Board Rejection

Other than no debts, did you have adequate savings to cover whatever cushion they wanted?

yes savings(liquidity) is huge.

Income or career variability? Job or background issues, i.e. controversial or likely to attracted unwanted attention? Problems in the past with your neighbors? Difficult behavior with building-related people or at the interview? Different ideas on what's fair for a purchase price? Different interpretation of what's available and counted as liquid savings? (Less savory - board member lives next door and wants the unit for a combination?)

Debt to income ratio? Are you counting bonuses as salary? When you say liquidity is huge, how huge is huge? I feel like some coops are getting crazier these days as far as post closing liquidity is concerned. It used to be 1-2 years and now 2 years is the bare minimum and many want much, much more.
If you post the building, you might get some more specific ideas.
Did your agent have any ideas?

liquidity is huge meaning of huge importance... correct me if I'm wrong but I think most coop boards can reject you and give no reason all? Like they just didn't like your face no?

Sorry steveF, was reading quickly and confused you and SNP, the original poster. And yes, boards don't have to give you any reason at all but usually there is some indication of what went wrong.

We have an indication and the indication points to discrimination. Debt to income ratio is under 20%. Plenty of liquidity (at least 3 years), this would have been the most A unit sold for in the building thus far, and our agent also thinks it's discrimination based. Scared to file suit because we don't want to be. Locked out of all coops going forward. Coop is in queens. Didn't even get to interview. Flat out rejection based off of paper application.

did you interview? It's telling whether the rejection came before or after the interview ... because if it came after, then what they asked you is a clue.

That is VERY upsetting.

However, I don't think you would sue -- it's the seller who would. And I do agree that's a monumental step. There might be other ones to take first.

If I were in your shoes I'd first call 311 and ask to speak to someone about Fair Housing. If you're in a protected class, you may be protected on the Federal level, but you're also protected on the city level, and NYC takes this stuff pretty seriously.

And I'd speak to the seller's broker, gently, to try to get a sense of where the turndown came from.

Then maybe the attorneys can have a powwow and talk about resubmitting the app, or talk about what the seller could do to pressure the board.

ali r.
{downtown broker}

Sorry, new commenter so it takes awhile to post. Don't think this one posted yet so I'll try to submit again (apologies if it comes through twice)

Never got to the interview. It's a FSBO so the seller gave us an indication that points to discrimination. Debt to income ratio is under 20%. Plenty of liquidity (at least 3 years worth) and this unit would have been the most a unit sold for in this building to date (the sellers did a lot of reno themselves so it was worth the price). Our agent also thinks its discrimination (as do our lawyer/banker). Scared to file suit because we don't want to locked out of all coops going forward. Coop is in queens.

Sorry if that is the case. :( Your lawyer should be able to draft a carefully worded letter seeking a specific explanation before you actually have to think about filing suit.

Instead of suing you could file a discrimination complaint with any number of agencies and wait to see the outcome. If they in fact get cited for discrimination then it makes your case easier. OTOH if you just sue and win what will you be awarded? The right to but in a Coop with a bunch of people who you wouldn't want to live with?

What kind of discrimination?

This sounds awful. Are you sure that your agent isn't just claiming discrimination because he/she didn't do their job of pre-screening appropriately.`In most cases an agent should be able to steer you closely to the board requirements.

Thanks for the post

The word that jumped out at me was "young." Sometimes boards of long-time, middle class residents are wary of youngsters with a lot of cash moving in and taking over.

Here's all my speculation, as a buyer, seller, and former board member:

(1) Do you have any questionable funds, e.g., do you have significantly more in assets than your income and working years would indicate? When we sold, our board had a very negative reaction to trust fund babies who bid on our apartment -- young, employed, buying the apartment in their own name with their own money, but with significant assets (probably more than anyone in the building). We got the deal through, but it was not easy, and I know through gossip that it was very close to rejection.

(2) Is there any other way that your application is atypical -- e.g., even if not trust fund babies, are you putting 75% down and financing 25% off a relatively low income relative to the purchase price of the apartment? We ran into that bias, too. Board members tend to prefer "normal" applications with income and assets proportionate to the apartment; anything disproportionate (low OR high) tends to be scrutinized in my experience.

(3) Are you U.S. citizens? Boards can be wary of foreign nationals, especially if combined with financing, because it's a much bigger risk in the event of non-payment. We had an offer from a foreign national we immediately dismissed because of the level of risk.

