the process of reviewing my application.

GEEEZ.

I am very tempted to go out on all the RE boards and NAME this coop, the management company and basically screw them. If I do it right, their resale values will be compromised.

The problem is all the innocent shareholders who would get caught in the crossfire. This really is just the board's problem, not the whole building.

Still... I am soooooo mad.

If I back out, I lose all the time and money I have already invested. If I go forward, I still lose some of the money I have invested (mortgage lock will expire). And the future sell experience may be a similar nightmare, though that would not be for another 5-10 years at least.

Maybe this is why the seller agreed to a very reasonable price...

I would attemtpt to get the seller to absorb some of the costs associated with the unreasonable amount of time you had to wait. Tell him you will activated the back out clause unless there is some price adjustment for your losses.

To back out or wait it out really depends on how much you want the apartment. Maybe this is the time to rethink and get out. Your nightmare experience will allow you to put in writing time lines etc. You're terrible experience is definitely something you and all of us will learn from.

agree with stealth1, i would note to seller the date when you submitted the package to the mgmt co. and the fact that your rate lock has expired, and propose he makes you whole for some of the increase in interest you will no doubt be paying. reading your post has made me much more thanful for the board process i went through.

"they are still in the process of reviewing my application"

Sorry, I've been on vacation for a couple of weeks, but I returned to read this line of TOTAL CRAP. Every Coop Board has a financial formula they use to determine financial suitability. Some are very rigid, others are not. (We tend to be a little more forgiving and give borderline applications a chance to interview.) I can sit in my kitchen with your application and run the numbers in a few minutes. I look at your credit history, the amount of outstanding revolving credit, your outstanding loans, your background check and may call a reference or two (although references to me are mostly nonsense, as nobody gives bad references). The review of your application will take me no more than fifteen minutes, plus added time for phone calls. Really, that's it. Then, I want to meet YOU. The interview is of most importance. Would I want to live next door to you? That's the bottom line. I've been doing this for 17 years and I've yet to see anybody default on the money. And, some of the most financially secure turn out to be the chronically late payers on their maintenance, because they're always traveling or consumed with their high-powered careers. Neighborly personalities are a more valuable commodity, in my opinion. Nothing worse that a battle between shareholders over noise. NOTHING. It gets uglier and uglier and more childish as the months progress.

Again, fifteen minutes, that's it! Each Board member spends that much time with your application. It just shouldn't take longer than that if we've been provided with a complete application, which is the management company's job to ensure that the application is in good form. With the amount of sales and sublets that we have to deal with each year, plus all the actual Coop work (monthly meetings, daily emails, weekly conversations with managing agent and super, inspection of projects, conversations with shareholders) we already devote too much of our personal time to this "job". We assigned one Board member to coordinate interviews. He keeps on top of the Board to make sure they have reviewed the application in a timely fashion, agree to meet the candidate and then schedules the interview.

I find it HILARIOUS that your Board wasted more time crafting a letter to tell you that they were still in the process of reviewing your application. What the hell are they reviewing? Are they calling your grade school teachers? How much time do they spend on their annual budget? I shudder to estimate that project.

And, BTW - I wouldn't feel so sorry for the shareholders if you rat out the building. They elect and re-elect those Board members. And, when a Board or management company is doing a lousy job, EVERYBODY in the building knows. If they re-elect them, it's because nobody else wants to take on the job, which is often the case.

NYC_Coop - what do you suggest roykirk1 do?

Hi

Yes, please, suggestions. Sadly, I admit I still want the apt. Plus, we dont have another option at this point. We stopped looking 3 months ago when we agreed on the purchase.

Some new info... we have sort of confirmed that someone else was rejected before me. Or dropped out. I found an entry where that person applied for a mortgage, about a year before me. He is a doctor, who I assume has good financials, probably better than mine.

I am starting to think this board is trying to screw the seller, by dragging it out. Based on the previous attempt, they have been trying to sell this place for at least 15 months now, and I am at least the second potential buyer. But what would be the point of dragging it out... if they really hate the guy, why not let him sell and be done with it.

I just don't understand.

