Classifying Bedrooms: The Power Of Coop Boards To Approve

Co-op boards have a lot of power when it comes to approving buyers and their applications. They can reject buyers without giving a reason, and they scrutinize the buyer's financials, work history, and personal life. Co-op boards typically want six months to two years of maintenance and liquidity after closing, and they look at whether the buyer has recently switched jobs or has a lot of credit card debt. The buyer must also submit a detailed board package, which includes a cover letter, financial statements, tax returns, and reference letters. The board may also conduct credit and criminal background checks. While rejections are rare, they can happen if the buyer doesn't meet the board's financial requirements or if there are red flags in the buyer's application. It is important for buyers to be prepared for the board interview and to treat it like a job interview. Overall, getting approved by a co-op board can be a challenging process, but it is possible if the buyer is well-prepared and a good fit for the building.

Co-op boards and their powers

Co-op boards have a lot of power when it comes to deciding who can buy into the co-op and who can't. They are responsible for governing the community and have authority over different aspects of how the building or association is run. While the shareholder or unit owner rules within the walls of their unit, everything beyond that falls under the co-op board's jurisdiction.

Co-op boards have approval rights over almost everything, particularly if it involves any kind of alteration work. They can reject buyers without giving a reason, and they don't have to disclose why they rejected applicants. However, this may be changing as there is a bill in committee that would require co-ops to disclose why they rejected an applicant to protect from illegal discrimination.

Co-op boards are particularly interested in a buyer's financials, work history, and personal life. They will look at a buyer's current and past income, credit history, and intended use of the unit. They also prefer buyers with a stable work history and are less likely to approve freelancers or buyers who frequently change jobs.

Co-op boards also have the power to approve or reject renovation plans. They can impose daily penalties and fines for work that is not completed in accordance with building policy or if the project runs long. They can even halt a project indefinitely if rules are broken.

Co-op vs condo: Who's in charge?

When it comes to co-ops and condos, there are distinct differences in terms of who's in charge.

Co-ops

Co-op owners don't own their apartments in the traditional sense of having a deed to a piece of real property. Instead, they own shares in a cooperative corporation that owns the building in which their apartment is located. They are issued a proprietary lease for their unit by the corporation. Co-op boards have approval rights over almost everything—particularly if it involves any kind of alteration work. Co-op boards are notoriously stringent in who's allowed to buy, often requiring background checks, referrals, and other personal information. They can also turn down a buyer based on any number of reasons, even if they have the cash to pay.

Condos

Condo owners, on the other hand, own their property outright. They own the unit itself and a percentage of the common areas. Condo associations, which are similar to HOAs, set and maintain community guidelines, but ultimately, condo owners have the freedom of a traditional homeowner, like the ability to renovate. Condo associations rarely have rules against subletting because the unit is the owner's property.

The role of the board president

A good board president should be a servant-leader, driven by the desire to serve the board, the co-op, and the community. They should have strong people skills, management skills, and a willingness to develop a deep understanding of the co-op's business.

• Be familiar with the co-op's history, culture, and industry.
• Have a vision for the board and the co-op, and channel the board's time and energy towards productive work.
• Understand the strengths and styles of the directors and encourage their participation and growth.
• Be organized and prepare detailed agendas and materials for board meetings.
• Foster a positive working relationship with the general manager.
• Stay centered and listen actively to all ideas, accepting that people will have different opinions.
• Be approachable and welcoming to all, acting as an ambassador for the board.
• Be willing to serve the needs of the group and dedicate themselves to effective group process.

The board president has a fiduciary responsibility to make good financial decisions, ensure the co-op fulfills its objectives, and set it up for future success.

Co-op boards and their approval rights

Co-op boards have a lot of power when it comes to approving buyers, and they can reject applicants without giving a reason. However, there are some common requirements that most co-op boards look for when deciding whether to approve a buyer. Here are the key areas that co-op boards focus on and some tips on how to get approved:

Financials

Co-op boards typically want to see that buyers have sufficient assets and a stable work history. They will look at your income, liquid assets, credit history, and debt. Most co-op boards will ask for detailed financial information, including employment history, tax returns, bank and brokerage accounts, mortgages, salary, bonuses, and any outstanding credit card debt. It's important to be transparent and honest about your financial situation, as co-op boards will scrutinize your financials closely.

Personal History and References

In addition to financial information, co-op boards will also want to know about your personal history. They may ask about any arrests or lawsuits you've been involved in. They will also require reference letters, both personal and professional. If you're buying as a couple, each person will usually need to provide separate letters. The letters should include details about your interests, family life, and how long the reference writer has known you. It's a good idea to have references from people who live in New York, as local references carry more weight.

