The do's and don'ts of a co-op board interview
Relax. Regardless of which side of the table you're sitting on, the board interview process in New York City co-ops has developed a reputation as being more fraught than it truly is, says Steven Wagner, a co-op and condo attorney with Wagner Berkow LLP and a longtime board member of his own 420-unit Manhattan co-op.
"The reputation of co-op interviews is so bad that people come in dreading it," says Wagner, "But in our building, we always try to make it a pleasant experience."
Below, tips on making the process go as smoothly as possible whether you're the one hoping to land a spot in a new building, or vetting a potential new neighbor.
IF YOU'RE SITTING ON THE BOARD:
DO: Take care of background research before the inteview, and prepare to asked pointed questions about money.
When it comes to sussing out a potential new shareholder, preparation is key. "Besides a credit check and background check, I look closely at the application to see if the numbers all add up, and if there's anything off about the financials," says Wagner. "And I try to see whether the person has any litigation issues, repeated bankruptcies, large judgements against them, things like that."
One thing to watch for is if the buyer has combined their personal assets with those of outside entities (such as corporations or LLCs). "We ask about that, since it's money the person is including in their net worth, but it's not in their bank account," says Wagner.
Having a large amount of money tied up overseas is also something to inquire about. "We had one case where a very fancy woman got flustered and offended when we asked about her money overseas," says Wagner. "But that's what we're supposed to do. The broker had prepared the application and made it look like she had tons of money everywhere, but when you looked carefully, it didn't match any of the financial information they were providing."
Bottom line with money issues, says Wagner, is that "This is all fair game in interviews," and the board should be prepared to ask the tough questions where necessary.
DON'T: Ask questions that violate fair housing laws.
You probably already know that the Fair Housing Act stipulates that you can't discriminate against a prospective buyer based on race, age, religion, national origin, sexual orientation, marital status, or the nature of their family arrangement.
This also means you need to tread lightly and avoid asking anything that could land your board in legal hot water. For instance, says Wagner, "You can ask who will be occupying the apartment, but you can't discriminate based on whether or not a person has children."
DO: Make more casual chit chat
"Right from the start, we try to welcome the person and put them at ease in the interview," says Wagner. "I usually want to find out what drew them to the neighborhood."
More casual, friendly conversation can also facilitate an interviewee answering questions more openly, he notes. "I don't have to be crazy about the person, but I do want to find out whether they're a responsible adult who will be an active member of the community, or if they're just looking for an investment, won't be around, and may possibly try to break building rules," Wagner explains.
DON'T: Assume the interviewee already knows all the building policies
"The interview isn't just about asking questions, it's also about providing information to the buyer," says Wagner.
Wagner recommends asking if the buyer is planning on doing any work in the unit, and taking this as an opportunity to review the alteration policies. Similarly, he suggests asking about any plans to sublet, and reviewing policies on sublets and short-term rental services such as Airbnb.
"We take the time to explain building policies, and how to make a complaint if there's a problem, and anything they need to know if there's an assessment," says Wagner. Your building wants to go into the deal with as much information as possible, and the board should extend that same courtesy to the buyer.
IF YOU'RE THE ONE BEING INTERVIEWED:
DO: Feel free to ask questions, but prepare ahead of time, too
"Usually, a buyer will be invited to ask questions, though most don't, since they pretty much know about the building and what life will be like," says Wagner. "That's why they want to buy in."
Still, says Wagner, some buyers will ask about procedural things, such as how laundry works in the building, or whether they can install a washer/dryer in their apartment. As long as you don't go overboard with your inquisition, you should be fine. "If a person comes in with their checklist of 55 questions they need addressed, that usually doesn't create a great impression," he says.
DON'T: Beat around the bush.
Even when you're trying to make the best impression possible, honesty is the best policy. "If there are any unusual aspects of your application, particularly financial, it's not only appropriate to discuss it in the interview, but as an interviewee, you should expect it," says Wagner.
For instance, if you're nearing retirement, be ready to explain how you plan to pay for the apartment once you leave the workforce. "Try to get it out in the open, don't hide it," says Wagner.
"We had someone come close to blowing it on this front," says Wagner. "She was buying for her sister, who was very sweet, but kept saying things that contradicted the applications, and mixed the assets of her company with her personal assets. She was lying through her teeth."
Ultimately, the deal went through since the person actually residing in the apartment was agreeable (and the financials ended up working out), but it's a cautionary tale as to the importance of a straightforward interview approach. After all, if things go to plan, you're going to be living with these people—why start off the relationship based on a lie?
New York City real estate attorney Steven Wagner is a founding partner of Wagner, Berkow, & Brandt, with more than 30 years of experience representing co-ops, condos, as well as individual owners and shareholders. To submit a question for this column, click here. To arrange a free 15-minute telephone consultation, send Steve an email or call 646-780-7272.
Related:
Buying pre-construction? What to look out for in the offering plan
What's smarter for a New York apartment building: self-management, or bringing in a third party?
Landlord wants to buy you out of your apartment lease? How to name your price
What are the most common lies told by real estate agents?
What disclosures and clauses should go into the contract when you're buying an apartment in NYC?
Got a toxic board member in your building? Here's how to handle it
How do I buy a co-op or condo under an LLC?
How to tell if your property manager is taking kickbacks—and what to do about it
How to keep your co-op and condo neighbors from renting out their apartments on Airbnb
