Caveat Emptor
July 27, 2016 — Apartment buyers – not co-op boards – must police the accuracy of apartment listings.
At a co-op in Canarsie, Brooklyn, apartment sellers frequently make misleading statements in their listings – claiming that the building allows sublets, which it does not, or that the buyer could build a rooftop addition, which is forbidden. One shareholder poses this question to the Ask Real Estate column in the New York Times: Is a co-op board obligated to set the record straight before an offer is made?
The short answer: No. Instead of policing real estate listings for inaccuracies, boards should evaluate how the building disseminates information to brokers and shareholders. Brokers usually get their listing information from managing agents, says Frances Katzen, an associate broker for Douglas Elliman Real Estate, and managers sometimes muddy the process by charging sellers for the paperwork, taking a long time to provide it, or giving out inaccurate information.
“The buyer needs to figure this out before you’re in contract,” says attorney Pierre Debbas, a partner at Romer Debbas. The buyer’s lawyer is supposed to make sure the listing is accurate, and the buyer could sue the lawyer for failing to perform due diligence.
The board can help prevent misunderstandings by giving copies of the house rules and policies to buyers when they close on an apartment. Two words to the wise: buyer beware.