Can Your Co-Op Board Set Your Sales Price?

The controlling nature of NYC co-op boards is practically legendary. The New York Times once published an article with some of the more nit-picky rules that NYC apartment boards have imposed, including no long chats with the doorman, no welcome mats or decorations on the front door, and no wearing flip-flops in the lobby. Boards have been known to require copious paperwork for buyer approval, reject applications without explanation, and make renovating darn near impossible. As it turns out, they can also dictate how much you sell your apartment for.

The difference between a co-op and a condo is that, in a co-op, you own stock in the building rather than owning your own apartment, as you would in a condominium. This makes the powers that be much more finicky about what you’re doing that may impact their property values.

Co-op boards do not like to see low sales prices, and have the right to reject a price they don’t find to be in line with the market. In a changing market, a broker’s letter of opinion and a property appraisal may help you argue your case if you feel that the proposed price is reasonable, however board decisions can be tricky to overturn because of the Business Judgment Rule, a precedent that judges or courts will not generally interfere with co-op board decisions.

Your best bet: contact a real estate professional to pull comps and give you a good idea of what your property is worth in today’s market, and stay on good terms with your board.

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