In New York, co-ops outnumber condos, and as such, constructing and maintaining relationships with boards and other tenants is integral in sustaining a business. Prior to purchase, a buyer needs to obtain approval from the bank, produce a substantial down payment, be amenable to house rules, restrictions on gifting shares to family members, and restrictions on subleasing. For this reason, it is not uncommon for a board to reject a buyer with impeccable financials and credit if they foresee these situations arising. In a market with so many qualified buyers and investors, the reality is that the board can typically afford to be picky. Hiring specialized help can make a world of difference.
A mistake all too common in New York is using a friend or family member who handles real estate law in other areas outside of New York City. As a potential co-op buyer, understanding the process, potential pitfalls, and restrictions with the help of an experienced New York City attorney prior to purchase is key. Although each co-op has its own set of rules for owners and tenants, there are things every potential owner should know. For example, each board member has fiduciary responsibilities, or in other words, has a duty of care and loyalty; as such, if the board decides that a buyer is not a good fit for the co-op, they have a right to refuse sale of the unit/property.
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