If you are looking to buy a co-op but get rejected by the board, you recourse for getting back the money spent on fees and costs of purchase is low.

Q: I was trying to buy a co-op. I found a property and paid fees for appraisal, lawyers’ fees to my attorney and to the bank attorney and some money to the co-op board for them to release some information.

The real estate agent I was dealing with promised me that there would be no problem with board approval. Guess what? I got the shock of my life when the board turned me down just before closing and all I received was a phone call from the real estate agent that I was not board-approved with no explanation.

The mortgage was already approved. Given these hard economic times, can I recover anything? Who was at fault? Was I dealing with an inexperienced person? I am still homeless and now do not know who to trust. I lost close to $1,500. Please advise.

A: A co-op is a type of homeownership where you don’t really own the property. Instead, you own shares in a corporation that owns the entire property. Your specific shares allow you to lease a specific apartment in a building.

When you pay property taxes on a co-op, for example, you pay your share of the taxes to the co-op corporation. It’s the co-op corporation that ultimately is responsible for the payment of the real estate taxes and all other expenses that affect the cooperative building. If you want to fight your property taxes, you would have to get the entire co-op building to fight its big tax bill, since you pay a piece of that rather than an individual tax bill. (This is why co-op taxes, unlike taxes for a condominium, are generally paid as part of the monthly assessment.)

The other thing about co-ops is that you might have to be approved by the board of directors before you can purchase the shares. Unlike a condominium, the co-op board may reject you for any reason: bad hair day, poor wardrobe choice, or not enough cash in the bank.

With a condominium purchase in most instances, the board of directors can only reject you if it is prepared to buy the unit in question. Generally, condominium buildings have what is called a right of first refusal. That is, the condominium board can reject a potential buyer but then the condominium building would have to buy the unit from that seller.

Cooperative buildings can sometimes be viewed as joining a club in which the members of that club can decide whether to accept a prospective member or not. The cooperative can’t discriminate on the basis of race, religion and other major recognizable issues, but they can decline to accept a prospective purchaser if they don’t feel that purchaser has the wherewithal to live in the building or they don’t feel the prospective purchaser is the right fit for the building.

Your broker clearly couldn’t read the tea leaves at this co-op board, and since the board owes you no explanation of why you were rejected, you’re likely not going to be able to find out. But other folks will hear that this board recently rejected you (word travels fast in the local real estate world in some communities), and it will make the next buyers more nervous about getting approved, never a good thing.

It’s possible that your real estate agent was partially at fault for failing to clearly explain that there is no way to predict which way a co-op board would rule and if you live in a state where real estate attorneys are used to help buyers in the transaction, your attorney should have told you that the approval process means just that – you must be approved before you can buy. You might have had outsized expectations and your agent should have set expectations accordingly.

It’s unfortunate, but there are times we undertake business transactions that ultimately fall through and the costs of the transaction must be paid for even when the deal does not close.

Hopefully, you can still use your loan, but for a different property. Contact your lender to discuss your options and whether it is worth extending the lock on your loan. Given that mortgage interest rates fell again this week, you can probably do better by starting all over again.

As for the loss of money, sometimes that happens when you’re buying real estate. Condominiums are a lot more predictable than co-ops. If you don’t want any surprises, you should think about renting, but even renting has its own risks and surprises.