1st time buyer questions

I would never accept that situation, with even one of those three points.

I assume this building is 5SL in LIC?

I think all three are warning signs that there is something wrong and that the sponsor has something to hide. Your concern is justified, and your lawyer is earning her or his keep by pointing them out. Of the three, the third bothers me the least (waiving a jury at trial). Contracting parties agree to such clauses, mostly because one or more parties do not want to subject themselves to the risk, delay and cost of a jury trial (having the belief that a judge can resolve the issue in a more expeditious and efficient manner). Judges, however, are not generally as prone to the "sympathy" factor, however, and many plaintiffs (buyers) do well in front of a jury for this reason. Do your homework and have your lawyer demand transparency! This is your investment. Good luck.

Alan, thanks - I guess I just can't believe they are actually selling the condos with these issues. Why would we be the only ones concerned with this??

CarolSt - nope, not 5SL, but you are warm!

John8715 - appreciate it, the jury thing was the lowest on the list, and our lawyer is doing a great job, agreed!

If the development was sold pre-construction prior to the RE market falling apart (although that was quite a while ago at this point), the buy-anything feeding-frenzy gave developers the ability to force these kinds of clauses on buyers. Not anymore.

1. waiver of right to trial by jury is standard contract provision with no real significance
2. board minutes are generally irrelevant: everything or almost everything you could want to know
is contained in annual reports and financial statements which by law must be given to you

3. prohibition v. vomplaints to media mat be illegal because it conflicts with the 1st amendment

rb345: Many types of contractual agreements contain confidentiality agreements. There is frequently no conflict with the 1st amendment for private parties to agree that certain discussions are confidential.

There may be whistleblower laws that prohibit certain types of confidentiality agreements, but I'm not particularly familiar with them.

i think these provisions might just be preemptive protection of corporate interests, not necessarily that they are hiding something. On the same token, in this market, the developer would be foolhardy to allow these provisions to sink a deal. i think your lawyer should push harder, or find some sort of middle ground. (ie., no material disclosure w/out prior notice to developer.. or something).

its 85% sold, but did closings start yet? Is there even a board? I assume closings did start and there is an independant board right now? correct?

Agree our lawyer should keep pushing. He is going to raise our concerns up, and if they don't take us seriously, then we'll just walk and pick up the hunt again. It is sad because all the new construction starts to look alike and this unit really stood out above the rest. At the end of the day, we'll be better off if we felt really comfortable with our investment.

Urbandigs - 85% sold, and there are people living in the building currently, which I think is why I am so confused that our lawyer is concerned. I guess our lawyer is awesome. :)

LICRenter, every contractual clause has "significance" and a waiver of the right to trial by jury is not a "standard" contractual clause, although it is common. While (hopefully) the chances of litigation are small and it will never be an issue, if you did find yourself in a litigation such a waiver has huge significance. By agreeing, you are foregoing your procedural rights to a jury trial, which could possibly have a very real substantive impact on the outcome of the dispute. If you feel comfortable with the deal, you may very well decide it is not a big deal and not something worth fighting about. Discuss with your lawyer and good luck!

Also, re: confidentiality clauses, they are also common between contracting private parties and in most circumstances, would not raise first amendment issues. However, they are appropriate generally when the disclosure of certain non-public information would result in a competitive disadvantage to one or more of the parties. In the context of a simple condo purchase, you have to ask yourself....what information might you learn through the transaction that the sponsor is so concerned about? Red flag, in my opinion. Good luck!

People who buy in new developments in normal times don't get the benefit of board minutes since buildings sell out before the first board meeting. Did your lawyer explain to you that asking a sponsor for board minutes is unusual and only possible because of these slow selling times?

I am in the process of buying a new development. When I read through the condo plan it clearly stated that a condo board would be created 120 days after the first closing. I assume this is probably pretty standard as closings take place over time and it gives everyone a chance to express their desire to sit on the condo board.

When did people start to move in? If they just started you are not going to find any board minutes as everything that is a policy in the condo is spelled out in the offering plan. First thing he would have done is read the offering plan to see what policies were there and all info about the board is there.

Ephraim2:

1. not disclosing nmn-public info is one matter
2. being prohibited from complaining to the media about post-contract behavior is another
3.t he first serves many valid social purposes
4. the latter is inconsistent with public policy

licrenter - I have over 20 offering plans in my office for new developments. I randomly picked up a few and your concerns are addressed in every one I saw. It seems to be pretty common. As far as the board minutes, I dont know such a thing would be available if the sponsor still controls the board. You have the offering plan and any amendments. Just my thoughts. sunny.hong@bankofamerica.com

MikeV: We do know the board has met, and this is where the issue comes in. The details of the board taking over from the sponsor are outlined in the offering plan. First, our atty was told there were minutes, and he took time out of his day to go review them, then no one knew why he was there and then said there weren't minutes. The sponsor's atty then said there should be minutes, and he would check. The next bit of info from the sponsor's atty was that he didn't think the minutes did exist. It's just strange. Obviously, the issue isn't necessarily the minutes, but more the fact that no one really knows if there are minutes, or if there aren't. This is about general incompetence.

shong: thanks and that certainly helps. the sponsor no longer controls the board, but the atty can't seem to even put us in contact with who is running the board!

In any case, our atty has countered with our amendments and at this time we are waiting to hear back from the sponsor's atty on said amendments. If they come through with meeting in the middle, the problem could be solved. We feel like we need to get this wrapped up quickly, and I assume the sponsor does as well, so hopefully we'll come to an agreement. Crossing fingers.