The Online Offering Plan
January 22, 2011
A Good Development
An article in the Times on January 20th hails the arrival of Titlevest’s online library of co-op and condo offering plans and amendments, now available to attorneys and the public. As it turns out, I actually used this library successfully this week in one case, not so much, in another. Hopefully, the donations to the library will continue, and eventually, most plans will be available online. I’m enthusiastic about it and will be sending over my dusty plans as well. Hopefully, developers will do the same to help the cause.
Don’t You Hate When That Happens
Contrary to the sentiments of the apartment owner in the Times piece, most attorneys who take their responsibilities seriously, do, in fact, read the offering documents, to the extent the materials are available. The unavailability of these important documents is always a great frustration and often slows down the progress of the transaction. Beyond paper shuffling, many times a unique feature of a co-op or condo development is spelled out in an amendment to the offering plan. Without the full set of documents, trouble could be lurking and a buyer could be in for a big surprise.
Get Your Docs Together
It has always been a mystery to me why some brokers don’t require a seller to produce or pay for a set of offering documents when a listing agreement is signed. As I experienced this past week, the “document” that was delivered to me was missing pages and was presented sans amendments. That’s simply unacceptable and incredibly annoying. For parties that are eager to get their deals done in a stressful market, here’s a good rule that I hope all will follow:
As soon as the listing agreement is signed, obtain a copy of the offering documents from the seller, or purchase the documents from the managing agent or from Titlevest’s ever expanding online library.
Do You Have All the Amendments?
A séance is not required to determine if you have all the amendments. Simply call the real estate division of the New York Attorney General’s Office and they will gladly tell you the last amendment that was filed. If items are missing, you will have time to track down the absent amendments. In many cases, however, because of the age of the co-op or condo, the offering documents may not be available or locatable. By investigating the status upfront, however, the transaction will not be slowed down once there is an accepted offer.
Don’t Expect a Seismic Shift in Offering Plan Readership
As my friend Michele Conte points out in the article, it’s primarily the job of the attorney to review the offering documents. The newer plans can be quite complicated, and in many cases, incomprehensible to any reader, including attorneys. That being said, as I suggested in "Toolkit for Purchasing from a Sponsor", every purchaser of a new construction condo should at least review the “Special Risks” section contained at the beginning of every plan. It’s where the sponsor is obligated to disclose the good, the bad and the ugly of each new condo offering (like the revelation that an apartment will be primed, but not painted). Not exactly John Grisham, but a must read.
Residential Realty: A Great Step in the Right Direction
Although delivery of the complete set of offering plan and amendments should be standard operating procedure, in many cases, getting what you need can be somewhere between a challenge and impossible. Hopefully, this online library is the beginning of a beautiful thing.