Residential Realities November 2011
November 30, 2011: What Up Dog...
The world is divided into two categories: those who love dogs and those who just don’t get it. I happen to occupy the former camp. Co-ops in New York City fall into two similar groups: those buildings that are pet friendly and those that prohibit our favorite creatures. Even in buildings that are pet friendly, there can be restrictions that relate to the size of dogs and particular breeds.
Large vs. Small
I recently had a conversation with a property manager that offered a reasonable explanation as to why large dogs can be a problem: They like to jump on and off stuff, and when they do, it can be noisy for the folks below that apartment. The yappers can make more noise, but at least it doesn’t sound like someone falling on the floor each time rover jumps off the bed.
The standard form of co-op contract has a space for disclosing whether the purchaser has a dog. The purchase application will also include information about whether pets are permitted and any restrictions or limitations on the type of pets that are permitted. Review of the minutes and inquiry with the property manager also helps clarify the co-op’s pet policy, which is often in writing. Purchasers are well advised to make sure their pets will be welcome in the co-op under consideration.
Belt and Suspenders
The co-op contract does require unconditional approval, so approval excluding a pet, at least in theory, would allow the purchaser to opt out of the contract. Perhaps it’s contract overkill, but I think it’s a good idea to include a rider provision in the co-op contract that approval of the purchaser means approval with the purchaser’s dog. Particularly if the purchaser has more than one pet, including this provision insures that the purchaser’s brood makes it to the new abode. In my experience, folks don’t jettison pets to get approved by a co-op Board, so including this provision takes the anxiety out of the situation.
What About Condos?
Condos usually are pet friendly, but pre-contract due diligence is required to make sure similar restrictions on number, size and breed won’t present a problem. Since condo Boards don’t have approval rights (only the right of first refusal), in most cases, bringing your pet with you will not be an issue.
As to Board Interviews for Dogs
Two rules: Sit and stay…
November 21, 2011:Borough in a Bubble
As I have mentioned before, it’s hard not to think of Manhattan as a real estate economy in a world of its own. It is far, far away from the foreclosure mess that continues throughout the country, with the Northeast being no exception. An article in the Wall Street Journal on Saturday brought that point home once again.
Let’s Do the Numbers
As Josh Barbanel reported, New York ranked 5th in the country, with 5.7% of all homes in foreclosure in the third quarter. New Jersey was second, with 8.1% percent of all homes in trouble. Only Florida was worse. Those percentages and rankings seemed very high to me and almost completely disassociated from the day-to-day transactional life in Manhattan. I checked real time contract signings on Urbandigs, and sure enough, 800 contracts had been signed in the past 30 days. Yes, the seasonal slowdown is about to get started, and momentum seemed to peak at the end of October, according to Noah Rosenblatt, yet 800 contract signings in one confined section of the country, seems astronomical compared to the moribund pace of transactions in most other parts of the country. Is there any other city, county or burg in the nation, that can report 800 contract signings in a 30-day period? I think not. I realize we’re talking about one of the most densely populated locations in the country, so perhaps it’s not such a large number. The point is, however, that Manhattan’s activity is the mirror opposite from the rest of the state, where foreclosure activity remains high, based on the numbers reported in the article. Once you hit the mainland, the pain continues.
Looking to 2012
Here’s the question: With the financial services industry about to experience contractions in the next few months, coupled with political uncertainty in an anxiety provoking presidential election year, can Manhattan maintain its status as an island unto itself…
November 15, 2011: A Change of Plan-A New Approach to New Construction
Can We Close the Satisfaction Gap?
There can be a disconnect between what the sales office of a developer promises and what is actually delivered by the sponsor. But maybe it’s possible to bridge the distance between the purchaser’s expectations and the post-closing reality of the bricks and mortar.
Unlocking the Secrets of the Offering Plan
As discussed on this blog, the offering plan is a complex and lengthy document, which serves as a shield against liability for the developer, provided that the required disclosures are made in accordance with the regulations handed down by the Real Estate Division of the New York State Attorney General’s office. The attorney who reviews this document is obligated to read above, below and between the lines to find the sometimes hidden truth of what’s being offered. In most cases, the risks to the borrower are clearly stated, in other situations, detective work is required. Although a good portion of each plan would be considered “boiler plate” (that is, the same legalese that always appears), each plan has its own set of tricky provisions and potential “gotchas”. With the clock ticking, the client waits patiently for the attorney to review the document and to report back on the good, bad and otherwise. Perhaps it’s time, however, for purchaser’s involvement in the offering plan review process to be more hands on.
It Started With the Special Risks
Sometime ago, I made a policy decision to forward a number of provisions of the offering plan to the client, particularly the “Special Risks” section, with a view towards improved understanding of the proposed purchase. As most folks in the industry know, the special risks section at the front of the offering plan should be more appropriately titled “You’d Better Read This”. In other words, the front of the plan is where the developer dumps all of the material positives and negatives about the development. In truth, there are other provisions lurking further into the document that require scrutiny, but the Special Risks section goes a long way in describing what needs to be known. On reflection, that was a good first step, but there may be a better way to educate the consumer.
Due Diligence By the Pound
I understand that it would be a daunting task and probably impossible for a client to absorb the substance of an entire plan in the same manner that is undertaken by the attorney. That being said, there are any number of details in the document that may not lend themselves to summary and review by the client may be advisable. For a minimal expense, a purchaser should consider obtaining an additional copy of the plan for his or her own perusal. With the amount of money being spent on an apartment, a purchaser should have the opportunity, whether it is taken advantage of or not, to review the specifics.
Not Exactly One Size Fits All
Required reading for proposed purchasers is not appropriate in any number of situations, particularly for foreign purchasers, who may have difficulty with the language, or for high end purchasers, who just don’t do that kind of thing. Nevertheless, in everyday situations, buyers should be enticed to read the document that will have a significant impact on the ownership of their unit. With ingenious liability protections for failure of the sponsor to deliver as promised, the offering plan is a sobering balance to the marketing presentation that conjures up a living environment that sometimes fails to meet expectations or the facts. The offering plan brings home the seriousness of the decision to put one’s faith in the sponsor’s abilities. The small print actually means a great deal.
Residential Reality: It’s All About the Plan
So purchasers, in addition to picking out furniture and working the color chart, make time to review a document that will significantly impact your ownership of the apartment as well as your investment. The sponsor has gone to great lengths to protect its interests and to minimize liability for things that go wrong. Isn’t a little late night reading worth it?