Buying an apartment in New York City isn’t just a matter of finding the right unit and qualifying for a mortgage. In the case of a co-op, it’s also a matter of passing muster with the board. And even for a condominium world today, prospective buyers still have to jump through hoops in order to secure the board’s approval of their purchase. Though boards have the final say, they also must be careful not to cross lines into discriminatory practices when defining the requirements and standards to which they hold prospective purchasers.
For buyers, the first step in gaining approval for their purchase is completing what has become known as the ‘board package,’ which is an application submitted to the co-op board for their review. It can include many items—among them are financial and personal data, and reference letters from both friends and business associates. The board’s review of this information is generally followed up by an in-person interview.
“Usually, a resale application is submitted to the managing agent’s closing department for board review,” says Jennilee De Leon, an account executive with Sacks Real Estate Management Corp., in New York City. “Financial and personal information is included.”
Board packages can be quite lengthy. Larry Lubin, a broker with Manhattan-based Klara Madlin Real Estate, describes one package he is working with that has 11 different requirements, including: a formal application form; a financial information form; credit and background checks; two years of state, federal and local tax returns with W2 or 1099 forms; an employer letter confirming salary and terms of employment; personal references; business references; references from the current co-op board or landlord; pay stubs; and three most recent bank statements. “Exact requirements may differ slightly from building to building,” he says, “but the bulk of the items listed above are typical of most co-op applications.”
When considering an applicant, boards are primarily looking at the purchaser’s financial ability to buy the apartment and cover the monthly carrying costs. While they may consider certain non-financial criteria — such as the personal recommendations of friends and business associates — they must be very careful not to make decisions that could be considered discriminatory (That will be discussed later in this article).