Real Estate & Property Law
Co-Op Boards in New York Are Turning Down Sales Because of Low Prices
Posted Oct 16, 2012 4:30 AM CST
By Debra Cassens Weiss
House hunters may not be able to get a bargain if they are buying a co-op in New York City, and the reason is not due to market conditions.
Co-op boards are increasingly turning down sales when the price is too low, and court decisions have upheld the practice as a matter of business judgment, the New York Times reports.
Among those observing the uptick is real estate lawyer Aaron Shmulewitz, who told the Times the number is “markedly increasing.” Co-ops account for about 75 percent of the housing for sale in Manhattan, though they are rare elsewhere.
Some brokers are trying to bypass co-op board reticence by upping the sale price and giving a credit for the transfer tax or renovations. Shmulewitz told the newspaper that kind of concession is legal as long as its disclosed in the transaction documents and all the parties agree.
Some banks or co-ops may not approve of such arrangements, however. Some banks, for example, cap seller credits at 6 percent.