Asked and AnsweredWe are in negotiations to purchase a co-op apartment on the Upper East Side. Our lawyer reviewed the minutes and discovered that the building has a bedbug infestation. Should we go forward with our purchase?
Unfortunately, there is no easy “yes” or “no” answer to your question. In fact, once a bedbug infestation is disclosed, many more questions have to be asked. Is the bedbug problem only in the apartment under consideration or in an apartment adjacent or close to the apartment you are considering? Is the problem affecting a significant portion of the building? Did your seller bring the bugs into the apartment or did the bugs come from another apartment? Is management being responsive and does the problem appear to be under control? Most importantly, can the infestation be treated and resolved before the closing takes place? Addressing any issue after closing is always a bad idea; with bedbugs it should be a non-starter.
A buyer has to weigh the realities of the bedbug problem against the relative value of the apartment and degree of difficulty involved in making the problem go away. A problem in one apartment is very different from a problem affecting twenty or thirty percent of a building. Some folks will just not be able to deal with the idea of creepy crawlies having resided in and about their living space...ever.
As is clear from Penelope Green’s enlightening article in the New York Times (March 11, 2010), although the problem was eradicated in the 1950s, the bugs have found their way back, together with a bedbug removal industry. Various techniques are employed to ferret out the problem, with varying degrees of success. Websites like bedbugger.com and the advocacy group New York vs Bedbugs (both excellent resources), make it abundantly clear that our new friends are here to stay. With 11,000 complaints last year, the view at the moment is that the bugs are everywhere, so moving on to the next building may not necessarily protect one indefinitely from the problem.
All of the above being said, in answer to the question, if the infestation appears to be quantifiable and if the building has an action plan in place that is working, going forward with a proposed purchase can work. If you happen to find yourself at the beginning of the problem, with those beloved beagles running around trying to figure out where the bugs are, it can take months and perhaps years to get the problem under control.
The bedbug quagmire gets more complicated as there is a difference in responsibility on the part of a Board depending upon whether the infestation is in a co-op or a condo. As I have indicated in "The Great Co-op Secret”, one of the primary advantages of a co-op over a condo is the applicability of the Warranty of Habitability (Section 235-b of the New York Real Property Law). Under this protection, every lease has an implied covenant pursuant to which the landlord has to keep the building fit for human habitation and free from conditions that endanger the life, health or safety of the tenants. Freedom from bedbugs falls within this protection. As a co-op is a “landlord” for purposes of the statute (the landlord-tenant relationship is created by the proprietary lease), tenant-shareholders are protected and co-ops have an obligation to keep the building free from critters like bedbugs. As condos do not fall within the protection of the Warranty of Habitability, a condo owner who happens to have the only apartment impacted by an infestation, may be on his or her own in resolving the problem. That being said, once a problem affects a portion of a building or more than just one apartment, the management of a condo will have no choice but to resolve the problem collectively, or the problem may never go away. Taking the Warranty of Habitability into consideration, one could argue that a bedbug problem in a condo could be more difficult to resolve that one existing in a co-op.
If the bedbug problem is disclosed during due diligence and before the contract is signed, the buyer has the opportunity to move on to other opportunities, if he or she so chooses. If the problem arises or is disclosed after the contract is signed, that a whole other can of worms (sorry…) and the subject for another discussion…