Fri. News Roundup: Unit-Owners Sue 170 East End, Cheap Apts Helping Manhattan Recover, and "Beeing" Good in Brooklyn

As reported in The Real Deal , five buyers have sued sponsor Skyline Developers, which the magazine describes as a subsidiary of the New Jersey-based Garden Homes Development and whose principal is Orin Wilf. Two of the lawsuits also name the condo's marketing company, Corcoran Sunshine. Neither the developer nor the marketer would comment to the magazine.

One suit, regarding a $2.15 million unit that closed in April 2008, seeks to limit the number of hours the garage is in operation at night, rescind their purchase agreement and be paid damages and legal fees. Another alleges the developer did not cure mechanical problems in a $7.25 million unit scheduled to close in December 2008, and also seeks to have the contract revoked, deposit returned and damages and legal fees paid.

Others, involving apartments selling for as high as $8.4 million unit, claim "fraudulent" behavior by the developer, and a "bait and switch," because a unit's ceiling height was lower than specified in the offering plan.

When the condo's board of directors eventually forms, as required by law, it may find that the newly formed condo association, rather than the developer, could be forced to pay for corrections, as nearly happened to one board in this instructive case study.

Affordable Apartments Sparking Manhattan Comeback

April 10, 2009 — The high-end is hurting — The New York Times reported yesterday that are are 350 Manhattan apartments and townhouses for sale at $10 million or more, and that they aren't selling, boo hoo. That's our "boo hoo," not the Times' — because what with such high-priced inventory pulling the statistics skyward; with the newspaper reporting that Manhattan co-op and condo sales are down nearly 60 percent in first-quarter 2009 from first-quarter 2008; and with average co-op prices down 24 percent in that same period, there's a segment that's actually snatching up homes: Middle-class people!

Or, well, middle- and upper-middle. As Diane Ramirez, president of Halstead Property, told CNNMoney.com, the borough is beginning to recover through first-time, low- to mid-level buyers of apartments selling for $1.5 million or less. "There are a lot of buyers [in that range] who had been priced out of the market and who are making sure they get in this time," she told the website, using as an example a 40something woman who could previously find nothing affordable above a studio. Now, says Ramirez, "she bought a one bedroom and she's absolutely delighted."

Or as Pamela Liebman, president and CEO of the Corcoran Group, told CNNMoney, "The silver lining is that people can move to Manhattan again." Whatever happens among the sky-high, this is promising news for the normal-priced co-ops and condos that most of us live in, suggesting that at this end, apartment sales won't be stagnant, and things like flip-tax revenue and move-in fees won't simply dry up.

Bee Good? Here's the Buzz

April 10, 2009 — First, we apologize for those very obvious, bee-related puns in the headline. But it's nearly 4:30 on a Friday afternoon, and we've been newsgathering and reinterpreting / analyzing for board use all day. So spare us your "stings" and arrows. Hah!

A woman writes today in ApartmentTherapy.com that she's begun cultivating a beehive on the roof of her building, after having taken a 12-hour apiary class with the New York City Beekeepers Association. The idea is that with other Americans following Michele Obama's lead and planting the modern-day equivalent of Victory Gardens, bees represent a low-impact, small-space form of food creation that also helps the environment by promoting pollination of flowers and other local flora.

Before your board starts discussing whether to allow this as a rooftop or backyard amenity,know that the perhaps overly broad Article 161.01 of the New York City Public Health Code places bees in the same category as lions, tigers and bears, among other wildlife illegal to keep in the city. City Council member David Yassky, of Brooklyn, however, supports legislation to legalize beekeeping. There's even an online petition: "Legalize Beekeeping in NYC."

Whether you're for or against the practice — and anaphylactic shock is a genuine allergic concern where bee stings are involved — boards should be aware that some residents may want to create some form of garden on the property, whether through bees or beets. Handled properly, this could be a free-labor beautification project that enhances not just property values but also the quality of life of interested, often senior, residents. Or it could all wind up a big, steaming pile of compost. Whatever the case, gardening and related efforts are in the air, and it's good to make thoughtful policy ahead of time.

More Rent-to-Buy

April 10, 2009 — As we and New York Post blogger Max Gross wrote last week, Manor Properties Group, developer of The Dover condominium in Harlem, has come up with a rent-to-buy option, in which prospective buyers put down a small, refundable deposit on the asking price of an apartment; rent the place, with a portion of the rent going into that deposit's escrow account; and then after a year using the accumulated escrow amount as a down payment (with Manor, in this case, absorbing the closing costs).

Now this new model, which may help keep your own strapped shareholders or unit-owners from missing monthly payments or foreclosing because they couldn't find a buyer in time, is being tested at at least one other place by at least one other party. The New York Times reported yesterday that Rockrose Development is doing a similar rent-to-buy program at 99 John Street in lower Manhattan, where the corporation is converting a 27-story, prewar Art Deco rental building into condo units. The company is even offering to buy back units at 110 percent of the purchase price after five years.

Done cautiously — perhaps with one apartment as a see-how-it-goes thing — allowing rent-to-buy might be one more creative tool in a board's toolbox.