Rules for talking to a board

Hard to believe you were turned down after an interview . . . . . smacks . . . . of .......

Very strange. Aren't you supposed to look at financials and Offering Plan etc along with other due diligence before you sign the contract? Isn't it too late to be saying it is a badly managed building? You should ask your attorney these questions.

Many HDFC's are a far more difficult of a purchase than most realize. A lot of these buildings have a reverse process to market rate co-op's. In most cases when the board wants to review a buyer package prior to due diligence- there are multiple forms of risk present for the buyer, and while it's not unusual for many HDFC's to do this- I do not recommend buyers pursue the apartment for buildings that operate in this manner. As an agent- I have mostly stopped working with most HDFC's because of these types of issues. In the HDFC world, it's not entirely out of the norm for the building to no longer have the offering plan...not a huge issue, but no financials, etc- that is an issue.

You can fall in love with the apartment and/or location...but an HDFC without proper financials, etc can be a potential money pit for you. Most people want to buy an HDFC because they are cheaper...but if you don't know what's truly going on in the building- it could be more headaches than it is worth.

As to talking to the board- not sure what you are hoping to achieve...but if they don't have their act together, I doubt there is anything an outsider can say to change the situation.

Hmm. I don't do HDFCs, generally, because of nonsense like this, and I don't want to give you advice counter to that of your broker... so run this by your broker...but, if you've already been approved ... and you're just looking for more knowledge about how the building operates... might it be possible to find a current nonboard resident, perhaps a recent purchaser, and ask them what their experience has been? I have put happy clients into smaller buildings in Brooklyn that have basically been run off of checkbook registers, so, while the lack of more formal paperwork would make me hesitant... there has to be a checkbook register somewhere that reflects the building's spending, and there has to be a way to see it. What does your attorney say?

I'm just spitballing here, because I believe in always expanding the art of the possible. I would certain give serious credence to Uptown Specialist's advice, because he has a depth of experience here.

ali r.
{upstairs realty}

I have identified 4 core areas of risk for HDFC buyers where the board requires an application prior to due diligence:
o Risk #1: The board is allowing many accepted offers and require buyers to pay an application fee. There have been instances where co-ops have accepted application fees without approving buyers, just to raise money for the building.
o Risk #2: The board might approve your application, you have now paid a fee, but you can’t agree on terms with the seller. That is a huge investment in your time (and some financial investment in terms of building fees and/or your attorney costs).
o Risk #3: Since you have an accepted offer without a contract, the seller’s agent can shop your offer around, seeking a better deal for their seller.
o Risk #4: You go through the co-op approval process without having a deeper understanding of what problems exist in the building and whether it is a good fit for you since due diligence comes after board approval.

Everyone in my firm comes to me for help with HDFC's as I have worked with many of these buildings and their buyers. I have been distancing myself from working this market directly because of all the problems I have dealt with in HDFC's...not just the financial and physical conditions...but just as much about the internal politics of running the building. This is not to say all HDFC's are bad, because every building is unique...but I have experienced these issues far too frequently to invest my time going forward into the day to day issues involved with it.

Many HDFCs are like that, not just HFDC