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Thread: Buying a new construction condominium

  1. #241
    Disgruntled Optimist lofter1's Avatar
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    First time buyers should definitely educate themselves on NY State Law, which governs condo / coop projects.

    A clause in a contract cannot supersede the Law.

    From a recent NY TIMES:

    A New Condominium Isn’t Ready on Time

    By Jay Romano
    July 4, 2008



    We signed a contract on a preconstruction condominium in November 2006. The developers told us that it would be finished in April of this year, with early June being the latest. As these dates have passed, they have not been upfront with us on the progress of construction. Furthermore, I found out that the offering plan has been amended four times, and our attempts to get a copy of those amendments have been fruitless.

    I am frustrated and I want to get out of my contract. Is there any remedy for me that does not involve losing my deposit?



    The purchase of a condominium unit that is under construction is governed in New York State by the terms of the offering plan and the contract of sale, according to Edward T. Braverman, a Manhattan real estate lawyer.

    Those documents, he said, generally provide for a specific closing date — subject to the purchaser’s option to cancel the contract if closing does not occur by that date.

    Mr. Braverman said that the option to cancel must usually be exercised within a fixed time after the proposed closing date. “If the purchaser fails to cancel by the date specified, the purchaser’s option to cancel is deemed waived,” Mr. Braverman said. So, he said, the writer may well have waived her option to cancel the contract by failing to exercise her right to do so on time.

    Nevertheless, the attorney general’s regulations for newly constructed condominiums grant purchasers a right of rescission if the offering plan is amended with a material change. “Such an amendment must be served upon the purchaser” in writing, Mr. Braverman said. “And if the purchaser exercises her right of rescission, the sponsor must return any deposit or down payment previously received.”

    Accordingly, he said, if any of the four amendments (copies can be obtained from the office of the state attorney general) amount to a material change of facts or circumstances affecting the property or the offering, they must be served upon the purchaser. If the letter writer was not served, Mr. Braverman said, she should be able to cancel the contract and secure the return of the deposit.

  2. #242
    http://tinyurl.com/2ag28z Front_Porch's Avatar
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    There is almost no way that someone 7 months pregnant could have gotten into new construction by their due date!

    It would be difficult to do that with anything but a pre-existing condo.

    ali r.
    {downtown broker}

  3. #243

    Default

    lofter, funny that you posted it. thats actually MY letter to the new york times! i am unsure if maintenance increases are material. are they?

  4. #244

    Default

    It all depends on the legal interpretation of 'material' in this case, and how interested the sponsor is in litigating with you, or letting you out of contract.

    Not being sent the amendments (particularly if you have requested them specifically) is an issue that strengthens your side of the argument.

  5. #245

    Default Buying new construction in NYC

    Great thread, thanks.
    My word of warning concerns "terms of use" of the building and ease of changing that.
    I live in Ireland and paid depost in May 06 with a finish date of mid-08 for a unit in Grammercy Green (23rd and 3rd). An Irish company (KMS Commercial) and their MD (Cathal McGinley) handled sales of a number of units in Ireland and (as far as I am aware) the developer was selling the balance. Developer waited too long to sell his units and couldn't when the market turned. He was then able to change the 'terms of use' of the building (from 'condo' to 'dormitory') and as a result he reneiged on the sales already in place.
    Deposits were returned (along with some interest they earned) but since there had been such a change in the value of $ -v- €, the loss on the deposit alone was significant. KMS said they would make up the difference but to date (6 months on) have not followed through on that and are not taking calls.
    The solicitors who reviewed the contracts claim they were not responsible for pointing out that clause in the contract. That said, they did (quickly) return the 'legal fees' which they had taken up front.
    Will not put me off trying to find a long-term investment in the city - it'll just make me more careful.
    Beware "terms of use" (and 'service' when things go wrong)

  6. #246

    Default reason for delays?

    Can anyone explain why a developer would delay the first round of closings while holding a TCO? The TCOs were obtained in time to provide 30 days notice and close on schedule- but now they seem to be waiting a month! what would cause this?

  7. #247
    http://tinyurl.com/2ag28z Front_Porch's Avatar
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    cash-flow considerations, most probably.

    It might be written into the developer's loan agreements that they have to pay back $X of their loan as they close Y units, so they're delaying their closing to delay that loan payment . ..

    ali r.
    {downtown broker}

  8. #248

    Default Remove the tub????

    I recently bought a new construction condo (West Chelsea, 1 bed, 1 1/2 baths) The tub was damaged and needs to be replaced..... but I'd like to replace it with a high-end shower. Will that effect the resale value -- to not have a tub???? Would I be making a big mistake???
    Last edited by Bjorndog; September 20th, 2008 at 09:54 AM.

  9. #249
    http://tinyurl.com/2ag28z Front_Porch's Avatar
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    Bjorndog, whether you want to replace your tub with a shower depends on who you think your next buyer is. In my experience, men tend to like luxurious showers.

    On the other hand, couples with young kids tend to like tubs -- it's more common to bathe a four-year-old than to stick him in the shower -- and women tend to like tubs (my hypothesis here is that it's easier to shave one's legs in the tub than in the shower).

    ali r.
    {downtown broker}

  10. #250

    Default

    Okay so I've read through this whole thread in the last few days and would like some feedback.

    Do you think new condo developers now, in 2009, will pay full closing costs?

  11. #251
    Banned Member
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    I'd highly recommend that you shoot a Private Message to Front_Porch. She one of our resident experts in the condo field.

  12. #252

    Default Percentage with Contracts Signed/Sold

    On new construction condos, are people actually getting banks to close and release funds at 50/51% or only 70% now?

  13. #253

    Default Duct cleaning??

    Does anyone have any recommendations on a duct cleaning company for new construction?

  14. #254

    Post Buying a new construction condo.

    Quote Originally Posted by Humla View Post
    Does anyone have any recommendations on a duct cleaning company.........
    Good to see this tread is still active: try this directory of listings from the BBB.

  15. #255
    NYC Aficionado from Oz Merry's Avatar
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    Tuesday, March 2, 2010, by Sara

    New to the Internets is Coopandcondo.com, one real estate lawyer's attempt to address co-op and condo buyers' questions. A difficult job, but somebody's gotta do it! Up so far are articles on the differences between co-ops and condos, the intricacies of closing costs, and how to avoid getting turned down by a co-op board. [Coopandcondo.com]

    http://curbed.com/archives/2010/03/0...s_releases.php

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