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!
You say the board gave your client evidence of 2 other offers on places in the building as examples of what would be an appropriate price. Why didn’t your clients place get such offers if you’ve had it on the market since august? You make no sense.
The board has the right to reject low sales and actually has a fiduciary obligation to remaining shareholders to do so. If your client might foreclose over a slow sale that’s their own fault not the boards.
It sounds to me you have a great case for lawsuit. You started selling with the right price. You had three Brokers involved. You can proof that you did everything you can to sell the place for the right price. Your place is on the market since August and it sounds like this is the best you can get as per your reasonable judgment.
I also smell self dealing…You might want to contact the Board directly before getting lawyers involved…That could solve the problem if you explain everything from your point of view and save the time and effort…Most of the Board will listen what you have to say…
Good luck!
8:46—To the best of my knowledge, although there’s been a proposal to make co-ops provide reasons for rejection, there is no law on this subject yet.
Likewise, I don’t believe that there’s any legal requirement for Board members to resign their positions if they are selling their apartments. They can’t vote on acceptance/rejection of the buyers because of the conflict of interest, but they don’t have to give up their seat. In fact, based on the operating documents, they might not even have to resign after they sell. I once lived in a co-op where board members did not have to be shareholders or building residents, just US citizens.
Yes. The Board knew from day one how much I was asking. The price started high…We had many open houses with at least three different Brokers. We had in average 5 people a week coming to view the place. We had many adds in NY times, For Sale by Owner, Daily add in NY Times Online, fliers made by the Broker and distributed through the area…Nothing happens. This is going on since August. We had another offer at the same time as the current one that was even 30K higher but the buyer was not as financially stable as the current one. We wanted to make sure the Board approves the buyer so we went even with the lower offer. I am sure the reason is price. However, neither the buyer nor the seller got anything in writing…I am speaking with an attorney…
When you bought into the coop you should have been aware of ALL the rules. That’s what real estate lawyers are for. Certainly from an outsiders viewpoint the conflict of interest situations are real. Get your lawyer deeply involved in the coop docs.
THIS IS WHY COOPS SELL FOR LESS THAN CONDOS.
Good reason why coops can get you in serious trouble.
You are in debt, have an emergency, medical bills, whatever and the coop decides to takes its slow ass, self interested time approving your buyer. No hope for a quick sale, it is a long painful process that could leave you in foreclosure and bankrupt in the long-run.
I think people do not realize that when they buy a coop they are giving up a significant right to their property. You are not buying an apartment you are buying into a corporation that leases your apartment to you with strings attached.
Of course, coops are not all bad and have some very significant benefits as well, but keep all possible pitfalls in mind when considering one.
Did the board know how much you were asking when you were trying to sell? Did anyone way anything at that time (good or bad?). The law requires that if someone is rejected by a coop they must be given something in writing. If it’s anything else besides financial reasons then this could make the board liable and open up a can of worms for lawsuts and trouble. You state that you aren’t sure if the reason is the price but that someone approached you…it does sound odd. I know w/ condos they have the right of first refusal BUT if they refuse, based on the price usually, then they have to purchase it themselves at or better than the price on the table. there has to be some sort of recourse by both you and the buyer. speak with an attorney.
Thanks a lot!!
Hi,
I would check with the lawyer about the conflict of interest. In our coop, everyone stepped down when they put their place for sale. I believe it’s because the board member needs to be working in the coop’s best interests and if they are selling, obviously, it’s a conflict of interest. Worth checking into if it’s legal.
Unfortunately, if they didn’t give anything as the reason, not sure you can do anything about this particular decision. However, if they are giving you the hint that it is about the price, that of course sucks that they would do it from your client’s perspective. From their perspective, I guess they’re trying to preserve the value of their apartments, but it’s terrible that they have that much power.
We had our buyer rejected by our board and it’s a terrible feeling, but we dealt with it and just ended up doing whatever we thought they wanted so that we can get out of there and move on with our lives. Good luck!