Bruce Robertson. One in an occasional series of real-life stories by board members about serving on co-op and condo boards. in Board Operations on July 3, 2012
I reply with a standard retort: "Every co-op scrutinizes purchase applications carefully, and it takes time to get through the hurdles to the home stretch. It's a long chain of events that occurs everywhere, and has been especially arduous during the past three years."
To rush the process is taking a risk that our co-op board won't tolerate because of its responsibility to the shareholders. New shareholders appreciate this fact once they're in, but typically balk at it before — especially when the rate lock on their mortgage commitment is set to expire soon, and the board has not met to review their application.
Because they often spend weeks gathering and compiling financial documents, getting multiple personal and business letters of recommendation, wading through bank commitment forms and Aztec agreements, prospective buyers and their agents are impatient with the time it takes for managing agents to process their weighty board package, frequently three to four inches thick.
"Can't you put in a good word to move this along?" is what I'm regularly asked by fellow agents who are anxiously awaiting the next board meeting — having just missed the last one by a day. Meanwhile, the transfer agent at our management company is busily wading through the documents, including credit reports and an appraisal, so as to present it in a palatable form to the board of directors. I explain: "Transfers are an additional duty of management companies for which they charge a flat processing fee in addition to doing the same for processing loan refinancing paperwork on a day-to-day basis. It all takes time."
This is a good thing.
Everyone should understand that one of the reasons Manhattan co-ops have been a solid investment is that the majority of residential properties are cooperatives whose boards scrutinize their transfers thoroughly and take their fiduciary duty seriously.
Despite what I've just said, it would behoove co-op directors to revisit their transfer process to streamline it as much as possible. For instance, in my building the bylaws say that an e-mail vote on a transfer is not allowed. That might be worth reconsidering since it's hard to get a quorum of directors together in any given week. To the contrary, approving a new shareholder is a major duty for directors to take seriously and should not be rushed. In this increasingly hurried and harried business environment, certain protocols and procedures might need to be updated.
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