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In our NJ coop, a resident shareholder in our open meeting last night, asked if a shareholder could exercise "right of first refusal" to prevent extremely low sale prices? I'm not even sure that our by-laws and proprietary lease have this provision for our coop to do so, but I always thought it was just the coop that could exercise this right. Does any coop with experience, know the answer? Our coop is not currently interested in making purchases as we have some large projects on our plate. Could an informal request be made, asking shareholders, looking to sell at low values, to offer to current shareholders first?
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There is no provision for ROFR in the prop lease or by-laws. Would it need to be there or could we do this without having the actual wording? The seller would still be able to make the sale. I do think it makes sense for it to be in the by-laws. We will of course consult the attorney, but I have to provide as much info to my board so they might consider it & why it would be beneficial. Based on other articles I've read here, the Board could designate another shareholder, it seems. I'm trying to make the case for how it will benefit our shareholders, protect property values & how to make it happen. We also want to educate the shareholders on why this is a good idea and if someone is looking to sell quickly & much below current values, then maybe there could be an active list of shareholders, who could be ready to purchase should it come up.
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Check the prop lease and consult a lawyer. But the Board should be able to make a deal with a shareholder to buy the apartment after the Board exercises its right of first refusal. As long as the selling shareholder gets its price, there should not be a problem. (Assuming the Board is not colluding with the buyer to lower the price.)
But the Board should consult an attorney.
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