Rachel wants to refinance her share loan to take advantage of lower interest rates. Her co-op board states they must approve the new lender. Is this requirement legally enforceable in New York?
Correct Answer
C) Yes, if the cooperative's bylaws or proprietary lease contain provisions requiring board approval for financing changes
Co-op boards can require approval for refinancing if their governing documents (bylaws or proprietary lease) contain such provisions. Since the lender becomes a secured party with rights to the shares and lease, boards often retain approval rights over lender changes to protect building interests.
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