Coop Blues

Im on the Board of my coop so might have some perspective.
Everything is determined by the Bylaws of the coop. In most cases, the Board would have to force your Mother to sell the unit. Your Uncle was the approved shareholder not her. Was she living in the apartment before your Uncles death. If so, was she living there in compliance with the buildings guest policy? (My building does not allow a guest to occupy the apartment unless the shareholder is present). Another possible factor- was the maintenance always paid on time? I doubt that a private investigator would be of any help. The bylaws govern the Board.

1. Yes and yes, The proprietary lease will specify which relatives, if any, can occupy without board approval. It sounds as if niece isn't included in this case.

2. Guests are usually permitted only when the owner is present. The owner, not his corpse.

3. None, really. If you've got money to waste, you can take the board to court and try to force things. First, I'd spend a few hundred bucks on a lawyer, who'll tell you whether it's worth proceeding.

Thanks for your replies, and NWT, thank you for your condolences.

Tenants may permit up to 4 relatives to stay in the unit as guests for a period of 28 consecutive days. As the tenant is deceased, it's my understanding that the estate is legally the current tenant. Its executor may therefore designate guests.

sma10022, who becomes the shareholder upon the shareholder's death? If it is indeed the estate, then is the estate in a position to designate guests in accordance with the building's guest policy?

NWT, nieces are allowed in cases where the shareholder has no natural children. My poor uncle was gay and childless.

Thank you again for your kind attention.

This is a question for a real estate attorney. The issues of law are far from novel. The by-laws set the rules and the board must follow them. As must your mother. Coops are in a sense like a partnership of shareholders and none is permitted to simply pass his share of the partnership along to whomever he chooses. It is the entire point of a coop. Nothing nefarious--just a belief that the coop structure helps insure good neighbors and a financially sound building. Anyone is free to disagree and to avoid purchasing a coop. If the neighbor truly is interested, she may be willing to pay a premium for the apartment--that's something worth exploring. Otherwise, your mother is free to sell the apartment to whomever she pleases so long as they are financially qualified. Cloak and dagger stuff is not the rule in the vast majority of coops. Now, if you are talking about a rarified strata of coop like 810 Fifth Avenue or some such ultra-elite building, then the ordinary rules do not always apply and I take back what I said about cloak and dagger stuff. Among a certain strata of building, people will practically kill to get a rarely available unit or to insure that only the "right" people purchase it. If you care to supply more information, we may be able to help you understand why your mother was declined. Things like type of building, general location/# of units, broad strokes of your mother's finances, any background problems with the unit/your uncle's ownership/your mom living there/past board involvement.

I wish you'd brought in a broker beforehand. Purchase applications can be very nuanced, and sometimes you need to "campaign" to pass a board, and it's tough to reverse a board once they've turned you down.

However, you are where you are. Kylewest is right; it's time to hire a real estate attorney.

ali r.
DG Neary Realty

All good points by the above posters. You need to get your hands on the building's bylaws. As others have correctly mentioned, neither you nor your family have automatic occupancy rights to the co-op apartment--the only right you have, if the board does not approve you (or your mother, or whomever) to become a shareholder occupant is to sell your uncle's shares.

As Kyle notes above, you may sell to whomever you like, provided the board approves that person as a shareholder (which means the buyer must qualify not only financially but must also pass a board interview).

Yes, co-ops are frustrating in this sense. But co-ops are self-governed corporations. They make their own bylaws and you will be hard-pressed to convince a judge to rule in your favor unless you can somehow prove discrimination, which is nearly impossible to do in a case like this. There are myriad possible reasons your mother was rejected. The most obvious one is that she does not stack up financially--most boards want to see a debt-to-income ratio no higher than 25%. If your mother does not qualify on that level, it's a pretty cut-and-dried situation.

One last thought--why would your mother want to live in a co-op that is not interested in having her as a tenant? Why not sell the apartment and put the money to work elsewhere--perhaps a nice apartment in a different building?

