Our Board recently changed insurance brokers and they got us a better general liability insurance policy with an A+ rated company, (our management company's insurance company was A-), including all the coverage we had and more, and a 37% reduction in premium. Our previous premium was based on group experience; our new premium is individually rated. I recommend you contact HUB International Northeast. They coordinated all of our policies so that now we have one common expiration date, and our premium no longer needs to be financed by a bank (of course that cost more too).

Does Board Talk also allow me to give the individual broker's name & phone number?

Thank you very much for the reply.

Similar topic: we have about a $14 million replacement value. The Board is discussing earthquake coverage. Our current limit is $1 million which seems too low. We have three buildings with interior steel supports & wood studs but with masonry exteriors (cement block covered with brick). What are other co-ops using as a guide for earthquake coverage: 100% of replacement value; 75%; 50%?

Thanks!

Just saw your post, i also used to be with Hub and i was very happy with them until i met Izzy Green from evergreen insurance, i was really amazed by their service and honesty, and i switched all our policies to them. they have great relationship with the underwriters and they negotiated a great deal.

You might find this artical interesting http://ezinearticles.com/?What-a-Co-Op-or-Condo-Board-Member-Should-Know-About-Insurance&id=6244340

You can also contact me @ 845-789-4433 X 102.

It depends on the amount of paperwork and time.
I would say anywhere between $500 to $1200.

It's a simple transfer of shares.

As a shareholder, you can call your corporate attorney and request a quote.

DOES FLIP TAX APPLY WHEN ONE SPOUSE BUYS OUT THE OTHER?

Check your proprietary lease. Ours (probably pretty standard during the era -- early 1980s) says that an assignment or transfer to the shareholder's spouse does not even have to be authorized by the Directors. I suspect that this means there is no flip tax due either. In addition, a flip tax would be hard to support rationally if the buying spouse had been living in the apartment for some time.

same here, spouses and same sex couples have the right to occupy the apartment without the shareholder or if the shareholder predecease them. IT is in my proprietary least right around par 14, those paragraphs deal with occupancy

Hi! HabitatReporter here, with an expert opinion from one of our co-op and condo attorneys. According to Arthur I. Weinstein, Esq.,

"Aside from the cost of your own attorney, most co-ops charge transfer fees ranging from $450-$1000 to do the paperwork necessary to transfer ownership to you. The question of the applicability of the flip tax depends entirely on the language of the flip tax that the building has adopted, and there is no answer applicable to all flip taxes. You may also be required to file New York State and New York City real property transfer tax returns. You should consult your individual attorney as to the applicability of those taxes and the methods of calculating the amounts due."

Both board members should recuse themselves from the sales application. The parent, obviously, and the family friend because a personal and longstanding relationship exists.

Regarding your pet policy...do your rules state clearly NO PETS or do they define the pets. I.e. some buildings allow cats but not dogs. If your rules clearly say no pets whatsoever, regardless of how long the cat will last, they shouldn't submit an application. By allowing the application and/or pet, you will be setting a precedent.

Thank you for the confirmation!

The board can make an exception and allow the cat if it wishes -- it's not like a court of law where it sets a legal precedent.

There may be political or policy questions, but that's different from law. If the board can provide a justifiable reason for making an exception, e.g., it's a quiet indoor pet with likely little time to live, then it can do so under the Business Judgment Rule.

The idea of setting a legal precedent does not apply within the corporate boardroom.

JB, I presume you're not proffering this as legal advice...

if the Board has a no-pet policy, then makes an exception for one "connected" individual, that opens a whole 'nuther can of worms.

And that'll set a precedent, for sure.

Althouth I would be tempted to vote for the anamial, RLM is right, if I lived in your building, and you allowed a pet, I would run right out and adopt a puppy. Also, there is the favortism issue.
You will undermind the house rules and set a precedent.

We allow pets, limited to two, and believe that it fosters a much more neighborly building. I have watched people become happier, social and friendly after adopting a pet.
VP

I'm not sure my fellow board-members read me carefully.