Spoke to a colleague, and in her coop, her neighbor agreed to a sale in April, and the board did not meet with the buyer until early August. Is this normal? I appreciate NYC_Coop's inside view, but maybe your board is the exception and not the norm?

I have considered mentioning to the property agent that I will "out" both them and the building if things dont move along. But I am afraid this would just result in a 100 percent reject result. Afterall, they do not have to explain why I was rejected, right?

I have also considered going to the building, talking to the doorman, and talking to the residents as they come in and out, to find out what the deal is.

What do you guys think?

Maybe getting rejected by the board would be a good thing...you'd probably get your deposit back.

Would not recommend you lurking outside and talking to doormen or current residents. That will insure a rejection if the Board is informed. I would play hardball and tell your attorny to notify the seller that you are giving them 7 days to move on your application or you are activating the termination clause. This will tell you if they really have any intention of taking your application seriously or they are waiting for you to walk away for reasons only known to them. You might as well end the "cliff hanging" sooner reather than later.

This is a classic example of how malicious Sponsors and Coop boards attempt to destroy the lives of shareholders who may have challenged the Coop, managing agent or sponsor.

Your seller probably brought a law suit against the Coop or Sponsor and regardless of the outcome this is a classic form of retaliation.

You and your seller should investigate the Bill being proposed by Counsel-Member Hiram Monserrate of Queens.

Here is one of many articles I found on the subject:
http://www.gothamgazette.com/article/civilrights/20070522/3/2188

Although this legislation is geared toward minority discrimination the wholesale effect would be full disclosure of the approval process. It should be supported by anyone who thinks that Coops should be governed more by housing law and less by corporate law.

This sort of thing is more common in large building which are still controlled by the Sponsor. Sponsors are able to keep control of building by forming their own management companies and planting board members. These sort of real estate developers consider it entertainment to harass disgruntled shareholders.

goldfish, we don't know whether the place OP is looking to buy is a sponsor unit. As for the proposed legislation, it won't help him now...and there's much debate as to whether it would really improve the governance of coops and the buying/selling process (see related threads on the topic from a couple of months ago.

Hi

In researching what has happened so far... I notice that the management company never cashed my application fee check. they did cash the credit check ones. is this standard procedure? or is this a signal that perhaps the management company is in cahoots? (they claim they do not know anything, and that they are frustrated and waiting for the board as well).

Another week, another ... period of silence. Not a peep from the board or the mgmt co. We will formally withdraw and demand full refunds of all fees, including the mortgage fees, etc. Hope we can at least collect on that? Other apts have sold while we have been waiting, so clearly the board is meeting with others and completing transactions.

I am so mad I was thinking of also writing a letter detailing what has happened and sending a copy to every apt in the building. Grrrrrr...

The other owners should know what is going on. It impacts the value of their apts, as who is to stop the board from doing the same thing to them when they go to sell? They can't stop me, can they? Is there any law that would prevent me from sending a letter to each apartment?

ps - this is not sponsoe unit

Cut bait roykirk1. If there are other units selling than something is going on that is, and will be, out of your control. This is a sh&tty situation, but it is time to move on. Recover as much as you can financially, and then out the building if you want. Hey, look at it this way, if you believe the posters on this board your next place will cost 10-15% less.

no law preventing you sending those letters, but don't write anything but the verifiable truth or you could end up at the wrong end of a defamation suit if the board are loopy enough.

If it's any consolation, all the posters hate them by now, roykirk1.

uptowngal & roykirk1,

I never suggested this was a sponsor unit. You're missing my point! Please read my post again.

Your seller is the real victim in this situation. The Coop -- probably under the control of the sponsor -- is retaliating against the seller for some reason. Probably a lawsuit that the seller initiated. The Coop will probably ignore all requests to sell or sublet the apartment until the seller is ultimately forced into financial ruin. Even If he hires a lawyer to defend himself He'll just end up spending everything he has on attorney's fees.

If you really want this apartment I would work with your seller to enforce your collective rights. The seller may even give you some sort of compensation for your efforts. Open a dialogue. Start by Filing a complaint with the attorney generals office.

This is why intro 119 is so important. It would require transparency in Coop transactions and give both buyers AND sellers a way to challenge situations like this. Coops didn't even have to disclose sales prices until legislation forced them to in 2006.

