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I'm looking at a unit in a co-op building that needs to be gutted. Broker (seller's) says co-op board is lenient and won't have a problem with renovations, including moving kitchen and baths. However, he's already told me one blatant lie, so I don't trust a word he says. How can I verify his claim before making a bid?
call the management company. no reason they should lie.
I agree with ues,
Most management companies will help you, some will not. Do you know who the management company is? I have worked in many of the bigger management companies buildings.
The bad news is this: most buildings will NOT allow you to move kitchen and bathrooms. They do not like owners going wet over dry and it might also come down to who the buildings engineer is.
I would say I am allowed to move kitchens and bathrooms in only 5%of the projects I work on.
flarf: There are MANY reasons why a mangt.company will lie.
They get hired to help the Board harass owners/renters. Try to force them to flee the Building. One blatant lie is all you need to figure out what lies ahead.
Primer, and ues_shopper: Please: I like you, but if you don't have personal experience as an owner, you obviously have no idea of how the mangt.co. could be in collusion with the Board.
everyone is out to get you. run.
I would insist on being put in touch with whoever in building most recently renovated and the last people to move kitchen and/or bath. Then ask them about their experiences. That's a start. You are looking at very unusual type of renovation and would want solid assurances they are possible if not being able to move the wet areas is a deal buster for you. If no one has moved wet areas in last years, for all you know the policy has changed and past projects cannot be relied upon as evidence that yours will be approved.
Also, given your particular situation, you may ask to speak with a board member about your general concerns. Worse they can say is no. And if all this turns everyone off to you, better you know now than later when you'll be a real hassle by virtue of the extensive reno.
Yeah, why not ask the board?
kylewest and hunter: Yes. Why not? Just ask in writing and via email.
and then sue them.
Look at filings with DOB.
Yes. Go onto the DOB website. Enter the address.
Specify in writing that the sale is conditional on the board's approval of the renovations.
Ask the agent if he'd mind putting his commission in an escrow account which would be paid out only upon your board approved renovations and that any initial board rejection would allow you to keep the money. If the agent doesn't think the renovations are a problem, he shouldn't have a problem with that set-up.
wavedeva and Goldie: Good suggestions.
I like you as well but could you tell me what information I said is wrong? I usually have to speak to all the management companies, I am the one that usually submits the scope of work that does or does not get approved.
If you ge tthe alteration agreement it might say you cant do wet over dry, I am not understanding where you are coming from, I didnt say 100% anything.
Why does it matter if I am an owner who purchased one apartment or a person that has worked on several projects with different management companies, wouldnt i actually have more experience then the "homeowner"?
"Specify in writing that the sale is conditional on the board's approval of the renovations."
This isn't a practical suggestion. The board probably will not entertain an alteration application from a non-shareholder. You'll have to own the apartment first. Once you do, you cannot unwind the sale (it would be a fiasco). Also, look at what must be done before you'll know if the reno can go forward: your hire an architect to get the plans drawn, they are submitted for review by building engineer who goes back and forth with architect tweaking plans until engineer issues recommendation to board; the board then considers and votes on reno; if approved city permits must be sought (what good is the project if the city doesn't agree to issue permits). This is TIME CONSUMING. Probably a minimum of 2 months and that is quite optimistic. I closed on a jr-four in mid July and had as many ducks in a row as possible for a full reno. I was a lunatic all over the process moving it forward. A hammer was not swung until Thanksgiving: 4 months. The process took 3 months from closing to get to the point where city permits were in hand. And this was with hyper vigilance. So the prospect of getting that all done prior to closing is just completely unrealistic. Bottom line: the board is not going to entertain all this prior to you closing in all likelihood, even if they were it would be a many month process that would mess up loan agreement rate lock periods and unduly hold up closing, and it would be expensive, and you still would need to know if city would approve plans.
No agent would agree to escrow anything either (I surmise this was a facetious suggestion). An agent will not stake a commission on your competently handling the reno application process. They have no idea of the quality of your architect or your ability to manage to reno and if you mess it up, they should lose their commission? Its not legally realistic--it is a potential litigation mess and no agency would or should go in for this.
I love the idea of looking up prior city filings to see what you can glean from the scope of work in prior renovations.
check board minutes for discussion and approval of renovation apps
also most decent buildings have renovation policies--inquire as to what those are and make clear that when you meet with the board you will further inquire--seller wont risk the waste of time getting all the way to the board, then having deal fall through base on renovation issue lies
put a clause in the contract: "seller has indicated board policy on gut renovation as would apply to this apt is as follows:..."
this lets the buyer know he risks losing the sale if he's lying
ignore truth, a well-known duth
If it is possible you should try to find out who the engineer of the building is. You should be able to get that form the super. The board usually gets their info from the engineer and what he says normally goes. He also would know what other projects in the building have been approved.
