The CO-OP Board refused to approve sale of the coop

Well, I wouldn’t take that article as the last word – it’s 11 years old! Even the real estate attorneys quoted in recent Times articles sometimes state the law wrong.

But even if a review of the current law by a knowledgable attorney (not just one looking for fees from you) said you could sue, there’s the law, and there’s practicality.

Is your client’s goal to spend years in litigation with the board, or to fix up the apartment enough to get it sold at a price the coop board will approve? The second is likely to be faster (and cheaper than attorneys fees.)

An attorney.

1:58 — WTF? I’m simply trying to save the OP from a shitload of poor advice from other posters — yours included (I’ll spare you the “fiduciary responsibility” discussion). If OP followed the advice of some of the posters, he would get his clock cleaned in court, and would potentially have to pay the co-op’s legal fees, depending on the governing documents of the co-op.

And, FYI, I have served on one co-op board in the past, also battled with a second co-op board as a shareholder, and now am a very happy condo owner. I personally would love to see co-op boards powers to be curtailed dramatically and specifically support the bill that would require co-ops to issue written reasons for rejections. But the fact of the matter is that the CURRENT law in NY is as I have stated in prior posts. I don’t like it any more than you do.

In sum, I have no agenda except to help the OP and to extend this forum post further.

That article is about setting a FLOOR, not about price-based rejections in general. And it’s setting a floor the court said was beyond the board’s powers. I also see the breach of fiduciary reponsibility claim – the seller of the apartment IS a shareholder too and the board is supposed to represent that seller’s interests too not just the rest of the building.

Emigre, you find a way to be on the side of the board every time. You clearly sit on a coop board yourself! Which is okay and it’s good to hear that perspective. But just like the OP’s client’s coop board you have an agenda. You obviously don’t want to see coop board’s powers limited in any way.

I am inserting a part of the article from the Cooperative Magazine.

How Low Can You Go?
Can The Board Set Minimum Selling Prices?
By Barbara Dershowit

In June 1992, the board of directors of a 160-unit co-op in Port Chester, New York made the same decision that countless

boards have made before and since: They rejected the proposed sale of an apartment within their property. However, in this case, shareholder Dorothy Tomaskovic Oakley took the board to court, claiming breach of contract, breach of fiduciary responsibility and intentional interference with contract.

At the center of the board’s rejection was the fact that Oakley’s proposed selling price of $37,500 was more than ten percent below the $49,000 minimum sales price the board had established for units comparable to Oakley’s. Although the board apparently set this minimum price policy in an attempt to protect the value of the property, Westchester Supreme Court Justice Donald N. Silverman ruled in May 1995 that the board’s floor-price policy is outside the scope of a board’s authority, that it represents an unreasonable restraint on the transfer of apartments, and that it is an exception to a board’s generally broad right of approval. Judge Silverman further held that the board had exceeded its authority because the property’s shareholders had neither been allowed to vote on the minimum sales price resolution, nor had been given prior notice of the board’s intention to establish such a policy.

To the OP broker: forget the legal stuff – it won’t work. The board may be stupid to reject an apartment in not-great-condition for such a reason in this market, but that is legally their right.

Instead, advise your client to make the place look better – a few cheap fix-ups (it isn’t likely so bad that a full-scale renovation is needed) – some paint where needed (white will work best), floor sanding and poly if needed, even a refresher in kitchen or bath that falls short of renovation can make a big difference (replace crummy vanity with new pedestal sink; replace worn countertop, new doors on cabinets, or paint them, new kitchen flooring material if worn, etc.)

Then move some furniture out so it looks spacious, move out all the clutter, and clean really well, and your next offers will be higher. I don’t understand why people don’t do this anyway to get the best profit – it doesn’t cost much.

Another happy-to-be-out, never-will-own-a-coop-again reader.