Your sole responsibility, as a Board Member, is to consider any application to buy with no consideration to legally protected status, such as race, religious orientation, age, etc.

I assume you are a new member of your board and strongly urge you to read widely, deeply and quickly everything you can find about what it means - legally and otherwise - to be a member of a board of directors in a co-op. There are legal pitfalls aplenty, and you don't want to be the cause of any action through unfamiliarity with, say, housing law, as an example.

Thanks for your comments. I am aware of not discriminating against any applicants and FYI I am not Caucasian. However, if the board's responsibility was only fiduciary, then boards would never interview prospective buyers or subletters, right? All the info they would need would be in black and white in the board package.

Not necessarily Carol..

An interview many times reveals insights to the financial picture as well... do they plan on subletting in a couple months, is she pregnant then quitting her job to be a full time mom (cutting the current salary in half), lots of other questions and clues as to the posterity of the prospective shareholder and if they are a character match for your building (ie: they sing opera all day or teach piano in the afternoons... they hate kids and its a kid friendly building..)

Best
~AR

There are other safeguards....
What the board should always do with all cash offers is place a 2-5 year wait period on any refinances. This way, A buyer that would have shaky financials and would otherwise be denied, would be less apt to buy all cash with daddy’s money and then refinance and pay back in a year.
did the way i worded that make sense?

~AR

Thank you for your reply. If the sale went through for all cash with a 2-5 year moratorium on mortgage, it would be too late by then, wouldn't it? Sure, the parents couldn't be repaid immediately, but the building would be stuck with the deadbeat child, wouldn't it?

Yes, but u8nfortunately, if the rest of the sales package was ok, you just have to hope they mature well in the 2-5 years!
Still, the board must approve the refinance and any shareholder changes, so there is still some control.

On another note, if there is a refinance with the parents name on it, it may be beneficial in on sense because it is easier sometimes to collect arrears when a bank is involved (they usually pay the arrears to protect their interest)

Best
~AR

So the parents are paying for the apartment. This means they are gifting the apartment and thus one may ask that they file a notarized letter to that effect? Was a "gift" letter requested. Don't forget gifts are subject to IRS rules.

Are the parents gifting the maintenance? If yes, are they living in the apartment? If no, then in our co-op its not permitted.

Without going through ratios, let me assert that anyone buying a unit in our co-op must have a gross annual salary of $50,000. If two are in the apartment and both are working then the "base" it higher.

Regardless, one may not have annual expenses that exceed 30% of one's gross income. Thus in this case its $13,200 (maintenance) + assessments + electrical; costs + natural gas costs, education costs + + +).

If one moves into the building with or without a mortgage, our rules stipulate there is no new mortgage or refinancing within the first five years following the sale.

A poster here said if parents gift an apt (and mention was made of their paying the maintenance too) - that "one may ask that they file a notarized letter to that effect".

I was in notarization/mortage holding work for years. Many people mistakenly think that notarizing a document means that the signer agrees to comply with any promise made in the document or that any statement made in the document is true.

Having a letter or whatever notarized is verification that the signer is who he says he is - nothing more. It doesn't bind the signer to anything that he agrees to or states just by virtue of the fact that the document is notarized.

Ask for a copy of the IRS gift form....By the way we have sometimes asked an applicant to sign a form that allows us to obtain the 1040 etc. information direct from the IRS. We do this when there is a fish smell to the application. 99 of 100 times, the fish mongers refuse.

In our coop even if an apt is gifted the occupant has to have a documentable income. If the parents are going to pay the maintenance then they have to be co-purchasers with full Board pkgs submitted.

Great note!!