- Michael Shapot, Esq.
Turn Down Turn Around
The coop Board rejection story from last month's blog generated many comments (or was it my shameless request for birthday greetings?) and raised all sorts of moral, ethical and legal questions. Thank you for sharing your thoughts.
A few follow up comments are in order:
As you may recall from last month's scenario, subsequent to receipt of the Board's one line rejection letter, we modified the contract, tweaked the application and resubmitted the package for reconsideration. Management sat on the application for a couple of weeks, and it took another couple of weeks for the Board to review the package. Finally, the buyers were invited for an interview. Three days post interview, we were notified that the application was approved. Another successful "Turn Down Turn Around"! Sometimes it takes a while, but it is so gratifying when perseverance, patience, collaboration, strategic thinking and flawless execution finally pay off. 2. Turn Down Turn Around - A Deux!
Another scenario = We represented a highly qualified and savvy buyer. During the depths of the pandemic, she recognized and seized the opportunity to purchase a sweet coop apartment at a significant discount, negotiating a killer price for a gem of an apartment. - The due diligence and contract signing had the typical snags, but nothing out of the ordinary. - The loan application process was smooth and the property appraised at the contract price. - We submitted the Board package, and waited. And waited. And waited. After more than eight weeks (!!), management discreetly notified us that the Board intended to reject the application unless the contract price was increased by at least 10%. "After all, such a low price would devalue the other apartments in the building." Really? This was an arm's length transaction with both parties represented by highly experienced and competent agents. And the appraisal came in at the contract price. All parties, lender included, strategized and successfully renegotiated our deal. We amended the contract, modified and resubmitted the Board package, secured an interview for the buyer, received Board approval and closed a couple of weeks ago. Another successful Turn Down Turn Around! 3. Call to Action
I can't take credit, but the NY State Legislature finally woke up to the problem of out-of-control coop Boards. They're again considering a law which will require coops to promptly review packages and provide their reasons for a turn down. According to the bill's sponsor, Senator Brian Kavanagh, "when you are in the business of accepting and rejecting people's desire to purchase a home, some basic level of transparency and predictability in your process should be part of the mix.... I'm looking ... to provide a reasonable standard of fairness in the process for the buyer and seller." And the broker! AMEN Senator!!! I reached out to Senator Kavanagh to help ensure the passage of this bill. Stay tuned on how it proceeds, and let me know if you're onboard.