March 28, 2020
How long will it take to get board approval when buying an apartment in NYC? It's a simple question with an unsatisfying answer - it depends - but at least we can dive into what it depends upon.
What is board approval and when do you ask for it?
What impacts how quickly you’ll get board approval?
What is a normal amount of time to get board approval?
Does time for board approval differ in a co-op vs condo?
What we mean by "board approval” will differ depending on whether you’re buying a co-op or a condo.
In a co-op, the board is actually approving your application. Co-op boards have the power to deny your application in which case you won't be buying the apartment. The contract will be cancelled and you'll get your deposit back.
Condo boards do not have that power. Instead they have a "right of first refusal," meaning the building can choose to step in and buy the apartment instead of the original buyer. They cannot reject the purchase outright. Either the buyer buys the apartment or the building does. When a condo board approves an application, it is actually waiving its right of first refusal and allowing the buyer to purchase the apartment.
In either case, you'll ask for board approval by submitting your purchase application to the board. If you're financing, this usually happens 4-6 weeks after you sign the contract because the lending application needs to be completed first. If you're paying cash, the contract will usually say you have two weeks.
The number one thing you can do to speed up approval is to submit a complete and clear purchase application.
When the time comes to submit your application, you will actually be submitting it to management who will review it first. Any questions or comments they have will need to be addressed before it goes to the board. Eliminating any back and forth at this stage will save about a week.
Electronic applications also help speed up the process. You won’t have a say in this - each building has its own system - but since online applications don’t need to be copied or delivered, the logistics are quicker.
There's a wide spectrum for board approval. In some buildings, especially smaller buildings, applications are reviewed as they come in. Larger buildings typically have a set monthly schedule. If you miss this month’s meeting, you’ll have to wait for the next one. The seller or listing agent should be able to provide some guidance around how often the board reviews applications but sometimes nobody knows. It can truly be a black box.
Most buildings do their best to review applications within a reasonable amount of time and do so within a few weeks.
If you're buying a condo, congrats! That's the end of the road. But if you're buying a co-op, you'll still need to be interviewed before the board approves your application. Again the spectrum is wide here. Some boards ask to see applicants the next day, others simply schedule it for their next monthly meeting.
Condos will generally turn around your application faster than a co-op for a couple reasons.
The first is simply without an interview, that entire second step is eliminated. Once the waiver of first refusal is granted (remember that’s a condo’s form of “approval”), you can start scheduling the closing.
Condos also use online applications much more frequently. This allows management to resolve outstanding items quickly and distribute copies to the board instantly.
And finally, condo applications just tend to be a little simpler. With fewer sections, there are fewer questions that can come up.
At Yoreevo, we tell our clients to plan for a month for board approval regardless of if it's a condo or co-op but with a little luck, a condo should turn it around sooner.