It might not be easy getting all this info but can be done, keep in mind that whatever anyone tells you it still might be rejected. With any apt you wouldbuying you should have in the back of your mind that all fixtures (bathroom and kitchen) might have to stay where they are.
I cant tell you how many bathrooms we were not even allowed to move the toliet one inch
Thanks for the ideas. I did some digging on ACRIS and DOB; it looks like the co-op board president purchased an adjacent unit about three years ago and did extensive renovations at that time, including a bathroom addition.
The most recent work was just over a year ago, when another tenant also purchased an adjacent unit. However, no bathroom additions there, just a removal.
I'll try to speak with those two people first. Might as well start with them and then move onto the management company. Thanks again.
"put a clause in the contract: "seller has indicated board policy on gut renovation as would apply to this apt is as follows:..."
Putting this in a contract is meaningless. So what that the seller has "indicated" xyz. Legally that means virtually nothing. What if the seller believed the "indication" to be true? Or was misinformed by others? Or made the representation but the policy changed before, during or subsequent to the signing? What is the remedy? Is the term material, severable? This is unworkable.
Agree that best to due all the diligent info gathering possible which has already been discussed above. Also agree that making clear to the seller that you will raise this with the board is a good idea. And I would be completely upfront with the board. If they know you want to undergo a reno they have no intention of allowing, they aren't going to want to expose themselves to any litigation or headaches by approving you and then denying you--at least most rational boards would feel this way.
Do your due diligence and be up front with everyone about your plans...PRIOR to signing, and after.
A friend of mine once got the seller to agree to submitting his plans to the managing agent prior to closing. The plans were approved and survived the sale, and my friend was able to start renovating immediately post-close.
A few very major caveats:
1) The sale was not conditional upon approval, just plan submission
2) Even plan submission caused heartburn for the seller's attorney - they feared an anticipated renovation might jeopardize the coop board's approval of the sale (it did not, the building had a reasonable board who understood that any purchaser would need to renovate this particular unit).
3) As kylewest has said, all of this takes a lot of time. In this instance, the scheduled closing was a few months after signing as the seller needed to stay in the city a few more months, and so there was plenty of time for the approval process.
4) The renovation did not involve moving wet spaces
I love how people assume that you can (and should) get any agent's representation written into your contract - it's just not that simple. Even if the board did allow movement of wet spaces, there's no guarantee that the buyer's renovation plans would be approved (what if the plans also included the installation of a pyrotechnics arena and a bathing station for elephants), and no lawyer would allow their seller to be exposed should the buyer's plans be rejected or materially altered.
I would speak with the managing agent. I'm not sure why the managing agent would lie, as truth suggested. If they tell you that the movement of wet spaces is typically not allowed, that should be a very good indication...
disagree kyle--if the board, at the meeting with prospective buyer, states reno policy to be very different than that represented by seller and described in contract, buyer can not close
if seller were lying re reno policy, they wouldn't sign such a contract
obviously all due dilly possible should be done independent of seller and brokers, call managing agt, look for evidence of prior reno's via bldg pmts, speak to owners (if poss) who have renovated
Please do not pay any attention to what the board president does in his apartment. I have seen time and time again they get special treatment. Just because he added a bathroom does not mean they will let you
Wbottom, I don't think it's in either the buyer or seller's best interest to be discussing renovation policies at the meeting, especially when the point in question is the movement of wet spaces which even if permitted is less than ideal...
Buster, why is it less than ideal?
The sizes, including my own of manhattan bathrooms are a joke. If you are able to enlarge your bathroom thats great. If done correctly with the right waterproofing installation you should never have a problem
Primer05, I meant it's less than ideal from the board's perspective. There is a perception that moving/enlarging wet spaces can create problems. You can debate the accuracy of that perception, but it exists which is why most co-ops don't permit them. And even if they do, they are probably considered less than ideal renovations.
In other words, if the buyer/seller want the deal to go through, they probably shouldn't use the board interview as the place to bring up a complicated and potentially messy renovation (even it's allowed). Especially if one of the board members lives underneath the unit in question.
buster: I don't get your point at all. If the board would be hostile to the idea during an interview, they surely would be hostile to the idea later when proposed with an alteration application. That same board member with a bedroom under what the buyer will make a bathroom is going to take issue with the reno later. No one wants to hear a toilet flushing over his bed. What possible advantage do you gain as a buyer by not raising your reno plans at the interview? Now, if the reno particulars are not deal-busters for the buyer and the buyer doesn't mind not being able to do certain things, then I see why the interview isn't the time to really go into the nitty gritty of a reno. But If the reno kitchen/bath expansion is material to the buyers and they don't want the apartment without such reno, then why on earth would they stay mum about it when meeting the board? I just don't get the strategic purpose or logic of your suggestion.