I did say there would be political ramifications if you made an exception.

But I reiterate: There would be NO LEGAL PRECEDENT. A corporate board is NOT a court of law. ONLY COURTS set legal precedent. A corporate board CAN make exceptions if, in its view, there are legitimate reasons for doing so.

One person here sarcastically asked if I a offering legal advice. There's no need for sarcasm, particularly over semantics. I'm repeating what attorneys have said in print. Is that legal advice? Well, it's about the law. And you could call it advice or suggestion or, as I would, reportage. Being sarcastic muddies the issue, which is only necessary to do if one can't make one's point with logic.

Anyway, we're getting off-point. A board is prefectly entitled to make an exception for -- depending on the case, and not necessarily speaking of this case in particular -- humanitarian, long-term, emergency or strategic reasons, along with a half-dozen other valid reasons any reasonably intelligent person could name.

Will there be policy repercussions? That depends, as much of politics does, on how you present it. And in the case of an elderly cat -- which, unlike a dog, doesn't bark -- I can imagine being able to make a case based on compassion. That's a component of what is called, seriously, in legal terms "good will" -- which is so tangible a component that for tax and valuation reasons, it is considered part of a corporation's worth.

And even aside from this, a corporation needs flexibility to make nimble decisions. I'm not sure if affects the corporate bottom line any more to say "euthanize your quiet cat" than to say "we're making an exception on compassionate grounds." (Of course, if you have a howling cat, thereby interfering with neighbors' "quiet enjoyment" of their domicile, then you certainly have a hard decision to make on quality-of-life grounds.)

No good corporation lasts with rigid inflexibility. That's been the downfall of many a company.

While I agree with you in principal I must say that my years of experience in this industry would lead me to not make an exception. I have been a victim/sacraficial lamb many times over for using what I call common sence. Unfortunately the saying no good deed goes unpunished is all too common in this industry. I respect your compassion here but sad to say the world we live in has changed for the worst.

MRM

If it's a policy, there is no precedent.
If it's in the bylaws or property lease, there is one.

One must ask himself what is intended with a "no pet policy": noise, odors, hygiene ...
And what does pet include: dog, cat, a golden fish or bird.

You can't reject an application because of a pet. You have no way of defending this decision in front of a judge ... should the applicant go that far.

SaL states that an applications cannot be denied because of a pet! The Corp policy states No Pets, so if the applicant has a pet of any age/condition and wishes to bring it with them-why can't the Board reject?

RE: >> "If it's in the bylaws or property lease, there is [precedent]."

I don't know how else to say this: NO, there is NOT.

Corporate boards are NOT courts of law. Only courts of law can establish legal precedent. Co-op boards are not courts! Only courts can set precedents! How much more simply can this be explained?!

The board CAN reject. The point is, it isn't REQUIRED to reject. See my just-posted response to CDT.

Bear in mind, I'm someone who likes living in a no-dob building, so I'm not arguing from the standpoint of a pet fanatic. I just hate seeing armchair attorneys talking about "precedent" without fully understanding what it means. Too many episodes of "Law & Order," I guess.

This gets me curious, though, as to why a blanket no-pets policy. I'm wondering what the rationale is to ban goldfish, hamsters and turtles, say, not to mention cats, which for all their faults are usually quiet and don't need to be taken out on the grounds or elevators. But goldfish? Really?

Above should read "no-dog building," not "no-dob building." Which is funny, since "dob" is the initials of the Department of Buildings...!

I believe all these legal issues began many years ago when an older grey bearded man had two of each animal as pets on his property. He kept them even during times of heavy rain and floods.

Noah

For goodness' sakes, get over yourselves. A co-op board is not a court of law. It's a board room. You are not setting legal precedents even internally.

So why post the question in the first place. All people did was take time out to try and help. Am I missing something here.

