Whattayamean, "No"? Co-op Requirements, Rules, and Regulations

Smoking, a purchaser's pets, personal habits, and even cooking with the flair of Emeril are only some of the touchy aspects that a board may take into account when considering a new resident's application for admission into a building these days. The wide variance of co-op and condo rules have elicited the attention of board members, residents, and shareholders, and gaining board approval seems more difficult now than ever for prospective buyers.

Pet Owners in the Doghouse

"Boards seem to be concerned about pets," says Tim Buckley, a broker with Insignia Douglas Elliman in Manhattan. "Many [boards] have just bitten the bullet and said "˜no pets allowed.'" For the most part, says Buckley, when animals are allowed, the pets in question are dogs - cats are less of an issue, unless the building decides not to permit any animals at all.

Buckley recalls one instance where the board actually wanted to meet a potential buyers' dog. Even though the co-op board required a photograph of the dog to accompany the package presented to them, according to Buckley, there had been situations where the photo of a given dog did not match the actual pet.

Tristan Harper, vice-president in residential sales at Insignia Douglas Elliman, observed an instance where the dog's credentials are just as important as its owners.' "The board wanted to verify the dog's educational background," says Harper. The buyers were interested in a prime Fifth Avenue co-op. The seller had a provision in their proprietary lease that her buyers would not have to go through board approval, but there was nothing in the clause about the buyers' pets. Since there was no provision for the dog, the board made the process difficult, requesting to see the dog's certification as a search-and-rescue dog. Search-and-rescue dogs must be admitted everywhere, much the same way as are seeing-eye dogs. The board requested a photograph, proof of certification, an introduction letter describing the dog, and even an interview with the dog's trainer. In all, says Harper, the entire process took three months before it was settled.

Many times, says Harper, prospective pet-owning residents will provide the board with a detailed information packet on their pet without an explicit request for one. This might include letters of reference from neighbors stating that the dog was well-behaved and quiet. Preparing the documentation with more than enough information about the pet can help buyers make a stronger case for the board to allow their pet into the building. Although the search-and-rescue-dog case stands out as peculiar, Harper thinks "most boards try to be reasonable in the end."

Phil Walker, in-house counsel for Insignia Douglas Elliman, recalls another broker's experience, when an anti-pet policy actually worked in the favor of a customer. The buyer had committed to buying a co-op, but changed his mind in the midst of the process. The dilemma: How could he get his deposit returned if he backed out of the sale? The buyer decided to tell the board he owned a large dog, knowing at least one board member wouldn't approve the pet. Sure enough, the potential resident was not accepted, although no explanation was given. Walker points out that, "savvy buyers may use boards' peccadilloes to their advantage."

So What's in Your Sock Drawer?

In early April 2001,when Ryan Fix, a broker for Insignia Douglas Eliman, was in the process of purchasing a condo located "deep in the Lower East Side," he encountered some of those peccadilloes first-hand. The co-op board, which Fix characterizes as "very conservative," hired an independent agency to visit Fix's current apartment. Says Fix, the investigator asked questions and looked around his apartment to observe Fix's current living situation. Although the investigator gave no explanation for the purpose of his visit, Fix believes that the co-op board wanted to make sure his apartment wasn't disorderly or messy, and that he was "normal."

The investigator then took photographs of Fix, the contents of his silverware drawer, and the inside of his bathroom medicine cabinet. Although no reasons or explanations were ever given, Fix passed the test and now lives in the co-op.

Along with in-person interviews, a few boards are going as far as conducting criminal checks. Fix believes that - though odd - his own experience was something the board did in order to keep the co-op community safe.

The Buyer and The Seller

Unusual configurations or conversion situations where apartments are combined also come under the board's purview. The possibility of renting could also be a sticking point. Andrew Kramer, a broker with the Corcoran Group in Manhattan, tells about a buyer purchasing two adjacent apartments being required to assure the building of his plans to combine the apartment before gaining approval to avoid the possibility of his renting one of the units. Requirements to live in an apartment for a period of time before being allowed to sublet are common, preventing a buyer from using the apartment exclusively as a rental property while residing elsewhere.

Rules and regulations are found across the spectrum of building types, not just in luxury buildings, says Kramer. For instance, many boards have a strict policy that forbids open houses or showing apartments on weekends.

Condo sales are not as strictly board-regulated, but there are times when the board will step in and become involved in a sale. In that case, they have the right of first refusal and can void the transaction, he says.

The Board: Reasons for Rules and Regulations

Terry Lewis, the coordinator of the Cooperative Housing Coalition in Washington, D.C., and an employee of the National Cooperative Bank, thinks that in terms of rules, co-ops enforce and create them to varying degrees, both inside and outside New York City. She also believes that buildings go through cycles - being very laissez-faire at one point, enforcing stricter rules when a problem arises, and becoming relaxed again. "It's part of community life," says Lewis, adding that many of the rules a co-op board creates are in place for the benefit of the residents.

Consider the recent example of one Manhattan co-op that decided to ban smoking in common areas and by new residents in their apartments. Regarding the smoking ban at the Lincoln Center co-op, Lewis feels that the shift toward disallowing smoking is merely a reaction to the sociological changes that are occurring across the country. Where smoking in public places was once common, it's been prohibited in more and more places. The co-op board decided to ban smoking in public areas of the building, and took it one step further - they prohibited new residents from smoking in apartments, because shareholders were complaining that they could smell the smoke through their vents.

Says Lewis, "Sometimes it's easier for the board to create a rule than to spend a great deal of money to fix the problem." For instance, once a building is constructed, the amount of noise heard through the floors can't be changed much. So many co-ops have enacted an 80 percent carpet rule, to decrease the amount of noise heard as people walk through their apartments.

"Don't make a rule if you're not going to enforce it," says Lewis, because unenforced rules are useless. She also advises boards to create reasonable rules that can be enforced - restrictions on cooking certain potentially smelly foods and decorating a certain way are often difficult to monitor. Rules that seem more like an invasion of privacy - such as attempting to enforce a "˜no spicy or aromatic cooking' rule - may create undue friction between shareholders/residents and the board. Instead, suggests Lewis, the board may attempt to require that all stoves have adequate ventilation to curb the problem. Conversely, shareholder or resident disputes can shed the light on previously unknown problems. If a board observes the same kind of dispute over and over - and not just once - says Lewis, it may be time to consider enacting a rule.

So take the time to consider any new regulations you're thinking about, as well as any possible alternatives to make life easier for the board and residents alike. Even if you can't make everyone happy, as Lewis says, rules are sometimes, "the best way of coping with a less-than-wonderful situation."

Stephanie Mannino is a freelance real estate writer.

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