Buyer ‘strip search’ part of co-op life
Co-op owners are a smug bunch. They’ve been judged and deemed acceptable by their neighbours.
This highlights the difference between co-operative apartments and condominiums.
Buy a suite in a co-op and you’re purchasing a share in a building.
This building share equates to your apartment, but its board must first approve you as being as worthy of ownership as the exalted beings now in residence.
With a condo, you just purchase your apartment.
Co-operative ownership was common before the 1970s, but since then, most highrise residential developments have been condominiums.
Other than in Montreal, the idea of living in an apartment, even a grand one, was never an aspiration for many Canadians until the 1980s.
As a result, there aren’t many coops in Canadian cities, and the ones we have are older, albeit desirable, buildings.
It’s different in the United States, especially New York. While co-ops are still mostly pre-1960, the most coveted being “prewar” (i.e., before the Second World War), there are quite a few of them, and they’re considered among the best places to live.
Why do people expose themselves to a financial strip search by a co-op board, not to mention the humbling imperative of cajoling references that detail your good character and social significance?
I used to believe it’s because coop apartments are typically in the choicest locations, have wonderful features such as high ceilings, fireplaces and kitchens with windows, and it was worth it to grovel. (In Toronto, I associate co-ops with the best modernist apartments of the 1950s and 1960s.)
After hearing the stories of several co-op owners, the most compelling reason to buy is you get to choose your neighbours.
Co-op boards emphasize simpatico: If we have to live with others, they might as well be nice like us.
A board can reject without giving a reason; it’s the last bastion of prejudice and beyond the long arm of government regulation. Even today, some buildings still care about attributes too politically incorrect to mention.
If you’re rejected by too many co-op boards, you buy a condo or move to suburbia. Richard Nixon was famously forced to live in New Jersey after he was repeatedly declined.
Real-estate agents will advise if you’re likely to pass a co-op board’s scrutiny. Some buyers ask to be “pre-cleared” before they make an offer to avoid embarrassment later.
Others campaign for years and suck up to prominent owners in a building so they can eventually purchase there.
Celebrities are often the first to be rejected — with good reason. Do you want photographers stalking the entrance to your elegant address waiting for Madonna to appear?
Worse, do you want to live in the Dakota, on Central Park West, worrying that there’s a gunman lurking in the shadows waiting to kill the fellow who lives across the hall, today’s equivalent of John Lennon?
People who are rich on paper but don’t have much cash on hand are frowned upon as potential co-op buyers because buildings often need large infusions of cash for immediate repairs.
I’m told that New York co-op prospects are expected to demonstrate that they have liquid assets equal to — at a minimum — the cost of the apartment they want to purchase.
It’s said that, in the most rarefied properties, this multiple is much higher. And, of course, you must pay cash for your suite, a co-op can’t be mortgaged, and few buildings allow co-ops to be rented.
My agent advised me not to bother trying to buy a Central Park West maisonette, because I was from out of town. (It was a small dentist’s office and could be converted back to a one-bedroom apartment.)
The building didn’t want any suite used as a pied-a-terre. Also, these are the kinds of suites that are likely to be loaned to friends. Not desirable, either. Some buildings don’t like children or pets. I was told of a very nice New York co-op that decided to become a no-pet building and grandfathered the current dogs living there. One family continues to have “Rover” 20 years later. He’s looking younger all the time.
Famous Canadians with staggering fortunes can still have a rough ride with New York co-op boards.
Their assets and references are discounted, because they’re from that socialist country to the north.
So what if the prime minister of Canada writes a reference; who’s he, anyway?
Co-ops are clubs. When I stare longingly at some of my favourite addresses, I hear Groucho Marx’s line: “I don’t care to belong to any club that would accept people like me as a member.”
An example of a co-op apartment in Ottawa.