May 17, 2017 — Memo to apartment buyers: read the offering plan, and beware.
As a growing number of digital libraries make co-op and condo offering plans available online, the need for buyers to study these cumbersome documents becomes ever-more apparent.
Alvin Wasserman, director of asset management at Fairfield Properties, a management firm, reports that he has attended closings where buyers had never heard the term offering plan, which is the document that spells out all vital information about a co-op or condo building, including the developer/sponsor, engineering specifics, all facets of unit ownership, and the number and precise details of units. To remedy the situation, Wasserman advocates a state law requiring that a qualified attorney must review the offering plan before each sale, and the buyer must sign off that he or she has been made aware of the plan’s essential elements.
If such a law had been in place, it’s unlikely Marjorie Levine would now be in court, trying to get back her $1 million down payment on a $10.5 million Toll Brothers’ condo unit at 55 West 17th Street in Chelsea. Levine claims she was told by the selling agent that the finished ceilings in her under-construction apartment would be “just shy of 10 feet high tall” – high enough to accommodate her collection of large artworks. However, when Levine finally saw the offering plan and visited the apartment, she learned that the ceilings were not the promised height.
In other words: look at the offering plan before leaping into contract. But realize you still need to be careful. "Offering plans are chock-full of disclaimers, and will usually give a range of ceiling heights for all the units, not a specific height that's guaranteed for a specific apartment," attorney Jeffrey Reich, a partner at Schwartz Sladkus Reich Greenberg Atlas, tells Brick Underground. “Which is why it's important to have it in the contract, for instance, that the ceiling height has to be no less than 10 feet."
It all leads back to an ancient piece of advice: caveat emptor.
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