Can a co-op board ask to see my credit card statement when I apply to buy an apartment? How common is it? How far back do they want to see? What are they looking for? Can I refuse? That seems like a big invasion of privacy. Like most people, I pay for almost EVERYTHING by credit card these days. What's next, Venmo records?
Co-op boards do tend to ask applicants to provide extensive documentation about their finances, and once you're in the midst of the application process, there's not much you can do to push back, our experts say.
"The process of buying in a co-op is virtually synonymous with an invasion of privacy. If you are not comfortable with that, then it is important that you buy in a condo," says Deanna Kory, a broker with Corcoran. "A co-op board, by its nature, can ask for anything it wants as it pertains to your financials, letters of reference, and more."
Boards typically want to see that you have the financial reserves to cover six months to two years of maintenance fees after closing on an apartment. To determine this, they may ask to see various documents, including tax returns, reference letters, and other kinds of financial statements, potentially including credit card statements.
Part of what the board is looking for is your debts—many co-ops want to see a debt-to-income ratio of no more than 25 percent.
"The crux of the application is your financial statement, where you list your assets and liabilities, followed by verification of assets, where you prove the numbers and totals on your financial statement with bank statements," says Gordon Roberts, global real estate advisor with Sotheby's International Real Estate. "Suppose you do carry debt on three credits cards; you’d have to record that debt as liability on the financial statement, and submit the credit card statements to prove that the amount of debt you’ve declared is, in fact, accurate."
Roberts suggests that you redact the "activity" from your statement and just show the outstanding debt, which is likely all that the board is interested in. This is why getting your finances in order—and paying down any substantial credit card debt—is something buyers should address before they apply to co-op boards.
Legally speaking, if your application is already underway, there's not much you can do to push back against the board's requests for information. In fact, doing so could cost you any deposit you've already put down on the co-op.
It's standard for co-op contracts to require that buyers submit whichever financial documents they request.
"Thus, if the purchaser fails to submit requested information, they run the risk that if the application is not approved, the seller will take the position that the purchaser breached the contract and therefore the seller is entitled to keep the deposit," says Jeffrey Reich, a partner at Schwartz Sladkus Reich Greenberg Atlas.
The request for your credit card statements is a bit unusual, Reich adds, but there may be something in your application that led the board to vet you more thoroughly.
"My advice would be to provide the requested information and take comfort in the fact that the board takes its role seriously," he says.
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