There is one piece of work in a New York building that decides whether a shareholder can sell their apartment, and most boards have never discussed it.

When a buyer or a refinancing owner goes to a lender, the lender sends the building a questionnaire. It asks about the building, not the borrower. The answers determine whether the lender will finance an apartment there at all.

A qualified buyer with a good deposit can be turned down because of what came back on that form — or because it did not come back in time.

What the lender is actually asking

The questions vary by lender but cluster around the same concerns:

  • Owner-occupancy percentage — how much of the building is rented rather than owner-occupied.
  • Arrears — how many units are behind, and by how much.
  • Litigation — whether the building is party to any.
  • Insurance — coverage types and limits.
  • Reserves — what the building holds.
  • The underlying mortgage in a co-op — terms and maturity.
  • Concentration — whether a single entity owns an outsized share of units.
  • Pending capital work or assessments.

Buildings most often fail on concentration and arrears. A building where one party holds a large block of units — a sponsor, or a holder of unsold shares — can trip a lender's threshold. So can meaningful arrears, which is one more reason collections matter beyond the cash they represent.

Lender criteria and thresholds change. Confirm the current requirements with the building's mortgage advisor rather than assuming what was true at the last transaction.

Why this is a board matter, not just an agent's task

The work belongs to the managing agent. The standard belongs to the board.

Here is the mechanism that keeps it invisible: when a questionnaire is slow or wrong, the person harmed is a shareholder trying to sell, and they take it up with their broker, their attorney, and the agent. By the time it reaches the board — if it ever does — the deal has closed late, or not at all, and the shareholder has moved on.

So the board's experience is silence, and the building's actual reputation among brokers is quietly deteriorating.

This is one of the recognized signals that a building has outgrown its agent, and it is listed as such in how a board changes managing agents — unresponsiveness on transactional work directly costs unit owners deals.

Set a standard and measure it

The board does not need to do the work. It needs to set the expectation and see the numbers.

Set a turnaround standard. Fast enough that a questionnaire is never the reason a closing slips. Transactions run on financing contingencies with dates attached, and a form sitting in a queue can eat a meaningful share of that window.

Ask for three numbers, periodically: how many questionnaires were received, how long each took, and how many needed a correction or follow-up.

If the agent cannot produce those, that is itself the finding. It means nobody is measuring the process that determines whether shareholders can transact — which is the same category of gap as financial reporting a board cannot rely on.

Answer accurately, always

A questionnaire is completed on the building's behalf. An inaccurate answer — even a well-intentioned softening — creates exposure far larger than whatever the honest answer would have cost.

If the building has an unfavorable position, the correct response is to fix the underlying problem, not to describe it more kindly:

  • Arrears are high → work the collections.
  • A maturity is approaching with no plan → start the refinance work.
  • Owner-occupancy is drifting → that is a sublet policy conversation.
  • Reserves are thin → that is budget season and a component schedule.

Each of those is a real board decision. None of them is solved by an optimistic questionnaire.

Fees, consistently applied

Many buildings charge for completing questionnaires, status letters and payoff letters, and that is reasonable — the work is genuine and it takes time.

Two disciplines: confirm your authority in the governing documents and whether any limits apply, and apply the fee consistently rather than varying it with who is asking. The same principle governs every other charge the building levies.

The compounding effect

A building where questionnaires come back quickly and accurately develops a reputation among brokers and lenders as one where deals close. A building where they do not develops the opposite reputation, and it shows up in ways nobody attributes to the cause: offers that come in lower, buyers who walk, apartments that sit.

Shareholders experience that as a market problem. Frequently it is an administrative one.

Where a managing agent carries this

Turning questionnaires around inside a defined standard, answering them accurately from records that are actually current, tracking the volume and the timing so the board can see it, and flagging when an answer is going to cause a problem so the board can address the substance is core to condo association management and co-op board management.

If your board has never asked how long these take at your building, schedule a consultation or call 718-568-9278 — and ask the question this month.

This article is general information, not legal or financial advice. Lender requirements vary and change, and fee authority depends on your governing documents. Consult the board's attorney and the building's mortgage advisor.