When it comes to co-op board approvals, there is always a high level of anxiety among prospective buyers regardless of how well their credentials may look on paper. A buyer(s) may have the most pristine credit, substantial savings and a seven-figure income, but the board could very well decline them for any reason not protected by local and federal anti-discrimination laws.
A prime example dates back to 1985, when pop superstar and one of the world’s biggest celebrities, Madonna with a net worth of $880 million, was
rejected by the co-op board at the San Remo where she tried to buy a $1.2 million apartment. Later in 2007 she faced rejection again—this time at Harperley Hall, where she was currently living. She had attempted to buy another floor in that same building to expand her existing unit, but
the board did not approve the purchase and was not required to disclose why. And Madonna isn’t the only celebrity who has been turned down—Calvin Klein, Antonio Banderas and Mariah Carey are some other big names rejected over the years.
The absence of transparency from co-op boards has been an ongoing frustration among buyers and with good reason. It’s only natural to want to know why you were not approved so that you can either dispute it or correct whatever prevented you from being approved. So essentially this means that buyers are at the mercy of the co-op board, known for being notoriously selective in New York. However this could very well change in the near future.
New York State Senator Brian Kavanagh is sponsoring a bill that would require co-op boards to provide a written explanation for why they turned down a buyer. Added to this, the board would also be required to provide a clear and accessible application and acceptance policy that lets prospective buyers know of their status within 90 days.
This would be a game changer in NYC real estate, as rejected buyers would be able to make the necessary corrections or changes, increasing their probability of securing an apartment the next time around. From the co-op board’s perspective, the fear is that this change to a law dating back to the 19th century could very well lead to a lawsuit against them if the buyer feels they were discriminated against.
Needless to say, many of us will be watching closely to see if and when the proposed bill passes. In the meantime, please don’t hesitate to reach out with questions or for assistance with any of your real estate needs.
