Will Co-op OK purchase & reno at the same time?

As far as I understand it would be very unusual to allow this, I totally get what you are saying I did the sema thing, I bought a co-op and then gut renovated it. My broker told me not to even talk about it and just submit the plans. It really up to you, its your purchase, if you feel that strongly about it then do it or walk away. I sold my place 6 months after the reno, decided the neighborhood wasnt for me and that coop board are a pain in general

Almost certainly, NO. I doubt any coop will approve a reno plan a the same time as approving a purchase application, as the general practice is to accept reno applications only from a (current) shareholder, in part because the reno plan is hypothetical until the purchaser actually closes.

The most I would expect is that a managing agent or Board President would say something like "based on what you have described, we would probably have no reason in principle not to approve your plans". Most boards care only about renovations that impact building systems (integrity of roof or walls, plumbing or electrical systems being to code and not putting an undue load on current facilities, no wet over dry, central air has been approved before, etc), so you should get "some comfort" in advance but no *guarantee*. Lots of buildings will entertain general conversations; I can't think of a single one that will do what you propose.

Sometimes your broker can facilitate that conversation; sometime the selling shareholder can talk to the managing agent or super or board member. IMO, if you were dealing with the most cooperative Board in the city, you might volunteer to pay for the Board to pay its engineer / architect / managing agent to review your *complete* plans up front, but I doubt the building would do it.

N.B., some buyers are well-advised not to discuss renovation plans unless asked specifically, because they may be a little thin financially. (Board may want greater liquidity from a buyer who will renovate.)

in the general rush here to condemn co-op boards for intrusive behavior, its easy to lose sight of the fact that an apartment renovation can impede on everyone else in the building. depends, of course, on the building, the elevators, the contractor, the super and the nature of the renovation. having been on many different ends of this issue, i would urge you to see the bigger picture.

A good broker can help. We briefly considered a wreck. The broker, who also happened to be a board member in the building, was able to give us extensive low-down on what had been done elsewhere in the building and when. We had a very good idea of what types of changes would be considered "routine," and what would be frowned upon. But, as I said in the other thread, no reno plan could be submitted prior to closing.

We saw two other apartments where the sellers had board-approved plans for certain renovations -- one to add a staircase to the roof, another to actually acquire and finish the basement space below. These were presented to us as "done deals" (i.e., we could move in and immediately execute the plans), but who knows... We didn't like either place enough to pursue further.

In short, no. The process really doesn't allow for reno approval before closing. Your general ideas, however, can be floated if you like to see if you can get any info from the management company/board/seller/agents re: what would commonly be permitted and what would absolutely not be permitted. For example, anyone buying in my building would be able to learn quickly that wet areas (bathrooms and kitchens) cannot be expanded even an inch over current dry areas. You could also learn that semi-pro ranges are permitted, closets and some walls would be generally permitted to be moved/removed in most situations, that recessed lighting is allowed to the extent there is x inches of space in everyone's ceilings, etc.

The reason what you propose really isn't possible is that the timing of the other "moving parts" of a RE sale of a coop aren't able to generally accomodate such a proposal. Generally, closings are expected to occur within 2 months after a contract is signed. The reno approval process takes much longer. First, you must retain an architect, have the place measured, have plans developed and drafted--about a 6-8 week process for any substantial reno. You will be working with your architect to arrive at what it is you actually want. Then, the plans you have approved from your architect have to be submitted for review by the building engineer, after which there is a back and forth with your architect and the engineer. When the engineer is ready, s/he submits a recommendation to the board. The board has to then meet to discuss the recommendation and issue a decision. This may be an approval, an approval subject to certain modifications, or a rejection. If there is an approval subject to modifications, the process begins anew although it will go more quickly in most cases the second time through. This period from the architect's submission through board decision can take 4-6 weeks or more. In total, 4 months can easily pass from closing to board approval of reno plans. And still, there is no guarantee city permits will be issued and if there is a problem, more adjustments may have to be made before the plans can be acted on.

I would say that realistically, for a buyer who really has their ducks in a row, a gut reno cannot begin less than 90-120 days from closing. If you are just doing cosmetic work (mouldings, painting, refinishing floor, then the time to start can be almost immediate since the board may require nothing more than you presenting an insurance certificate from any contractors.

To be efficient, I would recommend: (1) being forthright during the buying process about what you intend to do if you wouldn't want the apartment otherwise; see if you can get answers about parts of the reno that the coop's fixed policies might affect (2) line up an architect and even contractor candidates before you even close and have them in the wings ready to jump in; (3) finalize as many design decision as you can on your own during this time in terms of finishes hope to use, appliances, moulding styles, tiles, etc that you would use even if this apt fell through and you ended up in another similar apartment; this can save you a lot of time down the road; (4) if you so choose and your architect and seller are willing you may be able to have the architect gain entry to measure the place before closing (but if the apt falls through you'll be out the money you pay the architect for this).

These steps will reduce the time it ultimately takes to begin your reno. But there isn't much beyond this you can realistically expect when purchasing a coop in terms of speeding the reno process along for a substantial job.

Many thanks to all who replied for thoughtful answers and useful ideas. It still strikes me, though, that this is the way it IS done, not MUST be done.

I recently bought and really wished I had insisted on something just like you are suggesting, Ken. It's a nightmare and very frustrating and inefficient to be paying for 2 apartments at once while waiting almost 6 months just for the work to start.

