Michael Gwertzman in Board Operations on July 29, 2014
For time-stretched boards that don't have a dedicated individual, one option is to make the buyer and seller responsible for wrangling the paperwork. In that case, each seller must get all the necessary forms to the buyer. The buyer fills them out and returns them to a representative board member, who then reviews them. If they're complete, the buyer must make the necessary copies and distribute them to the rest of board.
Show Me the Money
The main admissions criteria should be the money picture: does the applicant have enough in the bank to keep up with his financial obligations? Basing a rejection for any other reason can open up the door to a potential discrimination lawsuit brought against the board. If, upon reviewing the data, it appears likely that the prospective buyer won't be admitted by the co-op, the best practice is to simply not interview the candidate.
If a candidate has cleared all the financial hurdles and if the references check out, the last steps are to interview the prospective shareholder and vote. Based on the above practices, it's fairly unlikely that a candidate would be rejected at this final stage.
But co-op boards still need to be careful in the interview. Don't ask questions that appear to be discriminatory: i.e., nothing about a candidate's nationality, skin color, race, age, marital status or disability, among other federally or locally "protected classes." (See Habitat article "Did You Know? Boards' Powers Are Limited in Cases of 'Protected Classes'")
Best Use of Interview
Boards should use the interview as an opportunity to educate the prospective buyer about what is expected as a shareholder in a self-managed building. If residents are responsible for clean-up or other tasks, make sure the buyer is aware of what he or she is going to be asked to do. Tell the interviewee about any particular house rule that he or she should be aware of. And if the board has any worries or concerns, now is the time to voice them.
Adapted from "Let 'Em In?" by Michael Gwertzman, Habitat October 2003
Illustration by Marcellus Hall. Click to enlarge.
Co-op and condo board business broken down into bite-sized bits - 2 stories each week. Read now on all digital devices.
A free digital resource for co-op/condo board directors. Published twice a month. Read now on all digital devices.