The Dreaded Co-op Board Application Goes Online
Buying an apartment in a New York City co-op can involve baring your financial soul. Co-op boards (and, increasingly, condo boards) demand that applicants show years of tax returns and other financial statements, provide letters of recommendation and even share details about their pets and hobbies. This infamous board package can run hundreds of pages and determines whether or not a buyer gets the apartment.
All that information must be collected, collated and copied for every board member to review, a mind-numbing task. Now, a few companies have stepped into the arcane world of the board package, promising to simplify the chore by dispensing with all that paper and moving information online.
These platforms — ApplyPort, BoardPackager and, in the coming months, ApplySmart — will not make the process any less intrusive. You still have to “lift your skirt all the way up,” as Clelia Warburg Peters, the president of Warburg Realty, put it. But perhaps, you will feel slightly less exposed if you (or, more likely, your broker) no longer have to ferry 10 copies of your 200-page portfolio around the city by courier pigeon. So long, copy shop; hello, iPhone app.
“You do enough of these things and you’re like, ‘Oh my God, there has to be a better way,’” said Ms. Peters, whose own board package was recently misplaced in the basement of a co-op when she and her husband were applying to buy an apartment. (The package was eventually located, and later approved.)
With any of the three platforms, a buyer or a broker can upload personal and financial information, fill out applications and pay fees. Once it is complete, the managing agent can review the application online, redact sensitive data like Social Security numbers and prepare the bundle for the board. Board members can then log on to review, reject or accept the application with the click of a button. Anyone who prefers paper can still print the documents.
All three companies insist their platforms encrypt sensitive information and keep it secure from hackers. Although uploading such material into the cloud poses potential security risks, printing everything out and hoping a half-dozen recipients eventually shred everything is hardly a foolproof alternative.
Some brokerages and management companies quickly embraced the services. BoardPackager entered the marketplace earlier this year, signing agreements with CORE real estate, Century Management, Argo Management and Douglas Elliman’s brokerage and property management divisions.
The founder of BoardPackager, James Brune, an associate broker with Douglas Elliman, got the idea after suffering through a package glitch that involved 4,000 sheets of paper, two jammed printers and a frantic dash to Staples. The price tag for all those photocopies: $500. “The current decades-old process is a waste of time, money and resources,” Mr. Brune said. (Douglas Elliman is not an investor in BoardPackager but is an early client.)
Talk to brokers and you get an earful about an obsolete system that somehow still prevails in a market where even a fixer-upper can fetch a cool $1 million. “You’re chopping down 50 million trees to do a single package for a fancy building,” said Elizabeth Ann Stribling-Kivlan, the president of Stribling, which is finalizing a deal with BoardPackager. “By the time you’re done, this package has been from here to Topeka 18 times.”
Douglas Elliman released BoardPackager to its brokers in March. In the first three weeks, 64 packages were assembled using the platform. “They’re excited,” said Jeff Hummel, the chief technology officer of Douglas Elliman. “Anytime we can take technology and have it be like background music, they just don’t know how they ever lived without it.”
The idea is not entirely new. OnlineBuildings, a web developer, created ApplyPort in 2007 for FirstService Residential New York, a property management company that was called Cooper Square Realty at the time. Educating co-op board members involved “a lot of hand-holding initially,” said Dan Wurtzel, the president of FirstService Residential New York. But eventually, people adapted and now 90 percent of the 500 co-ops and condos that the company manages use the platform.
For years, ApplyPort struggled to get traction beyond FirstService. Peter Friebe, the president of OnlineBuildings, said that property managers simply saw little reason to reinvent a system that worked well enough.
Consider Vanderbilt Management, which manages 22 co-ops and condos in the city. An applicant sends the company a single printed copy of the package, and Vanderbilt scans it, copies it and sends the copies to the board. “We’ve been doing this for 35 years and we’ve got it all figured out,” said Steve Birbach, the president of Vanderbilt. “No one complains.”
There is also the issue of money. Already buyers pay around $700 to $1,000 in application fees, if not more. ApplyPort charges property managers $50 per application. BoardPackager charges the companies that use its platform a fee that varies depending on the terms of the agreement. ApplySmart declined to say whom it planned to charge, since the platform is still in development.
Still, the tide is shifting. In the past year, OnlineBuildings has noticed a surge of interest in ApplyPort. Nine management companies have signed on, including Rose Associates, Brown Harris Stevens and Halstead Management. “They see it as a selling point for them now, rather than, ‘Oh jeez, it’s something else I have to do,’” Mr. Friebe said.
But are these platforms really a game changer? “We’ve had mixed success,” said Paul Gottsegen, the president of Halstead Management, who has not found that ApplyPort saves his employees much time. As for the boards, some embrace the technology, while others resist a new system when the alternative is literally handed to them.
“It’s a learning curve, certainly, for all of us,” said Michele Sansone, a board member of the John Adams, a 416-unit co-op on West 12th Street, which is managed by Halstead and began using ApplyPort last summer.
Some board members were reluctant to change. “They really wanted the physicality of the paper,” she said. But Ms. Sansone and other members preferred the new system. Ultimately, the board voted to keep it. “It just streamlines the process,” she said.