It's pretty simple. Boards and residents are never thrilled with renovations even though they are a necessary fact of life and can be good for the building once completed.
So if the board interviewed someone who wanted to do an extensive reno with unnecessary complications like moving wet space, there's risk they might not approve the sale. After all, the next candidate might propose a simpler renovation or maybe none at all. Is the risk big? It depends on a number of factors, but it exists. Common sense dictates that a buyer should get approval and close before they go proposing any renovation, let alone one that is potentially controversial. Even if moving wet spaces has been allowed in the past. Any decent agent would advise this - your board interview is not the right place for this! Even if it's clear that the unit in question is in estate condition, and the board brings it up, you want to minimize the work you are considering. Close on the unit first.
Buster, I agree with you based on this explanation PROVIDED HOWEVER that the buyer still wants the apartment if the board later refuses to approve the precise renovations the buyer applied for. In other words, if the buyer wants the place regardless of what the board approves, then I agree that an interview is not necessarily the time to discuss the reno.
Here, however, that does not seem to be what the OP's position is. Here, the OP wants to do something fairly unusual and if it cannot be done the OP seems to not want the apartment. Under these circumstances, were the OP to take the tack you suggest, the OP would be stuck with a unit the OP does not want if the board declines to approve the wet-over-dry plan. Under these circumstances, the OP has everything to lose at enormous cost. If this is not the apt for the OP, best find that out before shelling out oodles of money to buy the place!
If approval of specific alterations is a necessity for a buyer to want to own a place, your advice would potentially leave the buyer in a terrible position. No? If the buyer were instead to raise the issue at the interview and after doing all due diligence possible prior to signing the contract, and this somehow scuttled board approval of the purchase, isn't the buyer better off this way?
i know well that one wants to avoid introducing discussions of circumstances that might traoble a board but, if an apartemtn is in need of a gut renovation, the board has to expect some inquiry re bldg renovation policies
and the board con't be shocked that someone buying an apt in such condition, who will have to renovate, would want to base their plans to renovate on verbal assurances of seller or scumbroker as to what policies are
i would include representations made by seller and scumbroker in the contract and, very graciously confirm the condition of apt and required renovation with the board, and inquire re building policies (which vary widely)
to tiptoe around the friggin board to the extent of being afraid to inquire ast meeting re bldg renovation policies, for an apt that needs a gut, is absurd
woops would NOT want to base plans.......
Kylewest - my original comment was intended to show why Wbottom's proposed construct was not workable from either the buyer or seller's perspective. As I suggested before, if the OP wants to do an unusual renovation, they should make sure they can before they enter into contract. The managing agent should be able to inform them of the rules regarding wet spaces. You wouldn't waste time, money, and effort entering into a contract and making it contingent on the Board confirming that it is something you can do - that's in neither the buyer nor the seller's best interest.
Additionally, even if the buyer confirms with the managing agent that moving wet space is permitted, I would advise against trying to confirm this with the board during the interview. Even if it is to make extra-extra-certain that they can do it, and even if the buyer wouldn't otherwise want the apartment. Once you have closed, you can propose your renovation. As long as it's within the rules, you should be able to get it approved, especially if the process is fully or mainly governed by the managing agent. Even if the board rejects it, you have the ability to go back and forth, and even if it's ultimately rejected because you refuse to compromise on something, as a shareholder, you have recourse. As an applicant, you have no recourse from a rejection - game over. I think it's much easier to get something done once you have your foot in the door. I've known some renovation proposals containing unorthodox elements that were actually outside of the rules of co-op boards that were ultimately resolved without too much pain, so I don't see why something within the rules would be terribly problematic. Once you have closed.
Wbottom, tiptoing around "the friggin" board" may bruise your ego, but it's worth it if you get your way.
