Subscribe for Daily Updates!
Have any of you had experience with initiating minimum share prices in your coops? My Board is discussing the topic and although we have read many articles on the subject both pro and con I have found nothing that indicates it works.
Join the Conversation Comments (1)You might be referring to the 'right of first refusal' where the coop has the right to buy the unit at the offering price. Not sure if this takes precedence over an offer from a buyer. Should be in your proprietary lease if it applies. A sale well below market value has an effect on future sales as it becomes a value for a 'comp'erable sale, used to compare prices for similar apartments. Most coops claim to have the right to refuse a sale for any reason or no reason. In my experience, the boards pay most attention to the financial aspects of the sale. No one wants to deal with a non-payer, evictions or foreclosures.
Right of first refusal is a method boards can use instead of setting floor prices. It is generally used by Condos and is included in their bylaws. For a Co-op board to acquire this power it must be voted on by a majority of its shareholders, as an amendment to its documents. If you are so sure that an apartment is worth more than it is selling for the board can buy it and sell it for a higher price, that is assuming they will get a higher price. In other words put your money where your mouth is. What I am interested in, is hearing from Board members that have instituted floor pricing and finding out if it worked for their Co-ops. Did the value of their shares stay at a desired level, go up, or are apartments languishing on the market looking for buyers as I have read in many articles? Thanks.
Introduce yourself to other members of Board Talk! Log in below or register here.
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.
before you do it, check on your liability if you set a minimum price and the seller loses a buyer because of it. somewhere in the back of my mind, and i could be wrong, but I remember that if you do it, you must be prepared to buy the unit. I haven't researched this in a long time and are just going by fuzzy memories, but I do recall some legal responsibilities on the part of the co op.
Thank you for rating!
You have already rated this page, you can only rate it once!
Your rating has been changed, thanks for rating!
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.