Q&A: Having Second Thoughts?

Q Our cooperative board has approved a buyer for one of our units. The seller and prospective buyer have already gone to contract. There are presently a number of board members who have second thoughts about approving the buyer and would like the board to revote. Can the board reconsider their approval after a contract has been signed? In general, up until what point can a board reconsider? Is there a difference if the reason is financial or character-based?

— Questioning Co-op Board

A “A cooperative board cannot discriminate against a prospective purchaser based upon race, color, creed, etc., and the only reasons a board can reject is purely financial or character-based such as the existence of a criminal background,” says Hackensack-based attorney Donald M. Onorato.

“The letter writer is unclear concerning the scenario in this matter, [but] it appears that the selling shareholder and prospective purchaser have entered into a contract, and all contracts state that the transaction is subject to the board’s approval of the purchaser. The board can certainly ‘reconsider their approval after a contract has been signed’ if information came to their attention which would change their vote. Again, the letter writer is unclear whether the board’s initial decision was communicated to all the parties therefore approving the transaction.

“If enough members of the board had ‘second thoughts’ and asked for a revote of the matter, as long as the reconsideration is not based upon any discriminatory practice, the board certainly is permitted to revote the issue. However, the board must do so quickly in the process to avoid the parties taking any action that would be reliance on the board’s initial decision and which could be detrimental to them in the future.”

Related Articles

Market Survey

Where We Were in 2018 – and Where We’re Headed

Q&A: Smoking in the Building

Q&A: Smoking in the Building

Q&A: Withholding My Assessment

Q&A: Withholding My Assessment

 

Comments

  • Mr. Price, I appreciate that you cmoemnt under your own name. Some of us, for various reasons, feel as though we cannot without having repercussions come back against us or ours. But I'm reading your posts and you rarely mention quality of education. It's all about politics, and by extension, doing exactly what the Dems are doing now.Sure, I get that the BOE is a political entity. But at what point does good governance trump politics? How will the conservative principles to which you subscribe translate into readying Pennsauken's students for the global economy? I subscribe to being slightly left of center, by the way. But those of us who are non-partisan are not lying to ourselves. We see the partisan politics for what they are, two clubs trying to gain access to the stream of tax dollars and jobs that the BOE and the township represent. Those of us who are non partisan are trying to look out for the district and township as whole. Our loyalty is to governance, not political party.