Siblings Say Lawyer Missed Co-op Building's Red Flags

July 16, 2015 — A pair of siblings got a tough lesson in caveat emptor and the dog-eat-dog world of New York City real estate. Ten months ago, they bought a co-op and — despite having hired an attorney from a firm recommended by their broker — things haven't turned out quite how they imagined. "We’ve discovered several issues that we think he should have caught," they tell Brickunderground in this week's Ask An Expert. "Not long before we bought the apartment, the board had such serious disputes over elections that it did not meet or function for a while; the building’s roof needs substantial repairs (and did for at least a year before we purchased); and about six months before we purchased, a board member was removed for violating her fiduciary duty." Yikes. The siblings feel their lawyer should have discovered these types of issues and want to know whether they can get some of their money back. And it looks like it's going to be tough. Brickunderground says, "It's possible that your attorney did overlook key information and that you have grounds for a claim — and some reimbursement — here, but it'll be tough to turn up concrete proof, say our experts." The problem is figuring out whether the attorney ignored the information or whether it was simply not available in the paperwork he or she would have reviewed. "In representing a purchaser of a cooperative apartment, an attorney should review the cooperative offering plan, amendments thereto, at least two years of financial statements, as well as the board minutes going back at least three years," Brickunderground quotes Jeffrey S. Reich, a real estate attorney with Schwartz, Sladkus, Reich, Greenberg, Atlas LLP. "However, even performing proper due diligence may not have turned the writer’s attorney on to the stated issues unless they were disclosed in the board minutes, a footnote to the financial statements or an amendment to the cooperative offering plan." Even then, however, it "might be tough to quantify the difference between what you paid for the apartment, and what you would have paid had the building's problems been disclosed." There may be no recourse in this case, which may seem unfair, but that's how New York City rolls.