The board should always interview anyone that wants to purchase an apartment unless several board members have previously met the individual.

You should check your PL and attorney. Im not sure "family" members need to go through formal interview. You could set up a meeting just to meet and introduce new person to the community.

All perspective buyers need to be interviewed by the board or an interview committee. Bad move if you do not interview.

Jeanne - Did you not interview based on your familiarity with the purchaser, or did you not interview because you intend to reject the purchaser's application?

There seems to be some points missing from this conversation that Steve R. started. (Thank you for bring them up Steve!) First: Your Management company should be vetting the application package for completeness and acquiring any and all credit reports, criminal reports etc. whatever your Coop requires, once complete is is sent to the review committee. Any additional financial questions should be sent only through your Management Company to their Agent for acquiring the necessary answers and additional info. If the applicant doesn't pass the Board internal financial review of their application package then you should not interview. A failure to properly provide adequate answers is grounds for rejection. You never interview unless financials are passed as it opens the door for a lawsuit that you rejected them for one of the myriad 'protected' reasons. IF they pass the financials and they are acceptable to you then you must do an interview to uncover any possible other issues that might be a cause for rejection, or as an opportunity to answer their questions as a courtesy and last chance evaluation. Your interview committee should be well versed in technique and also what they can not ask. As much evaluation subjective conversation should be on the phone or in person by review Committee members. All email is evidence in a court case under rules of discovery. Second: As far as I know, they only time where a member of an immediate family has an inside track/special circumstance definition in the HRs or BLs is in the transfer of a specific unit directly from one immediate family member to another. It still requires financials and stock transfer but is mostly, but not entirely, a free-pass through situation.
Third: A family member purchasing an available apt otherwise, is no different than any other outsider and is treated accordingly. It is, however a confrontational issue if rejected, and the possibility that the existing shareholder takes umbrage, this needs to be handled diplomatically and carefully. You are accepting them on the merits of their application, NOT the merits of your friendship, or lack thereof with the family member already in residence. If their financials fail, the family member is under no obligation contractually to render support unless they are a contractual guarantor of the purchase.
Four: The shareholder in your face should be referred to the Management company for answers, even though it technically is not their place to ask as they have no standing in the application if not a co-signatory of the purchase. Only the applicant can ask, or their Agent (and they will likely receive no meaningful satisfaction). Board members should be cautioned to say absolutely nothing as anything can be misconstrued or altered to create a lawsuit. All legal answers should be contained in the acceptance/rejection letter.

All excellent points, dsi1. In particular, I'm always astonished by comments that a person "didn't even get an interview," as if the purchase application barely mattered and the real accept-or-deny decision was based on the interview. It's just the opposite: the purchase application is everything, and the interview is of very little importance.

Not that boards should dispense with interviews; they're good both as a meet-and-greet and as a final validation of claims on the application. Maybe the applicant's "small, quiet dog" turns out to be a barky Great Dane. Or maybe the applicant goes nuts and tries to dismember one of the board members with a hatchet. Well, probably not. But it's only for such objective, egregious failures that a board should reject an applicant once the process reaches the interview stage. Otherwise, as dsi1 notes, you're opening yourself up to a possible lawsuit if the applicant can claim discrimination based on a physical attribute that was unknown to the board before the interview.

All this brings up the question of ... now that you've passed on the financial package and have proceeded to the interview phase what questions can you ask prospective shareholders without opening up a can of worms? Should it just be a review of their package? On our Board the President lectures on how the co-op works such as we are responsible for the pipes in the walls etc. I've always thought this is not an interview but considering the sensitivity of the situation perhaps it is to avoid possible lawsuits from any kind of questions. I'd like to know what you and other Boards consider to be an interview? Also, isn't any rejection based on that interview other than unveiling a lie on the financial package open to accusations of some form of discrimination? Thanks

Both Habitat Magazine and The Cooperator Magazine have published articles in the past year about what kinds of questions can or shouldn't be asked at the interview. These articles are a good place to start. You can also do a Google search, but I think the two sources above should provide most of the information.

As Carl and others have stated, the purchase application is where most of the allowable reasons for rejecting a purchaser originate. They doesn't have to be financial either. Application questions can include diplomatic status, legal history, occupational (as in running a business out of the unit that has client traffic or excessive package deliveries and pick-ups, etc), form of unit ownership (trust, LLC, etc instead of normal tenancy), firearm ownership and storage, etc. If everything in the application passes review, rejection after the interview if fraught with dangers and potential legal liability.

