Coop Board Unhappy with Purchase/Sale Price?
I am trying to buy a Coop in Brooklyn and my broker has gotten feedback that the Board is unhappy at the low sale price/lack of appreciation of the unit. Supposedly, they even tried to urge the seller to stop the sale and to rent out the unit until the market recovers. Obviously, they cannot…
I am trying to buy a Coop in Brooklyn and my broker has gotten feedback that the Board is unhappy at the low sale price/lack of appreciation of the unit. Supposedly, they even tried to urge the seller to stop the sale and to rent out the unit until the market recovers. Obviously, they cannot force the seller to sub-let instead of to sell, and if they don’t approve me, I should be able to recover my deposit (and will only be out mortgage application, legal fees). There were some earlier issues that might actually have put the onus on me if the deal failed, but this news seems to have redeemed me.
Has anyone else faced this? Are there any worries I should have? Will I need any proof to ensure my deposit refund? Do I even want to buy into a building with a board like this or is this the norm for any Coop looking out for its best interests?
It reminds me of corporate news when the shareholders veto a hostile takeover bid due to a low offer price.
I suspect most coop boards are peppered with out-of-touch busy-body morons.
This board is not doing themselves any favors because this is what makes people not want to buy coops. We had similar experiences at our coop in Park Slope. The board members were nice people but too human and were completely unable to make anybody’s but their own personal agenda the number one priority in every decision they made. To the point of not enforcing a certain rule because they themselves didn’t want to follow that rule, to which renovations were done first. (The ones that most improved their own units’ values of course). Coop boards should only be able to weigh in on the asking price and ask for some reasonable amount of time the apt has to stay on the market to give it a fair shot of selling for that price. If after that a seller only gets one offer the board should not be able to tell them they can’t take that offer. Comps or no comps. Utterly ridiculous.
had this happen to me once (along with some racial bias on top). seller got the answer herself from the board president that the reason for the rejections (rejected 4 buyers) due to low selling price
I absolutely do not have the necessary temperament to deal with a co-op board. No way I’m ever buying into one.
I know that a lot of people think this is routine and that it happens all the time but I happen to think that it is really fairly unusual. Many co-op shareholders decide to sublet if prices are very weak, but for a board to block a legitimate sale because of a low price seems crazy. Even good buildings have low sales due to the condition of the unit, the exposure, horrible alterations etc etc. For most co-ops a sale in a down market is better than no sale. There is probably more to this than we know.
Shortsighted for board to hold this up. What happens in 6 months when the next seller wants to sell and gets a comparable price? Will they hold up two sales? Three? Won’t be good when prices rise and all these units go on market at same time. I think this only makes sense if there is really something wrong with the price — seller goofed on comps by, say, 20% or more.
Thanks for the feedback.
This is somewhat unrelated, but if the Board changes the By-laws or House Rules or Proprietary Lease (or any combination thereof) between the time the Sales Contract went into effect and closing, does that generally affect my ability to get out of the purchase? Does there have to be a “significant” change (which I am sure the attorneys will have to fight about)? Is the only pertinent change that could affect my standing one involving the actual Proprietary Lease?
If you are rejected by the board, they will not provide a reason. No matter the reason, you will get your deposit back. I personally would thank my lucky star to have found out about the board before my fortunes are bound to theirs. They would rather hold a fellow co-op owner hostage rather than acknowledge the reality about the current market. What does that say about them?
There are lots of loopy reasons for a coop board to reject a buyer, but this one is not entirely loopy. They have a legitimate concern about property values. If you were an owner in that building, and planning to try to sell in the next six months, you’d be very concerned about this situation. That said, if you were the current owner and wanted to get your money and get out, you wouldn’t care much about future property values in that building. It always cuts both ways on a coop board – the balance between prudence and control freak is tricky. You have to go with your gut as to whether you want to do business with these people. Because that’s what you’re doing – business.