Do Co-op and Condo Buyers Need a Home Inspection?

A home inspection by the buyer of a co-op or condo apartment in New York City isn't standard practice, according to experts convened by Brick Underground. Unlike a townhouse or a single-family home, where things like the boiler and the integrity of the facade are the owner's responsibility, in a co-op or condo, the systems that service an entire building are the shared responsibility of all the apartment owners and are overseen by the board. 

Dean Roberts, a member at the law firm Norris McLaughlin, says in most cases it's neither typical nor cost effective to have a co-op home inspection. "A better course of action," he says, "is to review the board minutes and the accounting statements to see if there is an organized plan for maintenance and the upgrade of building systems."

For example, he says, you'll want to see that the building has a reserve account and is conducting capital-project assessments for the building. 

A reserve fund is the money a board sets aside for unforeseeable expenses, as when the roof starts leaking or the boiler suddenly fails. A well-run building has at least three months of carrying costs in reserve for such emergencies. Of course, the goal is to avoid emergency repairs so that's why you also want to see capital investments over time. For example, with the help of your attorney you can check to see if the building is investing in elevator modernization or energy-efficiency initiatives. The latter is important for buildings to comply with Local Law 97, which will begin setting caps on building carbon emissions in 2024. 

"When reviewing a co-op purchase, I often ask the managing agent for the last engineering report for the building," Roberts says, noting that a building with a low reserve account and no planned or recently completed capital projects usually indicates a board is not spending necessary money on building maintenance.

Bianca D'Alessio, a broker at Nest Seekers International, says an attorney's due diligence, which includes access to board meeting minutes and a questionnaire from the managing agent, provides the most comprehensive insight into the structural components of the building. 

So skipping the home inspection for a co-op doesn't present a major risk — as long as the buyer is doing adequate due diligence and finding the relevant information elsewhere.