How Co-op Boards Can Avoid Undue Delays with Admission Packages
Feb. 14, 2013 — Once a buyer's package has been greenlighted by the manager's transfer department, it is delivered to the co-op admissions committee and, absent that, the board itself. (In self-managed buildings, it is up to the seller to manage all the logistics, including hiring a lawyer as transfer agent.) A copy of each package is distributed to every board member, with confidential information, such as the social security number, redacted. Some distribute this data electronically. The admissions committee should spend a week to ten days before giving their recommendation to the co-op board.
The board review, says broker Miriam Sirota, a senior vice president with Brown Harris Stevens, should take about two weeks; however, some take up to three-and-a-half weeks.
The board review should
take about two weeks.
"I don't think boards are being malicious [in delaying]," she notes. "They are, after all, volunteers and very busy. But board members need to understand that these are people's lives they are dealing with, and some of the sellers are selling because of financial need, or buyers have to be out of their apartment by a certain day, or a loan commitment will expire. Boards don't always think about these things, but they've got to make the review of the package a priority."
"We try to make it clear to boards that delays can be fatal to a deal," explains Fred Rudd, president of Rudd Realty. Boards should understand this and try to be reasonably accommodating to the buyer.
Being Up to the Challenges
Such accommodation can lead to challenge, however. Bruce Robertson, a senior associate with the Corcoran Group who has also been a board member at his co-op, cites an example. "We had a buyer who had to be out of his rental by December 31. It was rough, and we really had a lot of obstacles to overcome. We lost two weeks because of [superstorm] Sandy — the managing agent had lost power for two weeks, so they were out of commission. Then there was Christmas and the holidays, which caused more delays. But we got some board members together and managed to pull it off. We approved them and they could move in on time and not have to pay two months extra rent on the apartment they were leaving."
For all that, however, some boards don't like to be rushed, saying that it is their duty to move with deliberate speed, insisting that would-be buyers get their applications in within a week of the regularly scheduled board meeting, so that the directors have time to review it and then discuss it. If the buyer misses that deadline, he or she has to wait — possibly a full month (or two, if it is the summer when meetings are less frequent) for the next meeting.
Remembering What It's All About
Whatever procedure they follow, co-op boards can keep on track by creating a schedule and remembering what the whole process is about. At the end of the day, says broker Jerry Minsky, a senior vice president at Douglas Elliman Real Estate, the savvy board understands that it should be conscientious but accommodating, and remember that this is, after all, about finding the right neighbor — and making a sale.
"Boards have to follow the rules," he concludes. "They should be considerate of their buyers and remember that, through their actions, a real estate deal can fall apart at any time."
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