New York's Cooperative and Condominium Community

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BOARD OPERATIONS

HOW CO-OP/CONDO BOARDS OPERATE

What Should Co-op Boards Expect when Receiving Admission Packages?

Tom Soter in Board Operations on February 5, 2013

New York City

Feb. 5, 2013

The first point on any admissions timeline is, in fact, the least important to the board — and in which it has very little involvement. That is getting the package out to the buyer. The seller or broker will present the building's admissions package to the would-be buyer. Depending on the contract between the buyer and the seller, the buyer can have anywhere from three weeks to three months to complete it. The applicant fills out the forms, provides financial statements and reference letters, and offers financing documents from a lender, including the essential commitment letter.

Vanda Jamison, president of a two-building, 44-unit cooperative in Harlem, says that her board won't even review a package without a commitment letter. "We've learned not to act prematurely," she says. "When we did in the past, we wasted a lot of time [because the loan fell through]."

The Managing Agent's Turn

Delays are where boards

get bad reputations

in the broker community.

According to Annaise Valerio, a transfer agent in the closing department of Rudd Realty, a management firm, this material is then reviewed by the manager. That should take a week, she says. If that review finds that the package needs more — tax returns are missing, financial statements have gaps in them, references are obviously form letters — add more time. The manager returns the package and requests it be returned within another week to ten days.

Until this point, the board has very little involvement in the timeline, although if you hope to encourage sales within your building, you may want to review the status of sales applications with your manager.

One broker says that such a review might reveal that some processing delays are being caused by your agent. If your co-op has a great number of shareholders who are refinancing, then your manager — who usually acts as the transfer agent in refinancings as well as sales — could get backed up, warns broker Bruce Robertson, a senior associate with the Corcoran Group who has also been a board member at his co-op.

Bottleneck Blues 

"Those refinancings are clogging up the system," Robertson observes. "A broker can put together the loan package and get it to the manager. But then they wait. As a broker, I may send an e-mail to the manager, reminding him of the deadline. But he usually says, ‘I'll get to it later. I'll get it back to you next week.' That's where the bottleneck is. You rush it to the board and it's really ‘hurry up and wait.'"

Delays are where boards get bad reputations in the broker community, says broker Jerry Minsky, a senior vice president at Douglas Elliman Real Estate. Ideally, the manager should turn the package around — from buyer to manager to the board within two weeks. Nonetheless, many managers include a disclaimer with their package, saying that the review may take up to 30 days.

For more on the subject, read part two of this article.

 

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