Health & Fitness
Do the leaky windows come with the New Development? Or is that Extra?
New Construction Developments in Park Slope can come with their own set of problems. Be involved and feel better about the process. Here's how.
Just a few years ago, it was almost as fashionable to begrudge the new construction going on in Park Slope as it was to sing Poker Face, loudly, through an open car window. But the Times, they are a changin' (Gaga--> Dylan was inadvertent).
When I was doing closing for purchasers in new construction units just a few years back (remember The Novo) I would always get questions surrounding how to protect yourself in a Contract of Sale from defects. And, maybe the market has quieted down when it comes to new construction in Park Slope, but there are still plenty of people that are buying those types of condos. So here goes:
1. Your attorney MUST read the offering plan and he/she MUST explain it to you. The Offering Plan is the developments version of a King James Bible. It is to be taken literally. No interpretation of terms. The Offering Plan will state what the unit comes with in terms of appliances, the square footage you have, the fees you'll pay at closing, the procedures of management, the proposed budget, etc. Heres the thing. A lot of people didn't read that thing. They read the Contract of Sale. And while that's super great, you'll notice that in almost any Contract of Sale for new construction, there is some awesome language which states that the Offering Plan, unless noted otherwise, will supersede any terms in the Contract.
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Let me give you an example. A Contract of Sale can state that the buyer will not pay transfer taxes. If the Offering Plan states that the purchaser WILL pay transfer taxes, unless it's explicitly noted in the Contract, you're paying these transfer taxes.
Beyond that, there is a wealth of information in that Plan. Sellers attorney stating that you're not getting a microwave? If the Offering Plan states you are, and no "amendments" have been filed to the contrary, you best be gettin' a microwave in your Unit. It's happened several times to my clients and the Good Book has helped us out of those situations. So, lesson #1 is always read that thing. If you have to quiz your lawyer on it, do it. I'm serious. You're plunking down hundreds of thousands of dollars on the Unit, so you might as well make sure you're getting everything you pay for. It seems like common sense but you'd be surprised how many issues come about as a result of not reading this thing.
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2. Caveat Emptor. (Means Buyer Beware. I know this, because I have enormous student loan debt and thats one of the things they taught us in law school.) Look, the brochure may look great. The Corcoran guy with the snazzy tie might be a great broker and salesperson, but it doesn't mean everything is up and up with the Unit or the development. I tell every single one of my clients to get an inspection done of the Unit they are planning to purchase BEFORE they sign the Contract. "Before?" Yes, before. "But that costs me money." Yes, yes it does. What it gives you, however, is an amazing sense for the issues, if any, in the Unit. If you have a licensed inspector come in, you'll know if the floors are bad, you'll know if the windows are completely leaky. You'll know if the AC works, and if the electrical is up to par. Some attorneys say "Save it till the end." Nonsense. You want to get it done before someone is holding tens of thousands of dollars of your money in an escrow account. You also are able to negotiate from a position of power.
Example: So, yeah, um, it's not...we're not...the floors are really bad, so we're going to take $15k off the price. Is that OK?
Broker: (Reluctantly) I'll speak to the developer, but maybe...
Again, it's not hyperbole. It happens much more often than you think. You'll know what you're buying and how much you should be paying for it. If nothing else, we'll be able to insert these issues into the Contract of Sale from the initial point, so that they can be remedied by closing (hopefully). It's simply taking control of the closing.
That's it for now. In the next blog, I really want to discuss things to look out for in the Contract of Sale and questions to ask your lawyer. I hope I didn't put you to sleep with this.
You can always email me : daniel@danielgershburg.com
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