And FYI, unless your buying into a Coop with 10 units or less, odds are that the Sponsor has complete control over everything whether it looks that way on paper or not. So by definition they're all Sponsor units. Your not buying a Condo.

I just happened to stumble upon this thread. I just want to express my sympathies to roykirk1 and family for all they're going through. I am just astonished to read about the behavior of the parties involved. (Needless to say, I've never been through a co-op process, so I had no idea.) I guess it's just a painful part of human experience to see evidence of how callous people are capable of being when they're in a position where the careless exercise of their power has no real consequences to them. Just heartbreaking. I hope your next experience is with people who have an ounce of conscience, rather than the "malignant neglect" (it's certainly not benign neglect) of these people.

You know, in situations like these, it would take only a little bit of effort on the Board's part (in terms of keeping roykirk1 informed) to not be total a&&holes, and yet they won't extend themselves to even expend that effort. I'm not a huge believer in karma, but it certainly would be symmetric for these people to go through similar hell whenever the time comes for them to sell their units down the road.

roykirk 1: Juiceman's advise is right on - something is going on that most likely has nothing to do with you. If other transactions are being completed then the writing is on the wall. They are either retaliating against the owner or a higher offer has come in and they want to get out of the contract. You need to talk to your lawyer about getting some of your fees reimbursed and if he won't help get another one. Further, when its all over, I would post the name of the buidling on this board to warn others of this unfortunate experience.

"This is why intro 119 is so important. It would require transparency in Coop transactions and give both buyers AND sellers a way to challenge situations like this."

Goldfish, it sounds good in theory but in reality it could prevent further communication because it could open up coops to more lawsuits. The proposal is in instances when an applicant is rejected by a coop and wouldn't help roykirk1 because this board hasn't even completed its review of the application.

"And FYI, unless your buying into a Coop with 10 units or less, odds are that the Sponsor has complete control over everything whether it looks that way on paper or not. So by definition they're all Sponsor units. Your not buying a Condo."

I don't agree with this statement. A Coop's offering plan defines how many seats there are on the Board. Upon the initial conversion, the Sponsor will have the majority of seats, which equate to votes (let's say 5 out of 9). In a defined period of time (let's say 5 years), the shareholders take charge (now holding 5 out of 9 seats). If you have a very cohesive Board who recognize the power of those 5 votes, they will win out on most issues brought to the table. But, if you have one shareholder that sides with the Sponsor, the sponsor wins on that particular issue (as the Sponsor gets 4 votes and only needs one more for a "win").

In my experience, the Sponsor often abstains from voting on quality of life issues (i.e. what time should the laundry room close?) and has NOTHING to do with the sale of shareholder apartments (they don't even know when we are interviewing people, or have applications in hand). Issues the sponsor takes great interest in revolve around money (what the Sponsor might have to pay) like flip taxes, or issues that may potentially affect sponsor sales, like renovation policies, apartment combinations, sublet rules...etc.

The most irritating thing a Board can do to a Sponsor is to assess against rebates (like the Star Rebate). Sponsor units are not entitled to those rebates, so in order to fulfill the assessment, the Sponsor has to write a check. It's a clever trick for Boards to do to raise revenue for the reserve fund (and we've done it in the past), but will get most sponsors really angry if sponsor sales are slow and no money is coming in. It's a slippery slope pissing off the Sponsor in general. We tend to save our battles for the really big wars. Fortunately in my building, we have had a rather good relationship with our Sponsor for 17 years.

BTW - If you are rejected, you don't get your Coop purchase application fees back (somebody suggested this above). Those fees go to the property manager for their time and costs of processing your application (which is highway robbery in my opinion). Same thing goes for renovation and refinance applications. All those fees are how property management companies boost their revenues - some methods are perfectly legal, some are in the grey area and others are completely shady. Property managers may buy supplies in bulk for all their buildings and not pass the discount onto you. They've been known to negotiate with oil companies to get a penny on every dollar of fuel delivered to your building. And, then there is the manager's cousin Louie the plumber, who magically shows up to repair your hot water during that "emergency". Fortunately, the attorney general has cracked down on a lot improper practices, but revenue-generating schemes still go on.