(4) Final thought -- how long have you been married? When my partner and I bought our co-op, we had been together five years, lived together for three. We got a question in the board interview about what we intended to do with the apartment if we split up. (No idea if this was legal.) We answered that we had no intention to split up, but in the event we did, either of us could carry the apartment solo for a minimum of 2-3 years while we evaluated options. In reality, at the time neither of us would have met the strict standard of being able to afford the apartment on our own, but we each had enough liquid savings + incomes to make ends meet, if a bit uncomfortably. We also each had credit scores ranging from 780 - 810 with no negative history. If you've been married a short time, and one of you has a weaker financial profile, that could be an issue.

Anyway, I am sorry you are experiencing this. It may well be discrimination; just throwing out ideas of other potential causes.

So, we are minorities. We are in our early 30s and have been married for 2.5 years. Typical financing - 20% down with 80% financing. Both US Citizens (both of us were born in the States). Both Credit Scores are 790+. Definitely not trust fund babies, both of us have worked and we paid off a large student loan before even beginning to start looking at purchasing a place so that when we did we'd be debt free.

Our agent pre-screened all our documents before sending them in, and we sent in a complete package.

@lad, regarding (3) - that would be clearly illegal.

http://www.nyc.gov/html/fhnyc/html/protection/citizenship-status.shtml

This may sound a bit silly, but have you GOOGLED yourselves? Boards definitely are doing it.

Keith Burkhardt
The Burkhardt Group

Everyone's knee jerks in a different direction, because the word that jumped out at me was "FSBO." No seller's agent, selling shareholder is communicating directly with the management company, only one set of eyes on the package ... it might well be discrimination, which is why I advised OP to call 311, but then again, it might be a screw-up somewhere else that no one sees or wants to acknowledge.

The fact that the apartment is renovated to the nines lends credence to the "a board member wants this apartment" narrative too -- but without seeing the application it's tough to say.

"a board member wants this apartment" works towards self dealing but against discrimination.

Board member decided he wanted it after it went into contract? Maybe but I think doubtful. I just had this happen after we submitted a cash offer above ask(Park Ave). Insider knocked on sellers door and made a deal is what I was told. It happens...

To provide a few more details: Seller is on the board so they knew what was needed in the board package. We submitted a complete board package and were told (by sellers) it might be better to provide a little less information next time (we provided everything asked for and nothing more, nothing less) and also directly implied that we should leave some details about ourselves off the application.

SNP:

1. you lack standing to sue the Coop
2. only the seller-shareholder can

3. and that is unlikely because most sellers will just
want to move on

Well, if the seller told you that you had too much information in the board package and you should have left some of it out, you know what happened.

It's unclear to me, though, why package wasn't edited, or at least re-roadmapped, AFTER seller review and PRIOR to board submission. Did your team hear the seller comments and decide to ignore them?

The way you've laid this story out, that's not necessarily discrimination though.

It could be somehow you have a background of jobhopping, and that showed up in the application, and there wasn't a countervailing weight in your reference letters to indicate that your current job wants you to stay forever. It could be that you truthfully answered "yes" to a question about whether you are involved in litigation, and then didn't have materials in the package -- or didn't have the package signposted to where the board could find them -- to indicate how aberrant that was and that you were actually the kind of people who would never ever ever sue their own co-op.

That's just two examples off the top of my head -- you know what the actual red flag was.

Your team has to fix this, though, or you're headed for the same result at the next co-op.

ali

Can you or seller contact the managing agent since they go through the package before handing over to board. Maybe he/she can provide a hint especially to the seller who still lives there.

The seller told us this reason after the board already denied us so we had no opportunity to redo the application at that point, and I had a letter from my job (as asked for) telling them that I'm employed here. Not involved in any litigation issues. Issue is hinted to be that I work for a foreign government who may not necessarily have good relations with the demographic population in this area of Queens, which is discrimination.

Although the details are limited, if accurate that appears to be illegal discrimination based on lawful occupation or lawful source of income, and perhaps one or two other NYC-protected categories.

http://www.nyc.gov/html/fhnyc/html/protection/protects-you.shtml

I think the takeaways are:

- Report this and perhaps get some advice from the NYC fair housing folks.

- Sounds like you are disinclined to sue (and some commenters didn't feel you had standing, although you can always file anyway and the standing question may have different answers based on what law your complaint would reference -- federal discrimination, state/city discrimination, or contract law).

- You have a wide range of speculation above on the types of things that worry coop boards, which might help you present yourself in an especially favorable light on a subsequent application.