Bob

Because it's factually incorrect to say it sets "a precedent," and gives bad, bad advice to the person who asked. Self-important board members act like they're Supreme Court justices and their decisions set "precedents." We're corporate boards, and a good corporate board is nimble and flexible and deals with individual situations in the best long-term interests of the corporation.

We are ALLOWED to make exceptions when need be. All we have to do is justify them on reasonable grounds, and if need be deal with the political fallout, if any.

And in this particular case, the thing to do is make an exception based on compassionate grounds. If the cat in its dotage then starts howling (which the initial questioner did not indicate was the case), then it becomes an issue of noise that would be dealt with the same as with someone's noisy TV. All these people saying, "No, no, no! That would set a PRECEDENT!" are giving bad, factually inaccurate "advice." I don't think there's anything there's anything wrong with thinking before we speak, or maybe doing a little research before giving advice.

So I guess you just answered your own question then? Best of luck with whatever you decide

Bob.

West City Board Member originally wrote:
>Finally, the son has a cat (old-not going to last
>too long-so they say) but we have a no pet policy.

This statement precipitated one of the odder discussions I've seen on this board in awhile. A few comments:

(1) You are completely within your rights to reject the application on this basis alone. You have a No Pets policy and the guy has a pet. What could be more clear-cut? Other than the 14 protected classes we all know about, you can reject an application for any reason whatsoever, so long as you're consistent.

(2) On that note, consistency is the key. If you let in some people with pets but not others, and you have no clearly defined standards, you're in trouble. You will effectively render your pet policy unenforceable because you're required to treat everyone even-handedly, and you're not.

(3) Once you let in one pet for a vague reason (not a medical one), you've set a precedent. Yes, a precedent! No, JB, of course not a "legal precedent" in the sense of a formal legal decision, but a precedent in the colloquial sense: "An example that is used to justify similar occurrences at a later time." If you let in one guy with an old cat on the grounds of compassion, you've just set a precedent *for your building* and you're stuck with it.

(By the way, our building has never had a No Pets policy and is not considering one.)

If a "precedent" isn't a "legal precedent" then it HAS NO FORCE OF LAW.

If it has no force of law, then you are NOT stuck with it.

I know most board members haven't previously served on corporate boards -- which is what a co-op board is -- but a board is allowed to, and often does, make nimble, flexible decisions that can involve reasonable exceptions to past policy.

Then it becomes a political issue -- but it's not a legal issue.

As long as the board can show it's acting in the best long-term interests of the corporation, is not enriching itself, and it not arbitrarily favoring one shareholder over another, "A board can decide to not enforce a rule," according to attorney Joseph G. Colbert, a partner at Kagan Lubic Lepper Lewis Gold & Colbert, and an adjunct professor at St. John's University School of Law, quoted right here on the Habitat site. Speaking about house rules and bylaws that the board passed, and not amendments to the article of incorporation, "the board, like any political body, can interpret when these rules can be enforced, subject of the approval or disapproval of the residents."

Just because a board gives exception to a quiet, aged cat on defensible grounds doesn't mean it's legally required to allow someone to keep three snarling pit bulls.

JB wrote:
>If a "precedent" isn't a "legal precedent" then it HAS NO FORCE OF LAW.

Who's talking about "force of law"? We're talking about the requirement to treat all shareholders even-handedly.

>If it has no force of law, then you are NOT stuck with it.

Of course you are. From the moment you allow one shareholder to move in with an aging pet for compassionate reasons, every new shareholder from then on will demand exactly the same exception for *their* aging pets. And they will be correct to do so.

>I know most board members haven't previously served on corporate boards
>-- which is what a co-op board is -- but a board is allowed to, and often
>does, make nimble, flexible decisions that can involve reasonable
>exceptions to past policy.

Yes, reasonable. And consistent. And not arbitrary. If you make an exception, you're implicitly agreeing to make the same exception for other shareholders in the same circumstances.

>Then it becomes a political issue -- but it's not a legal issue.