Interviews are interesting, this is where you can also, legally, carefully delve into ambiguities that weren't cleared up in the financial and application review. Let me stop and make a point here, the full application package includes financial info, but is not limited to that, and within the limits of the law should be able to reveal all sorts of interesting other info as well. We include notarized no dog ownership or harborage docs which cause people to step back on the misrepresentation of no pet, and insurance requirement docs as well, and various other items and checklists that can cause things to 'pop'. Everything has to pass review by our very conservative, straight up Board Attorney. It is a work in progress for 25 years. We have discovered claims to be a covert CIA operative with demands for immediate approval as they were leaving on an extended mission to the mideast, along with being told that we couldn't call their references due to the fact that the references would deny knowing them... 2X counting of assets by 'relabeling them' discovering that there was a child at a local Univ (they brought them to the interview, so fair game) and all the paperwork contraindicated a move from out of state for the parent, a real life mobster/wise-guy with a problem showing all the income as there is no W2 for loansharking, what proved to be a bid for a secret love nest for an out of town Exec due to his furious fight for us to not contact his wife for her references, and a few others of note. So, the interview is fraught with potential, we hold them in the back room of a local restaurant with wine service... In the end result, you are shopping for good neighbors. They don't have to be 'your kind of people' just good decent people with the appropriate level of assets, no egregious baggage issues you can discover. You can't discover glaring hygiene issues from an application. We've had them arrive drunk as well. You never know what's walking through the door, but I am pleased to say we have approved just about every kind, type, color, race, religion, and jobs, with relatively few errors. The interview helps.

dsi1 - I definitely do not want to diminish the importance of purchaser interviews, but boy, would I love to sit in on some of yours! <chuckling> Ours are so boring and plain vanilla compared to what you've had to go through. We have a hard time getting more than 2-3 board members to attend because there is never anything controversial. Sometimes I wish we were handed a questionable package, just to shake things up.

I'm sure there are two sides to every story, and I imagine it is not easy having to deal with some of these oddball cases. You are right though, they can be fraught with potential.

Thanks for sharing,
--- Steve

I think that the Board needs to perform some due diligence too. A management company can put anything down for an answer. How do you test that the answers are real? I think you could start by collecting:
• 3-5 references, calling the reference and having a short talk
• 3-5 examples of managed property that you can walk/drive by and see how the buildings look and perhaps talk to a few residents coming and going to see what they have to say.

Good luck with your search!

Very good advice - walk around buildings they operate and speak to residents - you will get a good feel for the building and the management firm. It might even make you decide to self rule.

Yes, walk around buildings they operate but include upper floors, not just the lobby. And speak to more than 3 residents.

Again, the best approach is self rule. Our management company has destroyed our building to the point where it is impossible to even sell a unit.

Since there is no regulation, the best approach is to self rule. Get people who are competent on the board. Don't get people who on board who self deal, get kickbacks, etc., use building's discretionary account like a piggy bank, etc. Also don't put one group of friends on board - probably better to get people who will invesitage each other. This sounds extreme but after seeing what happens to condos, this is the only way. Get independent accountants and lawyers (not affiliated with each other).

living in a coop taking over by a family who turned it into their private business this advice is right on. I meet people who have been on boards, that actually ask me how to get a city streetlight fixed. these are the people many boards that have 2 controllers want. People that are sheep and will not ruffle any feathers. They have nasters degrees, but dont know what due diligance is or the name of the bank we use is, nor have they ever seen anthing that was not shown to them. This is what has made the coop field a pure cashcow for managment companies,some as in this bldg working together, so they eackh get a cut of the contracts.
The board president becomes so indignant when i question him about finances and his self dealings, and bring it up at annual meetings. His board members will not, even after written complaints and the board lets him run the meetings that he is involved in the self dealings.
Tine for a 1998 type crackdown again, plus let all the stories come out.

Hi,

Your only recourse may be suing the sponsor for damages if your contract for sale falls apart. I would ask a lawyer.

Good luck!

Why bother people? If they have an ocassional sale like a little tag sale - why not mind yr own business instead?

Hi,

In my complex, the super has the largest unit! When he retires or moves out, we are going to explore giving him a smaller one or not providing one at all. We want to use the space to increase the size of the gym (next door) and/or other community uses. I wonder if it is cheaper in the long run to rent a unit for him in a neighboring unit (so he is close) than provide a unit ourselves. I am not just talking out of pocket costs but also the opportunity costs of having that much space tied up.

Good luck with your search!

Hi, if the bulding needs the money (low reserve fund) then I would rent the apartment. But you will face a problem for a new tenant to pay the high rent. If your tenants are paying a fee for the gym, expand and increase the gym member ship fee.

Good Luck

Consider the long-term consequences if the apartment you rent "in a neighboring unit (building??)" becomes unavailable when the lease on that apartment expires. Buildings over a certain number of apartments must have a live-in super or (if I am correct) the super must live within a certain number of *feet* to the building. If you lose the current rental for your super, you may be hard pressed to find something that meets the proximity requirement at a cost-effective price.

