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Hi Everyone,
Our board just rejected an applicant. The shareholder's attorney contacted the board asking for a reason for the rejection and requesting the board interview the applicant. I know the board does not have to reveal a reason for rejection and we have no intention of doing that or in meeting with a rejected applicant. I am wondering what is the best next step. What kind, if any, communication should be sent in response to the attorney? Thanks in advance for your assistance.
We too have rejected applications and did not then proceed with an interview. If challenged, we also do not offer any reason; not required. Having said this, we will issue a 'non-acceptance' letter upon request that reads like this (in form and substance):
(On co-op letterhead/date/to...)
As requested, this is a non-
acceptance letter in connection
with the sale/resale of co-op shares
vs. Apt. X at above address.
Please be advised that the Board of
Directors of X has not approved the
purchase application referenced above.
Sincerely,
(Name of Co-op)
(Authorized signature, i.e. President)
Have your co-op lawyer write the letter. Not only does that insulate you a little more, it means your attorney is on-board from the beginning in case the applicant become litigious.
Your coop should, by now, have developed form letters to respond to situations such as these... "our board does not disclose reasons for rejection, and the law does not require us to do so," blah blah blah.
Having a co-op lawyer formulate individual letters can add up to expensive (and unnecessary) bills.
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We have never disclosed the reason for a rejection.
We never interviewed a rejected applicant again.
We have never accepted "paperwork" for a rejected applicant for a second go-around.
All interaction is with our attorney, so there is never a “slip of the tongue”.
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