But it *becomes* a legal issue if someone challenges the decision for being capricious and arbitrary. ("You let in his aging pet; now you gotta let in mine!")

>As long as the board can show it's acting in the best long-term interests
>of the corporation, is not enriching itself, and it ***not arbitrarily
>favoring one shareholder over another,***

Aha! You found it! If you allow one person to move in with an aging pet, but not ALL such people, you are indeed "arbitrarily favoring one shareholder over another."

>"A board can decide to not enforce a rule," according to attorney
>Joseph G. Colbert, a partner at Kagan Lubic Lepper Lewis Gold & Colbert,
>[...] "the board, like any political body, can interpret when these rules
>can be enforced, subject of the approval or disapproval of the residents."

Sure, absolutely true. But as you yourself noted above, the board can't arbitrarily favor one shareholder over another when deciding whether to enforce a rule.

>Just because a board gives exception to a quiet, aged cat on defensible
>grounds doesn't mean it's legally required to allow someone to keep three
>snarling pit bulls.

Naturally. But it does mean you're going to be stuck with allowing quiet, aging cats because you've set that precedent. And from a practical standpoint, I'd guess you're going to start getting complaints from people who want to keep quiet, aging dogs as well.

On top of all this, the original poster noted that the prospective shareholder is the son of a board member. To avoid any appearance of a conflict of interest, the board needs to be exceptionally careful to define precisely why an exception is being made.

First you say

>>Who's talking about "force of law"? We're talking about the requirement to treat all shareholders even-handedly. [If it has no force of law, then you are NOT stuck with it.] Of course you are.

No. If it's not force of law, how can you be stuck with it?

No one can make you stuck with anything unless there's force of law behind it.

And as I've repeatedly said, it's not "arbitrary" if you give a justifiable business reason that doesn't violate the law regarding self-interest, etc. As I've also said good will is a tangible corporate asset.

RE: >>it *becomes* a legal issue if someone challenges the decision

Anybody can sue anybody else over anything. That doesn't mean the law is on their side or that they have a case. I can think of a dozen reasons off the top of my head that two situations with quiet, aging cats could lead to completely opposite decisions. I'm sure you could, too.

Only courts can set legal precedent. Not corporate boards. We're doing a disservice to co-op boards by giving them the false impression that they cannot make nuanced, flexible decisions when need be for the long-term good of the co-op.

I think the best example of that may be the board maybe three years ago that demanded a shareholder remove a small U.S. flag magnet from his door, put up in the wake of 9/11, citing co-op rules. This became a cause celebre that embarrassed the co-op on TV and in national newspapers, affected potential buyers' perception of the co-op, etc. -- all bad things for the long-term business of the corporation. The board eventually came up with -- you guessed it -- a nuanced, flexible response that solved everyone's problems. THAT'S what we should be encouraging boards to do, and not simply make unthinking, kneejerk decisions out of fear of some non-existent "precedent."

I'd love to know what you think of the above example.

I think we should move on to another topic. The horse is dead...

Bob

It's interesting that you bring up the Willoughby Walk case, as it illustrates precisely the points I've been making. The case is pretty much as you describe it: a guy had had a flag magnet on his door for years, but one day the board decided to start enforcing their "No decorations on doors" rule and ordered him to take it down.

Predictable embarrassment resulted. The board knew they couldn't just say, "Okay, THIS guy can have his flag magnet, but no one else can have any door decorations!" This would favor one shareholder over another, which is both intrinsically unfair and a violation of NY BCL Sec. 501(c).

The solution that the board devised was anything but "nuanced and flexible" -- that's exactly what you *don't* want when crafting an exception to a rule. You want the exception to be as unambiguous and precise as possible, since you're obligated to make the same exception for ANY shareholder under the same circumstances. In this case, the board simply grandfathered in any door decorations that were more than five years old. The exception applied to ALL shareholders, as required.

I think we may be saying the same thing at this point, and semantics is getting in the way.

