Many condominiums have a similar application process. However, the big difference between the two boards is a co-op can reject an applicant without giving a reason, forcing the seller to find someone else. If a condo rejects an applicant, the building must agree to purchase the apartment on the same terms — an option that is seldom exercised, so the approval process is more of a formality.
Rejections don’t happen often because brokers vet buyers’ financial qualifications before submitting an offer and will advise buyers to avoid an application process that is unlikely to go well. Once you get to that stage, here is what the typical board application package includes:
Application and Cover Letter
After your offer has been “accepted,” the building or selling agent will send you an application requesting your current information (ie. address, employment history, finances, any litigation involvement). This document will list the information you will have to submit and forms to sign, such as a lead-based paint disclosure form.
You will also be expected to write a cover letter introducing yourself and explaining why you believe you would be a good fit for the building (your real estate agent can assist you with this). Make sure you present yourself as a prospective purchaser and do not assume you will be approved. Your agent will help you organize the package, number it, and make multiple copies to submit once complete. This way the board members have no issues finding the information.
Most importantly, you need to have your financial statement in tip-top shape. Summarize your assets, liabilities, income, and expenses. Your bank and brokerage accounts, car loans, mortgages, your salary and bonuses, the value of cars, school debts, child support, life insurance, etc. will have to be included.
You will also need ORIGINAL supporting documents for everything on your financial statement – for example, pay stubs, art appraisals, and retirement account statements. DON’T LEAVE OUT ANY PAGES. All of the numbers need to match your summary. Don’t leave out a thing and use exact numbers because the board will scrutinize this document.
Personal and Professional Reference Letters
A board usually likes to see two to four personal letters vouching for your character as a friend and/or potential neighbor, along with two to four professional references addressing your integrity in business dealings. You will also need a financial reference from an accountant, portfolio manager or bank representative speaking highly of your financial responsibility.
We suggest having the personal reference writers give a sense of your interests and family life. For example, “We knew each other in college and were on the football team,’ or ‘We vacation together every year.”
The reference letters should talk about the relationship and be written by New Yorkers on professional stationary. You MUST have the ORIGINAL letters sent. If you reside in New York and none of your letters are coming from people in the city, they are going to raise an eyebrow at your application.
Usually a credit and criminal background check will be completed to see if you may be hiding anything that might be undesirable as a neighbor. In the past, buildings have spent $3,000 per applicant to have an agency do the research to look at a person’s past with a fine-tooth comb.
If there is a question at hand, such as a criminal conviction, lawsuit or bankruptcy, disclose the issue to the board and what happened. If you hide it and they find out, the board will think it’s worse than it is.
If you are on social media and have some silly things in cyber space, take time to delete anything the board would not appreciate.
Being asked to the interview is exciting! Don’t be nervous because if they weren’t interested in you, they wouldn’t have asked you to meet with them. The less you say, the better. Just listen to the questions they ask and give them straightforward answers.
Some typical questions include:
- Will this be a primary residence?
- Who will be residing with you?
- Do you play any musical instruments?
- Do you host parties often?
- Do you plan on doing any updates or renovations?
- Do you have pets?
Most boards are pet-friendly and they don’t ask to meet pets. Some applicants will submit a reference letter for his/her pet or a certificate from a class stating that they are well behaved and trained.
Another common question is would you be willing to serve on the co-op board. If you are applying to a small board, they often need active people. If you are not willing to help, that could be a negative.
Boards are not supposed to ask about marital status, race, religion or sexual orientation. If they do, this could open up a building to a discrimination lawsuit if you were turned down.