Author Topic: Have you been turned down by a co-op?  (Read 2618 times)

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Have you been turned down by a co-op?
« on: May 30, 2008, 12:22:27 AM »
[Moved to a new topic -- The moderators]

Have you ever been turned Down by a Coop Board of Directors? 

You gave your landlord notice and the sellers may have either moved out or put a deposit on another property.  You anxiously await what is a slam dunk.  The Board of Directors or the admissions committee smiled and while some of the questions seemed a bit intrusive you overcame and answer all of their questions honestly.  You get a call from your lawyer or broker and hear the worst most frustrating news...REJECTED.  The broker, the seller and purchaser are all confused because they know the seller was qualified over and above the Buildings minimum requirement.  A board turn down is frustrating and not just for the buyer but every single person involved.  Seller, buyer, broker, cooperating agents, banks and lawyers find themselves scratching their heads.

Why did you get turned down.  A lot of times is your finances.  A great looking W-2, 1099 or 1040 doesn't tell the whole story.  How long have you been employed, what is your base salary, how much of it is bonus based? How much money will you have available or liquid after you close?  Will it be sufficient to cover 3, 6, 9 months or even 12 months of maintenance and mortgage payments?   Do your finances reflect new money or are you old / seasoned money?   How do you make your money?  Are you professional or are you someone who owns a bodega or anything that may not gain the Board of Directors  admiration?

Maybe you felt that you would go to the Board interview with the sexiest jeans in your closet instead of dressing in a manner that showed respect to your interviewers.  Possibly you were late and gave no believeable excuse about your tardiness.  Maybe you simply felt that you looked great on paper and this was a mere formality?  Did your agent tried to coach you or maybe you told her / him that it was unnecessary?  This and many similar reasons can get you turned down.  Yes, you qualified on paper but the paper qualification merely opens the door for the real qualification drama, the Board interview.  The fact is that if you didn't qualify you wouldn't have even been given an interview.

What is this madness that can allow a Coop Board to simply say no to a well qualified buyer.  In this great country of ours, how can this be?  Well under New York law, a Cooperative Board is under no obligation  to tell why an applicant was rejected. This is called the Business Judgment Rule and Courts have given total  discretion to the Board of Directors of Coops to decide who gets the privilege of being their neighbor. The  Board decided or in their “business judgment” you, the buyer, are undesirable and the courts will rarely second guess the Board decision.  In fact most individuals will not file a complaint even if they feel there was some sort of unfair standard held against them or they were a victim of discrimination. 

The Board can turned you down due to this law as long as the reason is not based on discrimination. Since Boards are not required to reveal the reason you were turned down you may just have to make them. If you feel in your heart and have evidence you can challenge a Board rejection.  Remember the questions you were asked---what is your marriage status, where is your husband, where is your daughter's father.  Other questions that point to the protected classes are all revelant. 

Listen closely, listen carefully to the questions!.  No matter how nicely put or how many smiles you see in the room, don't be fooled.  You have a beautiful accent, where were you born?  You have a beautiful tan, is that natural or do you use a tanning bed?  Where did you get that beautiful star of David, are you Jewish?   Remember, you are looking for evidence of discriminatory questions asked at the Board interview.  Many of these Boards are seasoned interviewers and can tailor a question that will amaze you. 

Many Board members have never held a position of power or vast responsibility (beside being a member of a board) and abuse their positions.  Most boards now a days are fair, efficient and sincerely want the best shareholders possible as neighbors, wouldn't you?  Serving in boards is a thankless job that is often overlooked by it's shareholders, I should know.  Still, there is plenty of prejudices out there and if you have evidence that you were a victim of prejudices or racism file a complaint with the US Department of Housing & Urban Development (HUD) and the Human Rights Commission. You may not need an attorney but I will strongly suggest you get one. 

At the hearing, the 1st questions that will be asked is "Why were these buyer's rejected?  Now the Board has to give the reason, here and now. Now you've put them in a very difficult position and they have to come clean or perjure themselves. After the hearing a notification is sent to you and your lawyer disclosing whether there was discrimination in your case. Don't expect damages to be awarded but with this in hand you can take the case to court.  You can have your lawyer negotiate whether you want to force them to allow you in the building and maybe force some of the Board Members out of their position or just hit them were it would hurt hardest, In their pocket.   At this point, is really up to you and your attorney how you would like to settle
« Last Edit: May 30, 2008, 12:55:58 PM by toddg »
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Have you been turned down by a co-op?
« on: May 30, 2008, 12:22:27 AM »