A Failed Search: A Coop Pied a Terre in Brooklyn
What seemed like a good idea – a two bedroom coop in Brooklyn that would be a weekend place for the next five years, a year round residence thereafter, is now but a failed exercise that has left us $1000 poorer, but a good deal wiser. Two years of open houses, multiple failed bids (10%…
What seemed like a good idea – a two bedroom coop in Brooklyn that would be a weekend place for the next five years, a year round residence thereafter, is now but a failed exercise that has left us $1000 poorer, but a good deal wiser. Two years of open houses, multiple failed bids (10% off asking with an all cash offer), misinformation, and miscommunication ended suddenly when our successful bid made directly to the owner was left unconsummated. The coop board, who accepted pied a terres on a case by case basis, felt this would not be a case. When I asked the board president, what was it about our case that was troubling, the answer was nothing. We have never accepted a pied a terre, and you were not going to be the first. When I asked if they had been misleading, the answer was no – we review all such requests, and reject all of them. Fortunately, our denial was based on an introductory letter that we had written. This spared us the $1350 in fees, as well as an exacting and total examination of our finances in which our privacy was never guaranteed. Top all that off with a management company whose customer service style would have been more appropriate to selling soup in Manhattan. Ultimately, we learned a lot. Coops are bizarre and arcane real estate instruments that we want nothing to do with. We had received all pertinent documents from our attorney: board minutes that would indicate a narrow minded leadership by individuals not qualified to put together a grocery list. House rules, renovation regulations, inflated mortgages, assessments, and fees upon fees. I am so grateful that the board, in their own misguided way, set us straight and relieved us of this irrational desire to own a second home. And as much as I hate to say it, a buyers broker would have been very helpful in this matter. There is no way they would have allowed six months to be wasted in a deal that had little or no chance to be closed. A commission is to important to waste on such foolishness.
And there’s a logic to that part of it. Co-op mortgages are based on owner occupancy rates being above a certain percentage. The banks fault . . in this case compounded by general board craptitude.
“Once you own it, what can they do??”
It’s typical for coops to have bylaws or proprietary leases saying shareholders are required to use the apartment as primary residence. Busybody coop board tyrants can charge exorbitant fines and/or the shareholder can stand to lose the apartment for violating rules.
Dave, most coops don’t allow. also you don’t own real estate you own stock
Boy would I would I be happy if the same lesson only cost me $1000. Check out my earlier post…
Why would one have to indicate that it was going to be a pied a terre in the first place? Once you own it, what can they do????
Sorry for your troubles. But I’m a little confused–people have bought pied a terres in coops, so it’s not like it can’t be done (though your case sounds like it was as bad as can be.).
The downside to coops can be petty tyranny. But the upside is that you’re a lot less likely to end up with neighbors in over their heads and desperate to sell–something which can have a massive impact on your own finances.
I hope you are able to find a housing situation that suits you better, and that you find a lovely building that works for you.
Tell us which building it was if you were that unsatisfied with the whole process.
Condo boards have less control in the bylaws, but make no mistake its the same people doing the same crap.
You could go condo. Most condos don’t have such picky rules. Especially if you buy from the sponsor. If a condo board rejects a purchaser, the condo has to buy the apartment themselves, and most don’t have the resources to do so. Condos usually cost more, but have lower maintenance fees.