"Nuanced" MEANS "unambiguous and precise." Nuanced is the OPPOSITE of "vague and overly broad."

JB wrote:
>"Nuanced" MEANS "unambiguous and precise."

Hmmm, my sources say that "nuanced" means "possessed of multiple layers of detail, pattern, or meaning."

But in any case, I agree that we've pretty much exhausted the subject for now.

I don't know what source you're using, but Merriam-Webster defines it as

"a subtle distinction or variation"

Which is exactly what I was saying.

When co-op boards react like Pavlov's dogs and don't try to actually, y'know, LEAD by finding Solomonic, nuanced solutions to difficult issues, then they might as well by interns working off a yes/no checklist.

A creative solution for shareholder N is great, so long as the board realizes it will need to offer the same solution to shareholder N+1 under the same circumstances.

That's debatable. We can certainly agree to disagree.

MSL – A coop board should get a sale contract with any sale application package they get for review and approval. If a coop has open house rules or sale policies (e.g., minimum 80% financing, parents can’t buy for an adult child), SHs should have them early on, and you’d know who’s planning to sell well before there’s any sale contract.

A board member who decides to sell should tell the board asap, especially if the annual meeting isn’t far off. The board should know this since that board member won’t run again or if he doesn’t sell before the annual meeting and does run again, he’d have to resign when he does sell. In either case, the board may have to look for a candidate to replace him which could take time, especially in buildings where there aren’t many SHs who want to run for the board.

Many times a seller goes into contract and the board does not know. They will and do know however when the sales package comes in for review. The sales package must then include the contract.

~AR

Many prefer to work almost exclusively through the board, I think.

I am sure there is a protocol in your building to communicate emergencies in your apartment. The rest is just routine questions or communications. My advice is to follow the proptocol to communicate with the board or managing agent as prescribed by the By-Laws: in writing and mail including certified/return receipt if important enough to keep a paper trail of your communications.

If your building has a dedicated manager, it is expected that you may call and you get a prompt answer. If your manager is shared, you may have to compete, not just with other residents in your building, but with 5 to 7 building residents and 5 to 7 boards. In other words, the agent may be too busy with what may be important to get done for your building or other buildings at the time of your call. Thus, writing forces the agent and/or Board to answer your question by focusing on your request.

AdC

Transparacy! Communication! EmailPower! This WAS a cronic complaint in our building UNTIL, the Shareholders learned the Power of Email and CC'ing the board.

Send an Email, and CC the Board. When the ManagAgent replys he will more than likely leave the Board off, but when YOU reply, put the Board back in Copy. This will get thier attention and create your own paper trail -- and they cannot claim that they did not get your call/letter. You will be surprised by how quickly everyone pays attention. Also, S/H tended to be wary (afraid?) to do this, until they realized they got results. VP

This is always best for an agent that is too busy or is just irresponsible with returning calls. Notwithstanding that, all calls should be returned within a certain timeframe, it is written into my management contracts.

~AR

I would be absolutely schocked if you hire Orsid. We had problems with them for so many years. When we finally parted ways, none of the transferred paperwork was complete.

Cooper Square sells management, they are not efficient at all. Their back office is terrible.

Matthew Adam Properties, Inc. Great back office and the agents are wonderful.

After our recent annual shareholders meeting, the directors voted for the new officers, or tried to. No one would agree to be president or vice president. The previous president, while still a director, said it was too time-consuming, both personally and job-related. With no leadership, the directors dispersed but agreed to try again at their first monthly meeting. Later, the ex-president offered to be acting president until the board can try again, and all directors agreed. Our By-Laws require 4 officers, but will not allow the secretary or president to hold any other position. No one would agree to be co-presidents either. Has anyone else been through this?

This probably should have been posted as a new tread but here is my opinion and advice...