Buster, we'll have to just disagree on this one--strongly disagree. Few coops have per se "rules" they write down about renovations. No coops with which I am familiar let the managing agent dictate squat about renovations. Granted, I am more familiar with mid-higher end coops so if the practice is different with others, I defer on that. And here, wet over dry is a BIG BIG BIG deal. It is far outside ordinary renovation practices. There is nothing to compromise on. If it is not allowed, the building will be firm on this. There is no negotiation on this in 95%+ of Manh coops. A buyer will be in no better position getting a wet over dry post-sale if they forebear discussing it with the board during the interview. No matter what the due diligence shows, I would counsel raising it during the interview. The downside risk is too onerous: owning an apartment you don't want when the reno is denied. The downside of being rejected by the board is a couple weeks time, distasteful but manageable loss of some $$ for application fees, attorney, and misc, and the aggravation of putting together a board package and going through the process. These things pale in comparison to owning a place you don't want. You paint the risk of losing the place as somehow being very substantial, whereas I believe it is completely outweighed by the utterly disproportionate risk of owning a very expensive apartment (any apartment no matter the cost is expensive) that you don't want. I think your logic fails and your articulation of the behavior of boards, managing agents and engineers along with how they interact in the real world of Manh RE is deeply off here. I know you disagree--no one thinks their own opinion is wrong--so that is why we will just be on opposite sides of this one.
I agree with 90% of what you post, however, I think this is all something you can confirm with the managing agent and building engineer prior to signing and prior to the board interview. They know what is allowed and not allowed on "BIG BIG BIG" deals like wet space, washer driers, and central air and should be able to tell you whether or not it's a fixed rule or even likely to pass muster. Confirmation by the board during your interview isn't something you would try to build into a contract - not only would the seller's attorney never allow it, it wouldn't make much sense for a buyer to do this when it is something they should be able to easily confirm prior to signing.
Now, if you have confirmed that this is something that is either hard and fast allowed or has recently been allowed on a case-by-case basis, I still wouldn't ask the board during an interview. It allows them to opine on something before it's been fully fleshed out. Yes, you might get rejected by the board, but the risk of that varies, and what if they approve the sale? They've already rejected your renovation and will never approve it until you revise. I think it's less risky to get approved for the sale, and then work with the building engineer and submit, than it is to prematurely submit it without proper thought and expertise. But that's just what I would do. While I've done a pretty extensive renovation, I've never done a true, full-on gut, but I am in a building that is quite strict on well, everything, and have been surprised by some of the flexibility regarding renovations. Who knows, maybe I do live in Disneyland.
the apt requires a gut job--the board will not be surprised when buyer inquires re possibilities
I think most of you are right. It comes down to one very simple thing:
Will the building let you do wet over dry?
I would say (I must have done about 100 renovations in NYC) that they do NOT usually allow wet over dry. Maybe in 5% of the buildings I have worked in.
Primer's estimate is the same as mine in terms of how few buildings permit the type of alternations the OP contemplates.
A significant issue is that regardless of what the managing agent and engineer say (if you can even speak to the engineer--and I'll get to that in a moment), is that boards change and their positions change along with their composition of officers. My building permitted a bathroom expansion within 2 yrs prior to my buying and if I'd relied on this I'd have been very mistaken about my prospects. Due to many concerns that arose after that alteration, the board realized it was far more prudent to require current wet footprints to be maintained and no longer permit any alterations. It would have been a disaster for me to base buying decisions on the managing agents', realators', and sellers' truthful representations that wet-over-dry had been permitted in my building. For me, this was incidental to a gut renovation I contemplated so it didn't make a difference (all I was considering was including a closet in the bathroom that is currently space outside the bathroom).
As for conferring with the engineer, these people do not just chat for free. They aren't going to typically offer answers over the phone. They want to see plans of what you contemplate and to offer official opinions--not off the cuff guesses about your plans. They also charge. Usually a minimum of $350/hr and they bill in .5 hr. or full hour increments. They won't be giving away their advice for free. If a coop retains an engineer (there are a handful who represent all NYC coops basically--its a very small community), the last thing the engineer wants to do is speak to a prospective buyer and offer counsel that will scuttle a sale. How can that possibly end well for the engineer? The seller is furious, screams at the board, the board tells the engineer he is retained by the building and is not free to meddle in building affairs ... It devolves into a mess. This is why I say it is not practical in the real world to just chat with an engineer for a coop you are thinking about buying. That's fantasy land. There may be an exceptional situation someone can point to contrary to what I've said, but relying on exceptions when making expensive decisions is silly. Better to rely on the overwhelmingly common rule and practices.
I think we've tapped out this subject. And for a change it remained fairly on point and involved no personal attacks or silliness. Kudos for us.
Kudos indeed!!! And as usual Kylewest keeps it on subject, offers excellent advice and keeps it friendly.
You guys are welcome (for me not jumping on this and turning it into NYC RE at $500psf, which it will, I guarantee it. I'm not only the president, I'm also a client).... I can't stand these renovation topics. It's like listening to my wife ask me which shade of pink for my daughter's new ski jacket. I pretend to be interested so I can get some later....
You guys have at it. : )
thank god the thread got some fing humor