Consider advising whoever replaces your super when he retires that the apartment the new super is initially given will not be permanent, and that he will be moved to a smaller unit when one becomes available. Make this an up-front part of the hiring process so there are no misunderstandings later on. Then, when a smaller unit becomes available, move the super into that unit and reclaim the larger unit for your purposes.

i believe that the requirement for the live in of within a certain block is for union supers. Nothing wrong with union supers, if they are truly professional, and know their stuff, plus have a personality that makes them like family.
If your management company doesn't know these basics, they do not know management.
I think it is a good idea to have a live in super, with the undersyanding, that they have to be a homeboy, if they have hobbies , better to have them arounfd home, not away all the time, if they are not going to be there after hours, no reason to supply an apartment. An apartment is a huge bonus

i believe that the requirement for the live in of within a certain block is for union supers. Nothing wrong with union supers, if they are truly professional, and know their stuff, plus have a personality that makes them like family.
If your management company doesn't know these basics, they do not know management.
I think it is a good idea to have a live in super, with the undersyanding, that they have to be a homeboy, if they have hobbies , better to have them arounfd home, not away all the time, if they are not going to be there after hours, no reason to supply an apartment. An apartment is a huge bonus

Under the New York City Administrative Code, any building with nine or more units must have a “janitorial service” or super either in the building or within one block or 200 feet of the building. The janitor or service must be available by telephone 24 hours a day.
A single super or janitor is not deemed capable of serving a building or complex with more than 65 apartments. In such a case, at least one additional super or janitor must be employed and at least one of them must live in the building or close by.
I don't see any reason why a security deposit can't be required, unless there is a provision in a (union) contract or something similar prohibiting it.
An apartment can be provided in another building as long as it's within the required proximity.

I thought that by law, the max per bedroom is 2 so you are short 1 bedroom.

Dear Pres, There is a law governing the number of people allowed to occupy an apartment -- and I dont mean to be flipent -- but would you approve this large and growing family -- who will be here for years -- as owners? Common sense should give you the answer.
VP

It's hard to go by NYC law, cause that law says you can have one person per 80 square feet, so technically the supers apartment could maybe have 10-12 people living here without a problem. Putting that aside, we do recogize it will be tight. .

too many people. they will drain resources such as electricity , water etc.

The corporation does not pay for the supers electric, we give him a small allowance only. As for the water, you just do not know how they are going to use it . Thanks for your opinion.

You will regret it and kick yourself for many years to come.

I believe NYC housing codes require 80 square feet per occupant. Nothing requires having a dining room or living room. Other than bath or kitchen, a room is a room.

Have the OWNERS who invested in this building,who live next door, down the hall and -- most important -- below and above this apartment approved the fact that the Board is going to pack in six people in (four growing children) -- into a two bedroom apartment -- who will make a lot of noise, crowd the elevator, play in the hall and add to the laundry room traffic etc etc etc? Not to mention the fact that many owners buy Coops in hopes of a more peaceful quality of life.

We have a studio apt across the hall and they make enough noise for two familys, we have a doctors office who see patients at night and sometimes during the day, we have another apartment far away from the supers apt who has a large bird that screams like its being abused... and no compliants. We have not decided to accept this super but do appreicate your feedback.

Artie,
Your statement is very refreshing to read. What made New York different form the rest of the country is that co-ops control the market and not condos. As you stated that a group of people, that may not have known each other very well in the beginning , would take a commercial building and transform it into a place to live and raise a family. This is how we have neighborhoods that are now called Tri-Beca, SOHO, NOHO, Chelsea, DUMBO etc. People took pride in their building and neighborhood as well as the people that shared their building with. Now we see less and less of this and more insensitive on how much money you can make off your space or how much it is worth.
It is hard for some people, like your co-op president, to understand what it was like for the sponsors of your building to start from scratch and to transform a commercial building into a co-op. Now if you invested in stock 35 years ago I'm sure there would not be any resentment on their part.
Co-ops have also help to keep New York out of the free fall of the housing bubble that the rest of the country has experience. One reason for this is that co-ops unlike condos, do not encourage speculative purchase in their buildings. I only hope it stays that way.
It sad to see, as some of the contributors of this forum, that they only want the board to contribute, or should we say, control all the functions of the co-op and to deny their shareholders the right to vote or to have a say who they share their building with.

Artie, truer words were never spoken. We have that in our co-op. When new people come in at a higher price, you are correct, they resent or want to get rid of the original buyers. That is a shame, since the original people bought in to have a home not be pushed out. There has to be some sort of legislation or something to help people who thought they were buying a home to stay in, not be shoved out. This is very disheartening with new people coming into a building that was originally priced for affordability. Let us all find a way to work on this.

Mellisa - you (or someone like you) posted something almost identical a while back. Until the Habitat staff removes this thread, your bigoted xenophobia is not welcome here.