There may be hiccups in the by-laws but I'm sure there are workarounds. For instance, you can work out the plans with your architect and pick a contractor, but make it a condition to closing that the seller (as current shareholder) first get the renovation approved, and then apply for the purchase approval once that renovation approval is in hand.

Basically this would mean the seller would be living in the existing apartment for an extra 6 months while the extra layer of approvals goes through. I can understand why brokers would resist, since they want to get the closing done and collect their fee, but at the end of the day if yours is the best offer on the table then everyone benefits by catering to your needs. You should really push hard for a process that allows actual work to begin on your renovation shortly after closing.

Most seller's would bristle at idea of gumming up the sale of their apartment for many months to go through a reno approval for someone else and then risk it all falling apart leaving them nowhere 1/2 year down the road. To engage in all this effort for a prospective buyer strikes me as an unreasonable expectation. UNLESS, the property is a white elephant and has sat for a very long time or the offer price is extraordinary. Virtually no prospective buyer would demand this, so if one does, there is much incentive for a seller to keep looking for additional buyers.

Also, how would the contract be worded exactly to make closing contingent upon approval of reno? Approval of what reno? The dream plans of the prospective buyer? What if the board says yes to 98% but no to 2% of the reno but the buyer feels that 2% is material and a deal breaker? What objective standard would be used? Boards/building engineers rarely approve plans wholesale--the tweaks may be minimal, but they'll exist. What assurances does the seller have that the buyer would submit reasonable plans? If the buyer wants to submit plans adding a skylight by punching through the roof of an apartment building, the seller will have wasted much time waiting for such a silly plan to be submitted for approval. I'm curious what objective standards of "approval" others in favor of this arrangement would suggest.

"It's a nightmare and very frustrating and inefficient to be paying for 2 apartments at once while waiting almost 6 months just for the work to start."

I hear you on the inefficient piece, but why is it a nightmare and/or frustrating? Did you not know it'd take this long when you put in your bid?

@kylewest: I guess you'd have to have a complete renovation package attached to the purchase agreement, and the condition would be that the board approves that package with only such changes as are reasonably acceptable to the buyer. Yes, there would be cost to the seller, but depending on the situation it may not be too large a cost. The seller needs a place to live anyway, and if they are staying in the city after the move and not overpaying on maintenance and mortgage then it won't be the end of the world to delay moving for 6 months.

@inonada: Yeah, stupid, stupid me for not doing some diligence on the renovation process. I was not too much in favor of buying anyway since I'm pretty sure the market won't hit bottom for a few more years yet. My wife was really pushing the purchase. Had I known how long the renovation process would take I certainly would have put my foot down.

I've said this before, but I think the advice sometimes given to prospective purchasers that they should keep mum about potential renovations during the interview process is terrible. If you want to renovate, by all means let the board know - and mention specific things you are thinking about. If they express reservations, much better to know before you purchase than after. In our experience, they happily engaged us in our discussion, and mentioned a couple of things that we didn't even think we'd be allowed to do (vented dryer).

This way, when you present the plans after closing, it doesn't come out of left field, and they are likely to be more amenable. If/when you have some problems, they are more likely to be flexible in helping you work through them vs. someone who blindsided them - its just human nature.

I just don't understand the upside of trying to conceal your plans - besides for the brokers who would get their commission and leave you holding the bag.

There is only one situation in which keeping quiet about reno during contract period makes sense: if you want the apartment even if it must remain in its current condition. Some people would LIKE to renovate but don't feel the NEED to renovate. If such is the case, and you are all but indifferent to whether you can make certain changes, then there is generally no great up side to announcing your intentions to renovate and there is a potential downside that for whatever reason this would turn the board off to your purchase.

Ah yes, the wife. The upside: you can hold this over her head forever. Trust me, it'll make for a great marriage. (OK, I'm being sarcastic.)

The broker actually sent us two different printed coop board interview tip sheets, each of which advised applying purchasers not to bring up renovation plans and to downplay them if asked directly. I contemplated ignoring this advice but was a little afraid that if renovation were an issue and we were rejected, the seller would try and keep our deposit on the grounds that we deliberately brought up renovations to spook the board, contrary to the broker's advice, and as a result weren't using reasonable efforts to close the deal.

I consider this an example of institutionalized shadiness on the part of brokers. At the very least (if you're still reading, Ken), even if you can't get approval of renovations to be a condition to closing, you should at least insist on a provision in the agreement that says you're free to tell the board about extensive renovation plans, and you won't be responsible if the board rejects the sale because of those plans.

Luckily it didn't affect us because the board itself initiated a very open discussion about the need to do an extensive renovation of the apartment. They encouraged us and put us in touch with the building manager and some contractor references before closing. Unfortunately we were already in contract at that point, and at the time of signing didn't know that it would take a 6 month approval process (between the board and the DOB) just to start the work.

I don't understand - you thought that you could be held responsible for telling the truth? usually it works the other way around.

Ha. Or telling it to the wrong person, I guess.

Not that I think they would have won, but I didn't want to be in a position of having to sue.

Is board approval required to replace kitchen cabinets/appliances and bathroom tile/vanity with no change to the floorplan? I spoke to the super who said he could do all the work. He didn't mention I would have to go through an approval process.

Would depend on the rules for your building.