- I'm so sorry this happened to you; buying an apartment is already complicated enough without facing issues like this, and you shouldn't have to worry about it.

seller has no idea why u were rejected. If seller is on the board they would be excluded from these proceedings. No board member would be stupid enough to give you any reason as that would be of no benefit to the coop. Coop's can reject you for any reason and not ever utter that reason. Most coops collect flip tax so they want apartments sold. Forget the discrimination law suit, it will only prevent u from ever purchasing a coop.
Move on...things happen

One of the reasons boards generally reject applicants before an interview is to avoid any suggestion of discrimination, especially based on race. I'm unclear as to how your 'minority' status would have come into play in your initial board application. Unless something was mentioned directly in the application it would be very difficult for you to prove a case of discrimination based on your minority status since the application didn't make it to the interview stage.

NCSCtoNY, Sorry to hear about your board rejection. I think you nailed the potential issue. I am assuming you do not have diplomatic immunity assuming you are US citizen.
"Issue is hinted to be that I work for a foreign government who may not necessarily have good relations with the demographic population in this area of Queens, which is discrimination."

I am guessing that you are better off not living in the coop if they think in the manner you are describing. Can we assume that you have ties to that foreign country in some manner via religion?

Clearly illegal.

I think that's worth talking to the city about since you do seem to be a member of a protected class (employment).

However, if the fact that you worked for Unpopular-stan was declared upfront (as it probably was, because for instance, they probably issued your employer letter) that's a weakness that your team should have seen, and it should be defended against in the package (it may have been... I haven't seen the application).

If you do decide to move on, one letter probably worth getting is a recommendation from one of your college professors (assuming you were educated in the U.S.) or someone else in your field (assuming you were educated overseas) talking about how skilled you are and how much of a catch you'd be to any employer. You want to move the focus away from your particularly unpopular employer and towards the fact that you'll always be employable.

I just did something similar for a London-to-New York relo. I thought she was in a fairly innocuous and safe-sounding job, but you still want to have the patch against the possibility that the board sees it differently.

The next time someone brings up why you don't need a Seller's Broker this would be a good counter example.

Why do you work for an unpopular foreign government? Why are you looking to infiltrate a neighborhood, and this co-op in particular, to which your foreign government employer may be hostile? Are there other motivations at play here? Your purchase price down payment, is it entirely paid for by your earnings (including bonuses?) from this foreign government?

Give me a break. Queens County is probably the most diverse county in the whole United States. You can't live in this building - find another, there are a lot, maybe even some receptive to your hostile foreign government.

Getting rejected does sting, but it is better to move on and not dwell on it. I am sure there are many other buildings out there who would appreciate someone with a good financial record.

If you got a board turn-down without having an interview the two likely scenarios are 1) someone in the building wanted the apartment and had enough clout to have the board turn you down or 2) something in the package itself was unsettling to the board. Another possibility is you have a relative who is not liked by someone on the board. That may seem farfetched, but I did have that happen once. The board was very clear and honest about why they didn't give an interview. Unless a building is solely comprised of seniors it's unlikely a 30-something married couple would be turned down because of age. And if the board only saw the package, unless your names reveal something about your race or culture how would they know enough to discriminate? Even after the fact, try to find out who did get the apartment.
Have your salesperson contact the selling agent. It's better to know the real reason then speculate.
Marji Wollin, broker, avery new york

What are the agencies to contact in ny city if discrimination a clear possible reason for rejection?

Anna, dial 311 and tell them that you have a Fair Housing complaint, and they should get you to HPD, the city's department of Housing Preservation and Development. That's the agency you want to talk to.
ali r.
{upstairs realty}

I was a seller at a coop that recently rejected a buyer which we thought could be discriminatory. I was also on friendly terms with the board and requested more info for a possible resubmission but was turned down. Unfortunately, this is the end of it. This rejection cost us approximately 15k on a downward market, but we were smart enough to sell it quickly to the next buyer.

There's not a lot you can do. I suggest you move on. You can sue, but the damage should be at minimum 50k+ before it'll be worth your time, and it'll be easier for the seller. For the buyer, you can sue, but it'll have a higher chance of being summarily dismissed.

What you might do, as someone suggested, was to file a complaint with the civil rights commission. This will make the coop's life hellish for sure at least for a time, and doesn't show up on your records of "litigation". I considered this, but decided that it wasn't worth my time to sit through depositions/interviews with a civil rights commission administrator. Also, I have a suspicion that the record was cleared out (in the sense that a more kosher reason was used in writing in case a discovery process was started).

