The CO-OP Board refused to approve sale of the coop
The CO-OP Board refused to approve sale of the coop on the ground that they think the price is low. At least one, possibly two Board Members are selling their units at the same time. The Board is not happy with the Sales Price since they believe that this could lower the price of their…
The CO-OP Board refused to approve sale of the coop on the ground that they think the price is low. At least one, possibly two Board Members are selling their units at the same time. The Board is not happy with the Sales Price since they believe that this could lower the price of their respective units and some currently on the market.
I understand that the Board is insulated against shareholders second-guessing its actions, but I believe in this real estate market and mortgage crisis the Board has to be very reasonable on sale prices.
What if my client goes foreclosure? What if they get forced to sell even for much less then the current reasonable offer? Who will be responsible?
Thanks!
Too many coop board members hide behind discrimination.
They assume if you sell the coop at a lesser price you are bringing in a less desirable person.
That alone makes it discriminatory behavior on the boards part
If you pay less money it doesn’t make you less of a person.
The market is soft and the boards behaviour is discriminatory plain and simple.
God loves everybody including the boards discriminating asses!
Get a consultation with a lawyer. At the least the lawyer if he thinks there could be a case, would write a letter to the coop board’s attorney (coop buildings have attorneys) describing what happened and saying the sellers may take legal action. It might be all that has to be done if the coop board attorney tells the board “knock it off and approve this sale”. It’s very possible the coop attorney had no idea this happened and that he has a rogue coop board pulling stupid stuff.
1:51 is exactly right. It is more common for a coop board to choose the lower offer with solid financials.
Emigre — why does the board have a duty to maximize sale price per share? The board’s duty is set forth in the by-laws, and usually it is to protect the operations and financial health of the coop — which would come before maximizing the exit price for a shareholder. thus, it would be eminently reasonable to reject a higher offer with shaky financials for a lower offer with solid financials.
“A conflict would only arise if a board member was directly interested in the approval of the sale or non-sale of an apartment (i.e. if they were a seller, buyer, bidder, or broker of the apartment).”
Emigre, that’s exactly what the OP said, that members of the coop board ARE about to sell their apartments. If members of the coop board are planning on selling their apartments soon and they want to make sure their apartments (which are in different locations in the building, in different condition, and all sorts of factors that make this apartment’s price different from theirs) get a higher price than this and it can be proven that is the reason the OP client’s buyer was rejected, no other reason, then yes this coop board could be sued for conflict of interest.
If they can’t be sued for THAT, jeezus, literally nobody should ever buy a coop apartment ever again. There has to be something that protects the shareholders who want to sell. This would make it seem the coop board is all-powerful and the rights of rest of the shareholders mean nothing. How terrifying is that?
Anyone telling your client to sue has no idea what they’re talking about.
I doubt there is a legal conflict of interest here. Maybe the board members are irrational, unrealistic, misguided, etc., but they still have a duty to maximize sales price per share. The fact that they have an apartment of their own for sale is actually aligned with that duty. Right or wrong, the board has discretion to determine what they think is an acceptable sales price, and you can’t reliably challenge that. Its why co-ops SUCK.
A conflict would only arise if a board member was directly interested in the approval of the sale or non-sale of an apartment (i.e. if they were a seller, buyer, bidder, or broker of the apartment).
My advice: Don’t waste your client’s time claiming a conflict of interest. It will go nowhere. Instead, especially if its a small building, have your seller approach the board, explain whatever needs to be explained (i.e. foreclosure risk, condition of the apartment, etc.) to justify the sales price. Have them make a lot of noise about it. The board might be more receptive on the next offer.
coops sell at a discount to condos because of this ridiculousness
Condition of this unit is not the same as condition of the other units. That is the reason my client did not get higher offer.
“It sounds to me you have a great case for lawsuit”
What would be the damages? How is the client injured?
What loss did the owner sustain? They can still sell the apartment, the board will not allow them sell for too cheap-they are doing a favor to everyone in the building. Yes it sucks, but thems the coop breaks.