Obviously the BP is doing too much... Are the others on the Board not carrying their weight?
Is the Management company doing their job efficiently?
sounds like an evaluation and fair distribution of responsibilities are in order first… beginning with the management company.. the Board should ONLY be overseeing management and ONLY do what you do not want them to do…

At the end of the day, the management company should be managing the building and the position of any board member should never be onerous to the point of no board members fleeing the positions!

Sounds like reorganization is in order…

Best
~AR

You present valid points, starting with that it should have been a new thread. Our management company does not seem to be efficient -- writing overdrafts, paying duplicate invoices, losing track of where funds are deposited. So this Board has to oversee it regularly. Reorganization is a great idea, but in what way? Workshops are available year-round, but the only director who attends is the BP. Delegating responsibility to other directors is something the BP has to learn also, but then has to follow up, making another job.

First the proper role assignment and responsibility assumption must take place.
Management must be provided with a list of tasks and expectations to complete and perform on a regular basis. This will include everything!
Once Management identifies areas that they cannot or will not take responsibility for, then the Board must assess and assign according to the position and requisite of their positions and availability to fulfill the particular duty.

Mind you that not much should be left after management takes their full responsibility. If they have issues, get rid of them.. plain and simple. It is easier to hire a new management company 1 time than to deal with a bad one on a consistent basis.

(Also bear in mind that sometimes when a board starts micro-managing management, they step back and regress.. sort of like a child and overbearing parent.. so first try to put your expectations out there for them before dumping them)

How big is the property? Are you on the Board?

~AR

Here's the bottom line...
After working with many of the companies mentioned on this site and now as the Director of another... No matter who you go with, where you go, you will have challenges. You will also have many people with horror stories of that company simply because bad news travels more efficiently than good...

My suggestion to you is to first list out your needs, then your desires and do this with each management element - managing agent, responsibilities & protocols.. include everything from how the bills are paid, to communication to when you want to see the monthly financials, etc...

Then interview and choose a company that is willing to put all this into the management contract. Additionally, you want to meet the agent assigned to the building and have him/her written into the contract as well (just so you don’t get a ringer)...

I am guessing you are paying 10K a month(ish) for management... Since you are 300 units... Have you considered hiring and maintaining an on site manager?

Best
~AR

AR makes several good points. I also worked with a few companies during my 30 year career in the management business and suggest that as a 300 unit coop you do a lot of homework before making a decision. The best source of references can be obtained from your Coop's attorney and accounting firm. Since they will be working closely with the management company they will want to see you select a professional company that maintains the books and records with efficiency. If you don't have confidence in the attorney and accounting firms that is the first change you should make. If you do have confidence in them then they should be the go to guys. I would suggest you look at owner/management companies since they know the importance of the bottom line and do not just look at real estate as a stack of brick and mortar.

i am on the board of a 350 unit coop and we had terrible experience with cooper square and orsid realty. it is impossible to get anyone on the phone who knows what they are talking about. After years of searching we found an excellent agent, Harry at David Eisenstein Real Estate. They are on top of every detail. they visit te building at least once a week. you can give him a call at 212-582-9080 ext. 13. if you have any questions email me directly.

I am sure he is a wonderful person/agent but it sounds like a sales pitch to me?

Vinnie..........

I HAVE ABSOLUELY NOTHING TO GAIN

Please review spelling before sending

Can you be a little more clear about the details? When did the board tell the buyer of these requirements? How did you find out? Do you know when or why the board decided to enact these rules?

Have you brought up the renting problem to anyone else?

As a managing agent, I recommend that the building's attorney be made aware of this situation especially if the authori is correct and no notice was provided to shareholders. My firm had a similar situation with a coop in Brooklyn where it became clear that the board were making decisions that were favorable to friends and less favorable to what they called "problematic shareholders." As agents we decided to terminate the management agreement.

i know the seller very well, what in our opinion looked like a better buyer, they had a friend from work whose 30-year-old son was looking for a place, however he didn't have 15% down, so that didn't look like it would work out.
i found out since the seller contacted me as soon as the buyer called her.
the buyer had called the management company, or whoever they were supposed to contact, that is when the buyer was told of this previous unheard of 6 and 6 extra charge. The buyer contacted the seller who contacted me to see if I had ever heard of this provision.
This buyer looked like a perfect shareholder for the building, since they lived here as the building was converting to a co-op around 25 years ago. They also have other family members that are shareholders here.

sorry about the atrocious spelling in the first question, I couldn't find an edit button, and I think it got sent before it went through the spell checks. I can barely read it and I wrote it, wish there was an edit feature. i may have to rewrite it later.