Anyway, just my experience.

Have read about boards rejecting because applicant parents are from foreign countries, because it means there is more chance those unvetted parents become extra residents.

Coop attorneys continue to tell boards they can do WTF they want. Things will get worse until there is at least one major decision which goes against.

Why do not people post the building address and Board member’s names if they get unreasonably rejected.

Why not just avoid cooperative ownership of real estate? If you like with racial, religious, and any other discrimination, buy a coop. I'm not.

Coop’s are cheaper and in many areas majority of the supply available.

^ This -

I wonder how many co-ops rejected purchases by employees of WeWork because somebody smart on the review committee said "their employer has an unsustainable business model, their stock options cannot be accurately valued and aren't liquid, and the purchaser will be out of a job in 24 months".

George, many minorities didn't know racism is the bare bone of American culture until they became the victim, which is often too late.

Anton, your non-sequiturs get better and better each time you post. Keep up the good work!

I had to look up what that means but very appropriate.

All comments are welcome of course.

For coop owners, the ability to reject people you don't like for any reason is seen as a feature, not a big. So why is it so hard to sell apartments in bldgs that are "all cash, all white, all Christian"? Shouldn't they trade at a huge premium to condos that any ethnic with a 680 FICO can buy into?

George,
I think this flip is being seen right now on the Upper East Side. Plenty of buildings which used to sell at premiums for being "exclusive" are now being hammered. Or maybe it's just the ones who screwed up and have Jewish moose hanging in them (let's see if MCR gets that one).

Of course, lots of condos seem to be trying as hard as they can to be as Coop-like as possible based on self interested advice from their attorneys and managing agents.

@30yrs - If you are referring to Mezuzahs, I wonder if it’s not the opposite in that I would not be surprised if coops that are hurting the most are the ones who still have not opened their doors to Jews. That is the way it’s going with the old clubs where I’m from; the places are falling down and going bankrupt because the members are desperate to keep “the culture” undisturbed. They don’t realize that even if they were to open the doors, nobody would want to join, except for the fact that many are sitting on prime real estate. Can’t wait until they all go bankrupt and the prime real estate is liberated. Same with any coops of that ilk, though I am happy to say that I am not aware of any.

https://youtu.be/xmnLRVWgnXU

Brilliant. I get it now, and I see that we are in agreement.

And now that I think about it, I suspect River House only opens its doors to the German Jews who came over before 1849, but I don’t know for sure. I recently informed someone who spends the bulk of their time on Jupiter Island that the Guggenheims who live down there were Jewish back in the day.

Interestingly, the stuffiest, most restrictive coop I know of in Greenwich Village has been doing more sales than I ever remember at very high prices.

Not much supply in the Greenwich Village. Which one are you talking about and what are down payment and liquidity requirements?

The stuffiest, most restrictive coop I know (ie one with apartments under $10m) is the River House, where it seems they can't even give 'em away.

Still seem pretty expensive to me. Apartment which is not in move in condition should be 800-1200 depending on the view and work needed. Move in condition $1100-1700 depending on floor/view and Reno.

Re vibrancy of stuffy Greenwich village coop, I wonder if this is the result of consolidation. While the old money cannot sustain the number of stuffy coops and clubs it used to, it will still be able to a sustain a choice few for some time to come in certain cities, New York being one of them. I bet against River House being one of those that remains standing once the shakeup is complete, but time will tell. As George points out, River House sellers cannot give their apartments away. Those few who have the money and can get approved by the board’s historic standards do not appear to be choosing that building, perhaps choosing 30yrs Greenwich village building instead.

River House finally letting Wilbur Ross in says it all.

Is Ross the first proof that Billionaire's Row actually sucks?

Certainly probative!

30, Wilber Ross was living in a pre-war building with no services except a doorman. Not what you call a new product on Billionaire row.

Is there any tried and true way to flub a board application to get out of a contract without losing deposit?

tell them you're an avid traveler and just got back from china

The things you might say that will get you rejected can also get you sued by the seller if there are inconsistencies in your story or you've misrepresented things.

Do you have so little personal integrity that you're wiling to lie about yourself to others in order to save a few bucks over a mistake you made? Did you get to this behavior on your own, or are you blaming your parents?

I'm blaming #coronavirus and impending financial collapse.

Nothing's fair in love & war, and real-estate purchasing definitely goes in the war (perhaps "cold war") category. Let's call it "War with a little love thrown in for flavor."

Cold feet. Soldier on -

soldiering on, sir.