Lots of people talk about the stress and uncertainty of the approval process in New York City's co-op and condo buildings; all that scrutiny, all that paperwork! But the endless reams of forms and files take another toll as well - on the environment.
Consider the facts: the application a co-op board reviews (usually called a "board package") on behalf of a prospective buyer is comprised of several components: a completed application - with name, address, social security number, pets, club memberships, etc. - social and professional reference letters, proof of income, and a financial statement are almost universally required. The board may require up to six reference letters, and some require three years of completed tax returns - federal, state and city - as well as backup for the financial statements, including copies of multiple months of bank statements, life insurance policies, and retirement accounts. There are also numerous other forms typically required that relate to such items as lead-based paint, window guards, house rules and acknowledgment of the building's sublet requirements, move in procedures, pet policies, and so forth.
In completing a single board package, an enormous amount of paper is used. Some boards require seven copies, and others require as many as twelve copies of everything; one for each board member and one for management. Lenders and lawyers have their own paper requirements. Anyone who has been through a closing knows about the reams of paper that fly across the closing table.
Is this excessive paper use truly necessary in order to gain acceptance to one of our city's finer apartment buildings? Should it be? These two questions are asked daily by the parties to all New York City residential real estate transactions: sellers, buyers, landlords, tenants, lawyers, brokers, management agents, and co-op board members.
This embarrassingly tedious and wasteful process is industry's decidedly non-standard operating procedure. Some boards want the packages in a certain order, some don't care; some insist on dividers, some say no dividers; some want the packages loose, others bound; some want cover letters, others specify no cover letter. It seems that this process is reinvented every time a board package is submitted. Everyone abhors it, but accepts it as the norm due to the lack of an alternative. There needs to be a better way.
It is mind-boggling that a standardized system has not been adopted. The Real Estate Board of New York (REBNY) has indeed created a standardized form for a financial statement, but it has not yet been adopted by many boards, and is not mandatory.
Not only is a massive paper trail tedious and often redundant, it's wasteful and environmentally irresponsible. Reams of paper used once, only to be discarded once the process is finished stresses our already-stressed natural resources. According to the World Wildlife Fund, "Forests are essential to human beings: they provide us with food, fuel, shelter, medicines, and a variety of wood products. They also purify our air and water and provide us with places of recreation and renewal. Almost half of the planet's original forests have disappeared. Of what remains, only about ten percent are protected."
In July 2004, New York State Attorney General Eliot Spitzer initiated several lawsuits against power plants in the Midwest demanding they stop polluting New York State. As New Yorkers, we should work together to save the trees, therefore creating a healthier environment. The same trees that we can save by reducing paper costs can help us reduce energy costs in our buildings. The USDA Forest Service states that "trees properly placed around buildings can reduce air conditioning needs by thirty percent and can save twenty to fifty percent in energy used for heating."
In addition to adopting a standard, industry-wide application and protocol for board package submissions, we should also reduce paper waste by utilizing the technological resources that are available to us. The obvious solution is to take advantage of the capabilities offered by the Internet. With more people every day becoming web-savvy and using the Internet to find homes, why not also use the Internet to proceed with their purchase and sale?
Generic board package information (lead paint disclosure, etc.) should be available on one site. Buildings' offering plans, financials, minutes of board meetings and application forms should also be available online, perhaps on a password-protected site. Completed packages should be submitted and distributed to seven, 12, or 50 shareholders, but virtually, instead of in thick binders and wasteful folders. With so much technological savvy in our industry, it should be simple to replace our archaic paperwork process with streamlined, standardized, hi-tech procedures.
In her book
Leave a Comment