By the way, I'm gleaning from your post that your mother was not granted an interview with the board. If that is the case, it is likely she was indeed rejected for financial reasons. Of course, if your uncle was a 'difficult' or unliked shareholder tenant, that could be another reason--they may just not be interested in the family continuing to have a presence in the building.

Whatever the situation, the board may reject any applicant for any reason and is not required to give a cause.

i enjoy this board. alot of good advice, interesting convos, paging SunnyH,...but MOG people, sit back, put your Bb and MaxiPad and Netflix away for 5 mins and think quietly - should i get engaged with a lawyer who understands co-ops and RE law much better than i do - because maybe your expertise is crunching #s or dissecting 1s and zeros. This is an incredibly complex issue that while you'll get good advice from the board, and once again Kyle on it, engaging a lawyer is what you should have done from jump 1.

where is nycmatt to pump the wonderfulness of coops? Great asset you don't really own, there.

"(I suspect the neighbor, who wants to expand her unit, is on the board; she certainly has her fingers in this and has asked if the unit is for sale.)"

Make her pay, otherwise, just sell it on the open market and then buy a condo.

You need a lawyer, although I'm afraid your options are limited. No doubt, it's a frustrating and maddening experience to deal with a coop board.

This might be a good time to step away from the situation a bit and contemplate whether it will make Mom happier to live where she's welcomed. That may be the ultimate "win".

I would not be surprised in the least if the neighbor who's on the board is blocking the sale. I've seen it happen before, and not just in ritzy 5th Avenue buildings. (My father was president of a coop board for many years and I heard a million amazing stories illustrating the worst in human nature.) Sadly, if that's true, there's not much you can do about it, legally or otherwise.

If it were me and I thought it was the neighbor, I'd never sell it to her. I know, squeezing lots of money out of her might appeal to some of you, but crossing her completely is an attractive idea to me. Chacun a son gout.

>2. Guests are usually permitted only when the owner is present. The owner, not his corpse.

Isn't she the owner?

Is your mother intending to occupy the unit full-time? Pied-a-terres are often frowned upon by co-op boards as well. A friend of mine from out of state was forced to sell her father's unit, which she wanted to keep as a pied-a-terre.

Living in a small co-op, I really do understand these restrictions. It's a shame when they're applied unfairly, though.

The uncle's estate is still the owner.

unfortunately muso, the rules are the rules in a coop. that you didnt cite an understanding of the rules and qualifications required for owners, and that your mother qualified, speaks that you potentially didnt prepare your mother's board app package as best as could be.

what are finance reqs for this building? are your mother's sufficient to pass muster? are pied a terre's allowed? was she presented as a liely pied a terre owner? is it a no pets building? does she have a pet?

unless you have good knowledge of the whole NYC Coop process (based on your post, it seems you don't)you should have consulted a knowledgeable NYC RE lawyer with familiarity with coops, prior to filing the app for your mopther.

also, find out if the neighbor is in fact on the board. play hardball with that person re a sale. your turn. yours is the only apt that can be combined with theirs. it has very special value to them. make them pay accordingly.

>>Guests are usually permitted only when the owner is present. The owner, not his corpse.

Isn't she the owner?<<

No. She is not a board-approved tenant shareholder. The tenant shareholder is deceased. A deceased person cannot have 'guests'.

The estate is appears to be the owner. Some perspective: what is the size of your mom's assets,income, liquid worth, etc. Agree with poster above that the board can reject if this will not be your mom's primary residence. I would not assume there is bad faith here on the part of the board or the neighbor. Have the executor sell the apartment and the net proceeds distributed to your mom, if that is the agreement as to how to partition the estate. Sure, consult a lawyer if you want, but your mom's financial position, her income and her intention as to living in the apartment are all relevant factors for the board to consider.

Yes, pretty much what everyone else said.

You're out of luck. The board has rendered its decision. Move on.