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Should a Shareholder Broker Sales in the Co-op?

New York City

Shareholder/broker, apartment sales, conflict of interest, co-op board.

Bad idea: a shareholder who brokers sales in the building and sits on the co-op board.

Feb. 24, 2020

Dean Feldman is a shareholder in the Schwab House co-op on the Upper West Side. He’s also an associate broker at Halstead, and since moving into Schwab House 30 years ago he has brokered some 300 apartment sales in the building. This arrangement is not unheard-of, and it has its proponents. But experts agree that a line needs to be drawn: a shareholder brokering sales in the building should not sit on the co-op board. The appearance of a conflict of interest is inevitable, and an actual conflict is not unlikely – even if the broker on the board recuses him or herself from voting on purchase applications resulting from his or her listings. 

But if the shareholder/broker does not sit on the board, Jane Greenberg tells the New York Times, “using a broker who lives in the building has a ridiculous number of positive results for both sides – buyers and sellers.” Greenberg, an agent at Halstead, has brokered some three dozen transactions in her 90-unit Greenwich Village co-op. “Moving is an incredibly traumatic experience,” she says. “If you can take any of the difficulty off the table with your competence, you have done your client an enormous favor.” 

Greenberg cites the example of a prospective buyer’s obligatory interview with the co-op board, which fits most buyers’ definition of “incredibly traumatic experience.” She knows the names of everyone on her building’s board and can clue supplicants in to the full cast of characters who will be at the gathering. “I can tell them, ‘So-and-so is the board chairman, and he renovated his apartment when he moved in, so don’t be shy about saying you intend to renovate yours,’” she says. 

Not all co-op shareholders who work as brokers agree. “I do not seek out listings in my building, and that’s a conscious decision,” says Lisa Chajet, an associate broker at Warburg Realty, who lives in a prewar co-op on the Upper West Side. “I just sold something where I took over the listing from a broker who lived in the same building as the seller. There were two apartments in the same line, and my client felt the broker was pitting one apartment against the other.”

Buyers are advised to exercise due diligence – researching previous deals the broker has done in the building, asking for a marketing plan and interviewing a few agents from outside the building.

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