The Co-Op Board Interview (Commence Crying)

Far and away, the most exhausting and stressful portion of any co-op purchase in Park Slope, or anywhere else for that matter, is the board interview. And for good reason. Boards are notoriously fickle when it comes to whom they let in to their building. Why? Let's discuss the two main reasons:

1. "Who the hell are you?"

Ever see the Real World on MTV (back in the day, before the Las Vegas ones—I'm so old)? The basic premise is: "Twelve people picked to live in a house. Find out what happens when people stop being polite, and start getting real." It's kind of like that. The co-op board, which is comprised of people who live in the actual building itself, want to know who you are. The building can be thought of as a relatively small community. So, the co-op board wants to see whether or not you'd "fit in" to that.

Now, they can't discriminate based on race, sex, gender, sexual orientation, etc., but if they find that you're just not their type (have heard this too many times to count...sigh...) they can reject your application.

How do they know who you are? They set up a meeting where you appear. They ask you questions. Find out more about you. And make a decision thereafter.  

2. "How much money you got?"

Remember that huge real estate issue we had just a few years back? You know who made out surprisingly well? Co-ops. Yup. And they did it because of the distinctions between buying a home and buying a co-op.

When my grandmother (who is 93 now and who my mom claims is immortal) was getting offers for mortgages and when the general population were buying homes with 105% financing, co-ops still mandated that you put down 20% cash (your own) in order to close.

That meant that more people who had money in the bank and were financially sound were buying co-ops. And it meant less problems down the road. A co-op is going to want to make sure you "got money in the bank" as one of my favorite rappers, Lil' Scrappy, would say.  

They want to know that you are financially sound. They'll require bank statements, tax returns, assets, liabilities and personal financial worksheets. Is it sometimes hell? Sure. Is it worth it in the long run? I think so, given what we have seen recently. 

The interview is something you should be prepared for, but not scared of. Most of my clients (and this has nothing to do with me) pass just fine. The ones that don't, simply move on.  

A word of caution: If you are rejected, don't necessarily think that you will simply be able to sue and get it "overturned." Courts are notoriously reluctant to get involved with co-op decisions. Co-ops, unlike condos or houses, are actually corporations, and therefore are governed by something called the "Business Judgment Rule." Simply put, it's going to be tough to sue the co-op and win in many instances.

As always, I'm here if you have any questions at all.