Wait a minute. You can buy property without a lawyer? Yes, that’s within your legal rights. But industry insiders say it’s nearly unheard of for a NYC real estate deal to go down without the involvement of a buyer’s attorney.
What your lawyer reviews
Before you sign a contract for that new apartment, your attorney should review several years’ worth of board meeting minutes. These minutes may provide clues to ongoing (and potentially) expensive problems in the building. If, for example, the building has an elevator that needs to be replaced or a bed bug infestation, or a roof that’s perpetually leaking, you may be faced with both inconvenience and a bill for your portion of the project.
Your lawyer will also review financial statements, as well as your offering plan, which includes details like bylaws and special risks of the project. Even in an older building, these documents can reveal information a potential buyer should be aware of.
“It’s not just about having legal representation at the closing,” said Craig Delsack, a Manhattan attorney specializing in real estate law. “A smart buyer will hire an experienced lawyer who does due diligence, negotiates the deal and then represents him at the closing.”
Delsack recalled a client whose offering plan included a clause that allowed for construction on an adjacent building that could result in the loss of courtyard windows – essentially turning legal two-bedrooms into one-bedroom units. Thanks to an attorney’s sharp eye, the client learned about the risk and was able to back out of the deal before it was too late.
“When it boils down to it, the buyer wants to buy a unit and the seller wants his money, so it’s the responsibility of the attorneys representing those parties to make it happen,” says Delsack.
What kind of attorney?
Attorneys who are experienced with real estate transactions are generally most pragmatic and Delsack cautions against “flat fee” attorneys who often make their real money off hefty title insurance commissions. It is unethical for a New York attorney to sell title insurance for a deal he’s negotiated.
To find a good real estate attorney, ask friends and colleagues for references. You may also want to visit the New York State Courts website to ensure any lawyers you’re considering hiring haven’t been subject to disciplinary action.
“Someone who’s very experienced with New York City real estate, maybe an apartment flipper, may decide to waive his right to legal representation. But for most people, I wouldn’t advise it,” said Delsack.
“This is the biggest purchase of your life. You’re going to be too far into it before you realize this was really something you shouldn’t have done on your own.”
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