Interview

The board interview is a crucial step in the approval process. Treat it like a job interview and dress respectfully. Be prepared to answer questions about your intended use of the unit, renovations, pets, and whether you're willing to serve on the co-op board. Be respectful, honest, and transparent during the interview, as this will increase your chances of getting approved.

Choosing the Right Building

Working with an experienced real estate agent who knows the buildings and their requirements is essential. They can help match you with the right building and guide you through the application process. An experienced agent will know which buildings are more lenient and which are more strict, so you can focus your search on co-ops that are a good fit for your situation.

Following Building Guidelines

Each co-op building has its own guidelines and house rules, so it's critical to understand these before submitting your application. Be prepared to address any questions or concerns from the board and be responsive to their requests. It's also important to monitor the progress of your renovation and stay in communication with the board and property manager.

In conclusion, getting approved by a co-op board can be a complex and rigorous process, but with careful preparation and the right guidance, it is achievable. By demonstrating financial stability, a strong work history, and a commitment to being a good neighbor, you can increase your chances of getting approved by a co-op board and securing your dream home.

Co-op boards and their interview process

Co-op boards are an integral part of the cooperative housing model, where residents collectively own shares of the corporation that owns the apartment building. The board is responsible for managing the building, screening and approving new members, and enforcing house rules. Joining a co-op typically involves an interview process, which can be daunting for prospective residents. Here's an overview of the co-op board interview process and some tips for navigating it successfully:

The Co-op Board Interview:

• Purpose: The co-op board interview is a crucial step in the approval process for prospective residents. The board aims to determine if the candidate is a suitable fit for the community and can comply with financial and community regulations.
• Timing: The interview usually takes place after a candidate has submitted their co-op purchase application and received conditional approval. It's the board's final opportunity to assess the candidate in person before making a decision.
• Preparation: Prospective residents should prepare for the interview by familiarizing themselves with their application, financials, and the co-op's rules and regulations. It's essential to be punctual, presentable, and ready to answer personal questions confidently and succinctly.
• Interview Format: Interviews may be conducted in-person or virtually, depending on the board's preference and convenience. Virtual interviews have become more common due to the pandemic.
• Interview Questions: Co-op board interviews typically cover a range of topics, including the candidate's finances, background, job security, hobbies, social habits, and intended use of the unit. It's important to provide honest and concise answers without oversharing.
• Dress Code: While there's no need to impress the board with extravagant fashion choices, it's essential to dress appropriately and avoid overly casual or flashy attire. A business casual outfit is generally a safe choice.
• Renovation Plans: Avoid discussing any extensive renovation plans during the interview. While shareholders have the right to renovate their apartments, bringing this up during the interview may create a negative impression, as it shows poor judgment and creates extra work for the board.
• Asking Questions: It's generally not advisable to ask many questions during the interview. The focus should be on providing the board with the information they need to make an informed decision. Asking too many questions may be seen as demanding or arrogant.
• Interview Rejection: Co-op boards have the discretion to reject applicants without providing specific reasons. However, rejection is often related to financial instability, unstable work history, or a mismatch with the community's values and regulations.

Tips for a Successful Interview:

• Know Your Finances: Ensure your financials are in order, including income, assets, credit history, and liquid assets. Be prepared to discuss your financial situation confidently and address any potential concerns.
• Stable Work History: Co-op boards favor candidates with stable and consistent job histories. If you have frequent job changes or are self-employed, be prepared to explain your situation and provide proof of financial stability.
• Intended Use of the Unit: Be transparent about how you intend to use the unit. If you plan to live there long-term, emphasize your commitment to the community. If you're seeking a pied-a-terre or investment property, be aware that some boards may not approve of these intentions.
• Family Size: In co-op communities, larger families may be perceived as causing more wear and tear on the building and increasing service demands. Consider the size of your family and how it may impact your application.
• Avoid Guarantors: Using a guarantor is generally not advantageous. It creates additional work for the board and may raise questions about your financial stability.
• Pet Ownership: Be honest about pet ownership, as many co-ops have restrictions or policies regarding pets. Avoid pushing the envelope, especially if you have multiple pets or large, loud animals.
• Appearance and Demeanor: Present yourself professionally and respectfully. Avoid excessive jewelry or flashy clothing. Be punctual, polite, and concise in your answers, demonstrating that you're a normal and well-adjusted individual.
• Avoid Renovation Discussions: Do not discuss renovation plans during the interview. While you have the right to renovate as a shareholder, bringing this up prematurely may create a negative impression and suggest poor judgment.
• Honesty and Transparency: Throughout the interview, maintain honesty and transparency. Co-op boards value candidates who are forthright and provide clear answers without oversharing or attempting to conceal information.
• Respect the Board's Time: Remember that board members are volunteers with their own busy lives. Keep your answers concise, and don't prolong the interview unnecessarily. Show respect for their time and appreciate their role in maintaining the community.

Frequently asked questions