Retired couples

Obviously net worth and nature of assets takes on enormous importance. You would still need to have steady stream of income from pensions and investments or such extraordinary wealth that you could spend the savings for decades and not run out.

Thanks kylewest, do these buildings ever check in on the status of people's finances who lived there before retirement but remain after retirement?

We purchased our place a couple of years ago after my husband (prime income earner) had been retired for several years. the Board looked at our finances in depth (forensic accountant on board) and after converting spouse's pension to today's dollar cash flow, decided we were worthy. without the steady income of a generous pension though, it might have been a different story regardless of our other assets. we definitely got the impression that this was not a normal application and they were going to take the necessary time to be comfortable with our situation.

Thanks

We are within two years of retirement and just purchased a co op last year. We went through the normal co op process and no one ever asked about our income after retirement, not the co op or the mortgage company. I would imagine that as long as we continue to make our maintenance and mortgage payments, there would be no reason to check the status afterwards. It should be a non issue.

"do these buildings ever check in on the status of people's finances who lived there before retirement but remain after retirement?"

I'm sure they have better things to do! As long as you pay your monthly maintenance on time and you're a good neighbor, you won't get kicked out, no matter how old or retired you are.

Go for it, without worry.

Once you are a shareholder, unless you are a major ongoing disturbance to the building or miss maintenance payments, the board will never dig into your affairs (at least not in an official capacity - you may have nosy neighbors). I would imagine a majority of shareholders in my building (myself included) would have trouble purchasing in the building with today's prices, but we can comfortably afford our mortgage and maintenance.

Oh, and as others have said, the board's primary concerns are that a) you can comfortably afford mortgage and maintenance, and b) you are likely to be a good neighbor. You will be required to demonstrate sufficient assets and/or source of stable income. As a retiree, this could be in the form of a defined pension, guaranteed annuity, business investment, real property income, etc.

Interesting, so any boards had to deal with an older couple or older individual who was in good standing for years but just wasn't able anymore?

As OTNYC said, the board doesn't need to deal with anything unless/until the shareholder is in arrears on maintenance. The co-op forces a sale, recovers the arrears and all the legal fees, and hands what's left to the lender and the departed shareholder.

The more usual course for people who can no longer swing it is to sell and move somewhere less expensive.

Eumenides: board member here. I agree with the prior posters. Think of the board approval process as similar to a mortgage underwriting. Once the decision is made, it is not reexamined. If the shareholder fails to pay maintenance, the board has a fiduciary obligation to pursue legal remedies. Per proprietary lease, the building's legal fees are collectible against the defaulting shareholder. We have had a couple of "slow" payers (some not older tenants by the way). We call our attorney and bill the lawyers fees to the tenant. There are few board initiated ejectment actions in prime Manhattan co-ops due to failure to pay maintenance. I have said it here before and will say it again: I am not seeing distressed sellers or people under financial pressure in prime Manhattan properties. (I am sure some are out there but it is not the norm.) I am seeing a number of mortgage refi packages now (which the board needs to approve each time a refi takes place.) And even the pensioners refi'ing their mortgages are in a comfortable position. The refi's are the only time that the board takes a second look at a tenant's financial condition.

Thanks, oldgreyhair. Much better put. I'd forgotten about the re-fi as a chance to keep tabs on financials. In my own co-op, the board requires financials only when the debt's increasing. Otherwise, for a straight re-fi, the president just signs the Aztec or whichever other paperwork.

As an aside, it's interesting how some people never refinance, while others are at it every time they can save a point.

Hi NWT: I am prez of our board and need to sign the recognition agreement. But our managing agent sends the refi packages to all the board members (includes financials/income of the shareholder). I sign after majority email vote. I personally approve ALL refi's regardless of the financial information (net worth and income) if the (i) principal amount is not increasing OR (ii) the monthly payment is not increasing.... Ratiionale is if the shareholder is current on maintenance,, I don't care about debt to asset ratios or coverage ratios, the debt burden is not increasing and/or the monthly nut is decreasing, so all is good for me. Take care.

(i) principal amount is not increasing

oldgreyhair, what if the debt to income level went to the roof but the increase in debt is coming from a different type of debt, not from the mtg on that apartment? i'm surprise you disregard that, guess it's such an uncommon event, you didn't include it.

nursing home

Notasmin: Remember this is a refi of a shareholder in good standing. If your scenario happens (I have never seen it in reality) and it should be taken into consideration as you suggest, what would expect the board to do: (1) reject the refi which is LESSENING the financial strain, or (2) somehow declare the otherwise current paying shareholder to be unqualified to live in the building and proceed with some sort of eviction action? So, really goes back to my point, the financials (like a mortgage underwriting) are looked at only once by a board. And I ALWAYS approve a refi if the refi is helping the shareholders finanial situation. Hope this helps. Happy to answer any followup questions.

Well caonima even though you may be trying to be rude, that can factor into the decision for years beyond.