No, and if I were I would not base my opinion/resentment on the country of origin. More like I made a mistake in hiring an individual.

Some very large coops have a committee of non board members that handle sales. They make recommendations to the board, which in turn makes the final decision. Not the committee or the shareholders.

Regarding disgruntled shareholders, not much you can do. It's part of the daily routine of coop life. Just keep the residents informed, educate them when necessary. As long as your decisions meet the expectations of the majority, and the needs of the building, you should take pride in your work. (it is a non paying full time job by the way)

Frank, With a coop your size it is very common to have the shareholders
vote on sales. That is what makes a coop different form a condo. In a condo the board handles all sales and the shareholders do not have a say. In a coop the shareholders have more control or say in who enters in their building. If you are a Board member this may seem unfair to you, but for a coop shareholder who has to live next to a new family or couple it is their right to have an input on a sale. A sale to the Board could mean something totally different than to a shareholder. The Board may push a sale through because it will bring more money into the building with the flip tax and make their life easier. A shareholder may see it as a quality of life issue. As a Board member you should give a little history of the new people that wants to move into the building and have them meet the shareholders and have an open discussion. Then let the shareholders have a vote, it's called democracy.

Bob,
I've seen this issue from three sides. I've been in the building when we used shareholders voted. It was a bit of a farce. Shareholders were led to believe board did its due diligence and background checks. Little did we know at the time the board did very little research. Board also said "no lawyers" would be admitted,would also have the children come to the voting meeting and on some occasions jjust the board would meet prospective buyers. It seemed to me that the shareholders were simpy voting on "looks" and their idea of a fit. Also, the vote would be a show of hands not a private ballot. No pressure there to say "yes". We ended up with having a lawyer in the building who took the building to several courts.

It's is a long story but this issue of having shareholders vote is not democracy - voting in a board and upholding the community's PL and house rules is democracy in action.

Its funny, as small as the building is no one really sees one another. It's not summer camp and pot luck dinners. It's living under one roof and hopefully all will treat their neighbor with respect.

I would end with the fact that a board follows (or should) code of behavior/ethics and stays abreast on new laws and coop matters. Shareholders do not always put in the effort to stay educated on coop matters.

Hi Frank-I guess my question is this: what would you have these people do? This is a very small co-op - but it seems that there is a really bad feeling that has never been resolved. Either it gets dealt with in a way that everyone agrees is to make a positive change or it will just stay the way it is. You say no one really sees each other and there are no "pot luck dinners"-frankly, maybe there should be on occasion. If the only time people meet as a group is the annual board meeting it is really not a time for socializing or airing grievances. Do you ever have informal gatherings? Has anyone ever suggested this? If people really want it to be different they should put the effort into making a change. I know everyone is busy but it is such a small group there should be a way for enough to get together a couple of times a year. And not for simply a "kumbaya" moment, but a time to behave as neighbors and fellow shareholders who all have a real stake in making a successful co-op. Because in so small a group, despite the efforts of the board, which I am sure is trying to do its best, 3 disgruntled shareholders out of 12 is still 25% and that is kind of a lot. It seems that there is a lot of bad feeling that has to be dealt with or it festers as it seems to have. Also, people who feel they have no other power often are the loudest in their complaints and look to do whatever they can to make themselves heard. Look at congress. I think maybe you should organize a pot luck. With lots of wine!

Thanks everyone for input. I am exhausted however because this small group is caring a grudge and are not interested in community goals. They continue to make personal attacks on certain board members and now attack coop's professionals. I really think their goal is to more vindictive and retaliatory than for the overall good of the community. After this issue they will move on to another and point the finger at someone else.

When they controlled the board I would add they never gave an ear to others.

Hi, we are small coop and our shareholders vote on the sale.

Another aspect to consider is who will be legally liable if a general shareholder vote denies a purchase and the purchaser sues for discrimination. You must check with your co-op's attorney, but in my opinion only those individuals who are at risk (the board) should be allowed to vote. You also need to also check who and what your D&O insurance will cover. A very convincing argument against having all shareholders vote on purchases and sublets is if they know they may be named as defendants in a discrimination lawsuit and not be covered by the co-op's insurance.

If a coop denies a purchase, if it is just the board or all the shareholders, you should never give a reason why they were denied. If you gave a reason then they can use that to come after you with a lawsuit.

A rejected purchaser does not need the formal statement of a reason to start a lawsuit. They can simply *claim* discrimination, start the suit, and then the legal process takes over. Unless all of the shareholders are willing to assume the financial liability of losing a civil suit, they should not be allowed to participate in a vote that can put a small minority of shareholders (the board) at risk.

Currently boards are not required to give a reason for rejecting a purchase, and I agree with that position.