As far as the ratio of rentals, there is one person on board with me, another original shareholder, i looked around trulia and noticed there were a couple other apartments for sale by shareholders. So they just want out. Another person i spoke to thought bringing it up at the annual meeting was a good idea, this was months ago.
i believe in researching the options and knowing the correct answers, remember this is the building where the managing agent tells the shareholders that they are not entitled to a copy of the shareholders, and the BOD refuses to make known their contact information. the president and vice president are related and inside deal the parking spaces for their kids, skipping shareholders on the waiting list.
And to top it off the president had asked this seller to rent the apartment to one his kids who was getting married shortly.

It may be that the board had doubts about the buyer's ability to pay maintenance - irregular income, for example - and to cover assessments (should they arise), but did not want to disallow the sale entirely. In cases such as this, the board's entirely within its rights to require financial "guarantees" such as 6 months' maintenance up front - or any other arrangement the board feels will offer proof of financial stability.

That money should be placed in an escrow account, I believe.

can the board pick and choose who they require this from, in other words, not everybody needs this , but only certain people?
and would the board as a whole have to vote on this requirement?
i wonder if the people doing the interview are just making things up as they go along, without the rest of the board approval, or notice.
i know that not all the BOD members knew anything about it.

You are correct. In your example each apartment should be valued very differently, but likely is not. This is a major flaw in appraisals as well as potential purchasers evaluation.

Keep in mind that generally the appraised value of a co-op comes from recent sales comparables in your building or similar buildings. If buyers are making informed decisions when purchasing an apartment, they have carefully reviewed the finances of any building they are considering and will take them into account when they make their decision. Consequently they will pay more for one that is financially healthy and subsequent appraisals will be higher because their market value will be reflected in sales comparables used in future appraisals.

So while I have had my owns bones to pick with appraisals on occasion, in this case I have to defend them. Appraisals are performed for a number of reasons and the value is calculated using a number of different methods; however in general appraisals reflect market value and market value is determined by how much the consumer is willing to pay. Appraised values merely reflect the market, they do not determine the market.

Dear Board Prez,

I have read your posting a couple of times now. In addition to a buyer, owners and sellers may also get appraisals done. Owners may have one done for insurance and re-finance purposes. Sellers may have one done in order to assist in setting an initial purchase price.

Would you response remain the same while taking these additional populations into account? I still believe that it is very difficult to compare two similar units in separate co-ops and I am hoping that more disclosure will assist users to making an informed decision.

I would appreciate your further thoughts.

Steve, I agree that it is difficult to compare two units in different buildings; however yes my response would remain the same.

There are various purposes for an appraisal, which may use different methods for determining the "value". Appraisals done in preparation for a sale or by a bank for a refinance are primarily concerned with market value and would use "sales comparison approach" to determine value. Appraisals done for insurance purposes are more concerned with replacement costs and may therefore use a "cost approach" or a combination of approaches for determining value.

Market value is considered the amount that a ready, willing and able buyer would normally pay for a property in an arms length transaction and must be distinguished from the price that may be paid. If a building is in outstanding financial condition, that will reflect positively on prices that sellers receive and improve subsequent market value appraisals in comparison to an otherwise similar building with poor finances.

Steve--
I'm active with ESHC [East Side Housing Coalition], think your idea has merit, & would like to discuss w/you offline. Please contact me at condocoop@gmail.com
Thanks--Larry