Home Selling in New York>Question Details

Bklyn Girl, Home Seller in New York, NY

We want to sell a HDFC coop to someone in the family. The agreement give the coop right of first refusal. Can they force us to sell to them instead?

Asked by Bklyn Girl, New York, NY Thu Jul 26, 2012

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A co-op Board always has the right to turn someone down. If your family member qualifies on income, DTI and credit, they should be approved.
1 vote Thank Flag Link Thu Jul 26, 2012
What I need to know is does this clause mean that if they want to buy it back from me not allowing me to sell to family can they force me to do that?
Flag Thu Jul 26, 2012
HDFC coops like most coops usually have board approval not right of first refusal although it is possible for a coop to have "right of first refusal" rather than "board approval" I live in a coop with right of first refusal. The building is a condo but the residential portion is a cooperative. It's called a condop.

HDFC coops have even another layer of qualifications and requirements than ordinary coops. Although HDFC coops are still private corporations like regular coops they have certain income restrictions and guidelines that they must adhere to in order to maintain their "HDFC" status and remain "affordable" and continue to receive tax subsidies from NYC under an affordable housing program.

I would be surprised if an HDFC coop board did not wield the power to approve or reject a purchaser particularly since the buyer has to be qualified under HDFC regulations. Right of first refusal limits the boards power to reject a sale with out having to purchase the unit.

Board approval means they can reject an applicant for any or no reason as long as they do not violate fair housing laws. You should consult with a lawyer experienced in HDFC coop sales.
0 votes Thank Flag Link Mon Aug 6, 2012
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
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Bkyn Girl, it is best you consult an attorney who is familiar with HDFC coops and provide him with your coops documents. HDFC coops are not like ordinary coops. Ordinary coops as Janet Levy correctly pointed out, don't have a right of first refusal. It is likely different with an HDFC coop but your attorney needs to check out the coops Offering Plan and any Amendments.
0 votes Thank Flag Link Fri Jul 27, 2012
A right of first refusal gives a party the right to match the terms of your sale. You have to give the co-op the opportunity to purchase your apartment on the same terms as you are tryng to sell it to your buyer. So the coop is "first in line" if you want to sell. If they wish to exercise their right, they can purchase the apartment for the same price. If not, they should issue a waiver of their right of first refusal (as a condo does), and your family member may proceed with the purchase only if they meet whatever criteria your board has, and only if the board does approve the sale.
0 votes Thank Flag Link Thu Jul 26, 2012
Bklyn Girl,
The right of first refusal is a term used for condos, not co-ops. Co-ops require an extensive application, also known as a board package. They can then accept or reject the applicant. So regarding whether the co-op can force you to sell to them instead of your family member, highly unlikely. I would suggest you read through your offering plan and subsequent ammendments, or consult the managing agent on sales procedures.

Best,
Jenet Levy
Halstead Property, LLC
jlevy@halstead.com
212 3814268
http://jenetlevy.halstead.com
0 votes Thank Flag Link Thu Jul 26, 2012
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