Co-op Transparency: What Do You Think?
We’re going to be on the Brian Lehrer show on WNYC tomorrow at 10:20 a.m. to discuss the recent proposal by City Council to require co-op boards to give a written explanation within five days to people they reject. We thought it would be interesting to see what readers think of the proposal, so please…
We’re going to be on the Brian Lehrer show on WNYC tomorrow at 10:20 a.m. to discuss the recent proposal by City Council to require co-op boards to give a written explanation within five days to people they reject. We thought it would be interesting to see what readers think of the proposal, so please take a minute to answer the three-question co-op survey and then listen in tomorrow. There’s a field on the survey for your comments. Thanks!
Check out the results here
When Co-Ops Say “No”, They May Have to Say Why [Gothamist]
Pushing Co-ops to Explain Why You Can’t Buy [NY Times]
Disclosing the reasons is just a matter of fairness.
There would be no right under the bill to sue co-ops because you don’t like the reasons.
If a co-op made up a reason to try to get around the proposed requirement, then the person rejected would be able to assess whether the reason seems to be a cover-up.
Since co-ops under existing law have to provide a reason at a trial of a fair housing claim, the real question is why the industry is so desperate not to put cards on the table in the first place:
The industry likes the fact that secrecy allows coop attorneys to make up reasons long after the fact.
The industry likes the fact that secrecy deters people from asserting their civil rihgts.
The industry likes the idea of not being accountable to anyone.
Co-op’s need Boards and this screening power. If you don’t like it don’t live or apply to live in one. Get real…
I would bet that most of the detractors do not live in a co-op, cant afford a co-op or are just bitter for being rejected by a co-op because they could not meet the buildings/developments standards or financial requirements.
Get over it and move elsewhere then….
Assuming it is true that condos trade higher, there are good reasons for that. In a coop, you pay maintenacne that includes the underlying mortgage and property taxes. In a condo, there are common charges, but those are, or ought to be, much lower sicne there is no underlying mortgage and you pay your own taxes. Also, if co-ops trade lower, it is simply relative, you buy lower and sell lower, what’s the big deal?
There are lots of 4,6 and 8 unit co-ops in Brooklyn that are self-managed because it is not worth it to each shareholder to pay a large sahre fo teh cost of a managing agent or company. I would never want to be in such a small condo, because I would worry about who woudl take real responsibility for teh building. As co-op shareholders, everyone is on the hook for teh whole building. Therefore, in a Brownstone co-op, I want the ability to make sure whoever else is going to become a co-owner of the building with me is someone who has good judgment and will pitch in and be responsible, and has the resources not just to pay the mortgage and the maintenance, but to write a quick check if need be to help pay for a new boiler or something like that. So while there may be all kinds of discrimination at the big fancy CPW and Park Ave co-ops, small brownstone co-ops need the discretion the law affords them, and that discretion is threatened by having to publicly state a reason for rejection.
the problem, anon 8:18 is that for the most part you can’t tell if someone is a “misanthropic psycho neighbor or partner” by their financials and an interview. I read the linked times article and another article written about the same subject in 1986 and these people have great creditials and financials and were still rejected. no one is getting upset because the board rejected a serial killer candidate but the truth of the matter is ted bundy himself was educated and charming by description so what exactly do you have to stand on? can you really convince yourself that you can tell if someone will be a bad neighbor by their interview. more so, a lot of these boards are rejecting people before they even interview. I guess they heard through their golfing buddy that this person would be a “misanthropic psycho neighbor or partner” – thats ridiculous. I agree with the person above who pointed out that condos are doing just fine without this type of nonsense.
One of the benefits of living in a coop is that you know who your neighbors are. Sublet policies ensure that you won’t be living in a transient building with renters moving in and out all the time. Owners take better care of their property then renters do. There is a place for coops in NY. However, coop boards should be required to put in writing why they are rejecting an applicant. The problem here is that they probably will say that they had concerns about the financials about the applicant 9 times out of 10 and not say the real reason. I can’t see them saying “you were rejected because we felt you would be difficult” which is the reason why some boards will reject you.
Unfortunately, co-ops cannot simply become condos because of the financial structures of each type of ownership. In a co-op, there’s an underlying mortgage on the building. In a condo, there is no underlying mortgage, which is why owners of condos get deeds and pay their own property taxes. The distinction is important, especially to the IRS.
The market has already passed judgement on the coop idea: Condos trade at a 20% premium to coops. So for those coop owners who think their regulations protect them from financial ruin? It’s a classic self-fulfilling prophecy. And the more condos that get built in NYC, the worse the trade ratio will become. Coops were a good idea on paper, but in practical application they suck.
The market has already passed judgement on the coop idea: Condos trade at a 20% premium to coops. So for those coop owners who think their regulations protect them from financial ruin? It’s a classic self-fulfilling prophecy. And the more condos that get built in NYC, the worse the trade ratio will become. Coops were a good idea on paper, but in practical application they suck.
“Board approval is relevant because you’re all shareholders with shared responsibility for the finances and upkeep of your property”
But that avoids the issue – why have shareholders in a corporate body at all? Why not have it be a condo in the first place?