Ms. Demeanor's Vertical Etiquette

Dear Ms. Demeanor: I have money in the bank but a board still turned me down. What did I do wrong?

The money was actually a gift from my parents.

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Question:

I was recently turned down by a board for an apartment that I really wanted. They said that the money in my bank account was recently transferred and that it was a “trigger,” indicating it may have been a short-term loan. The money was actually a gift from my parents. What do you think I should have done and how do I convince a board to approve me in the future? Signed, Confused and Rejected

Answer:

Dear Rejected,

I cannot speak for all boards but mine would have done the same thing. When a board looks at a potential shareholder’s financials they are looking to see if a person can pay the maintenance even if he or she lost their job. I know that some boards require at least three months’ worth of payments up front.

To avoid this problem in the future you could have your parents co-sign for you. They would then have to go with you for the board interview and their financials would also need to be shown. If you defaulted, they would be liable. The other option would be to give the board half of that gift to be put into escrow. Then, if you defaulted, they would have the money to pay the maintenance. 

We have done that same scenario twice. In both cases, we held onto the money for five years. Then, after the new buyers showed a solid record of paying their bills, we returned it with interest. Every board has different rules. A good real estate broker will lead you to the buildings that are more lenient. And be sure to emphasize in your co-op package letter that it was a gift you received, not a loan, and that even without it, you have the liquidity to pay your monthlies. 

Work with a good broker who will know the rules before you get to your interview and save the rejections for bad first dates.

Ms. Demeanor


Dianne Ackerman is the new voice of reason behind Ms. Demeanor. She has lived in her Upper East Side co-op for the past 20 years and is the vice president of her co-op board. She is filled with opinions that she gladly shares with all who ask—and some who do not. Have something that needs sorting out? Drop her an email.