Condos and Co-ops boards in New York are extremely unique and elusive entities. Co-ops boards are actually one of the few, if not only, entities that can reject an applicant for any arbitrary reason including race, gender or sexuality. Although, no co-op board would probably ever cite these specific reasons for rejecting an applicant, most people are surprised to discover that the co-op boards do not have to justify a rejection of applicants at all. Additionally, there is no genuine appeal process from a co-op rejection. Applicants whom are rejected simply have no choice but to look for an apartment elsewhere. Condo boards are usually more lenient in their document requirements than co-ops but still require applicants to divulge a decent amount of personal and financial information about themselves. Many buyers, especially if they have never previously purchased an apartment in a co-op or condo simply do not understand the application process at all and may require a New York real estate attorney to help out with the difficult process.
So what exactly do co-op and condo boards look for in an applicant? Well, many applicants would be surprised to discover that the vast majority of co-op/condo rejections are based purely on application packages, before a board interview is even scheduled. Thus, the key to board approval in many instances is to ace the board application as the board would not even take the time to meet with an applicant if the chances of that applicant being approved are slim.
One of the most important aspects of the board application is an applicant’s financials. The financials submitted need to be completely up-to-date, organized, clear and accurate. If the applicant is self-employed, the applicant must obtain a CPA letter from his/her accountant that details the applicant’s annual income. If the applicant is a W-2 employee, then the applicant needs to obtain a letter of employment from his/her employer stating his/her annual salary. Two years of past tax returns are usually a basic requirement for most condos/co-ops’ board applications. The level of scrutiny will depend on the co-op/condo but sometimes the documents are difficult to comeby or confusing and require the help of a New York Landlord/tenant attorney for assistance.
Another important component of the board application process is reference letters. Applicants should only use references who know them well and would be available to answer questions on the applicant, if necessary. Many boards actually conduct cursory research on the references, often googling them to determine if the letters have some authenticity. It is helpful if an applicant already knows someone whom is already an owner in the building as that would theoretically foster an instant positive relationship with the board. References whom are homeowners in similar buildings are also looked at more fondly, especially if the references have served on co-op/condo boards. It is also usually acceptable for reference letters to be written by references that are out of state. However, if the co-op/condo is a more difficult Park Avenue or Fifth Avenue co-op/condo, the board may require the authors of reference letters to be of a particular social status. Reference letters should detail how the applicants are financially secure, professionally stable and will make friendly, cooperative neighbors. It is also important for applicants to realize that it is more beneficial to have references whom are long-established, close friends than to have generic letters from references whom barely know the applicant.
Most brokers will have sample letters of reference to provide Buyers. However, if an applicant is not working with a broker, many sample reference letters can be found online. The letters will typically include the length of time that the writer has known the applicant, how the writer met the applicant and any positive experiences that highlight the relationship between writer and applicant. Most letters also openly state that the writer recommends the applicant to the co-op/condo board. Professional, personal and business letters should be typed, grammatically correct and contain no spelling errors. They should also contain some effort on the part of the writer and be at least three paragraphs. It may be helpful for applicants to ask for more letters than required in order for the applicant to be able to select the most appealing and best ones. Although, it is rare that an applicant will be denied solely on the basis of a reference letter, positive, well-written and persuasive reference letters will help shape the board’s opinion of the applicant before and even during the interview. Reference letters should not discuss or cite to any inappropriate instances or parties, which can influence the board into thinking the applicant is noisy or would be a difficult neighbor.
After the application is submitted, the applicant can now focus on the much feared board interview. Common questions that the board may ask at the interview include: 1) Why do you want to live in this condo/co-op and/or neighborhood?, 2) Why are you buying this unit?, 3) What do you do for a living and do you like it?, 4) Are you potentially interested in serving on the board or do you plan to become involved in the condo/co-op’s community?, 5) What are your political beliefs?, 6) Are you planning on doing any renovations to the unit?, 7) Do you entertain often? 8) What do you do in your free time? and 9) Do you have any questions?
The most important thing for applicants to remember in answering these questions is for the applicants to be themselves. Board members can sense when an applicant is not being entirely truthful and may not fit into the co-op/condo’s culture. It is important for applicants to give truthful but diplomatic answers, nothing too scandalous or controversial. Boards do not want to hear that Buyers are purchasing an apartment in the building simply because it is affordable, they want to hear that the applicants truly have a connection to the apartment and the building and will make long lasting good neighbors. Any questions having to do with the applicant’s job or profession are simply being asked so that the board can gauge the applicant’s job and financial security. Boards also want applicants who will be interested in eventually serving on it and being an active member of the co-op/condo. Some board applications even ask applicants if they have any background, skills or expertise that may be useful to the board. However, applicants should not come across as too strong and convey that they may want a particular position on the board at the interview. Regarding renovations, it is important for potential buyers to fully disclose their plans for any renovations before the board application process even begins. Many co-op/condo boards require that unit owners obtain their approval before beginning any renovation. If applicants plan to conduct any renovation on an unit, they should first speak to their broker and attorney so that both can respectfully research whether the planned renovation(s) would be allowed in the co-op/condo before applicants spend money applying for board approval. As for political questions, if a board asks them, it is best for applicants to remain neutral and state that a particular political matter is very important but that they are still considering all of the facts and different opinions on the matter. Regarding any entertaining questions, boards often ask this to determine if an applicant will be noisy and allow many guests access to the co-op/condo. An ideal answer would be for the applicant to state that they have occasional dinners or get-togethers with close friends. As for additional questions, unless the applicant has pressing ones that they feel the answers to cannot be readily attained elsewhere, the applicants should not ask any questions as the board wants applicants whom are not wasting their time and already know that they want to live there. It is best to state that there are no questions at this moment but that the applicant will reach out to the board should any occur in the future. A board interview is not a job interview and the board just wants applicants who will be amenable neighbors, not necessarily the most appealing, charismatic and chatty applicants. An applicant should also never directly ask if the board has made a decision during the interview. Most boards need to discuss the applicant amongst themselves after the interview and do not want to be put on the spot by an applicant at the interview.
Ultimately, co-op/condo board approval can be extremely difficult for applicants to understand. It is most important for applicants to simply be themselves, be honest and be cooperative throughout the process. It may be scary and strange for first time buyers to have to provide co-op and condo boards with so much personal and confidential information but when viewed in the alternative, it can also be comforting for co-op/condo owners to know that their boards have such lengthy and detailed screening processes. When buying an apartment in a co-op/condo, unlike buying a house, the Buyer needs to realize that they are actually, in a way, purchasing shared common, noise and air space with their neighbors and that they are not necessarily purchasing islands of land. A thorough screening process is beneficial for the whole co-op/condo community as any potential issues or litigation regarding one unit in the co-op/ condo may eventually affect the other units and quality of life in the building.
If you have any further questions about a co-op/condo board please don’t hesitate to contact the New York Real Estate Attorneys at Pulvers, Pulvers, Thompson & Friedman, LLP.
Written by Maria Cheung, Esq.