‘Interview’ questions for a RE Attorney

Tell us about the last few times that you represented the buyer and the seller tried to screw your client. How did you handle it?

With so many attorney’s out there, it’s imperative to choose someone who specializes in real estate, and not in personal injury, finance, litigation, etc. After-all, everybody in the city know's of an attorney that specializes in something.

Ask about extra time for fee's, if they charge at contract signing or all up front, if they take a retainer and if so under what circumstances are they non / refundable. Ask the attorney about their background and experience in the type of transaction you’re looking for and see if you are comfortable with the attorney’s approach and whether or not you have a rapport with the attorney. Assess their response time and feel them out a little. Chances are, if they are slow to response, it's probably not going to get any faster.

Go with the one that you feel you are most comfortable talking to. I always advise my buyers and sellers, that it’s in their best interests to have the best legal representation they can afford. (especially since it’s probably going to be one of their larger transactions w/in their lifetime)

good luck!

Well said. You should always chose an atty who specializes in real estate in NYC. You usually get what you pay for so don't look to save $100-$300 in such a big transaction in your life. Go with the one who is quick to respond and the one you have a good vibe about. If you need suggestions, just ask.

Don't go with the cheapest attorney. You will either get someone who spends the minimum amount of time your file requires because "it doesn't pay" or you will get someone who will glance at your contract and have paralegals or secretaries handle your file from then on. A decent attorney who will spend the necessary time on your file will charge anywhere from $2,000 on up. I have seen plenty of the cheap attorneys say "I don't care, they aren't paying me enough to care" when issues arise (and they always do). An average transaction from contract, due diligence and attending the closing will require upwards of 10 hours of work. If you are paying $1,200, do the math - your attorney is not making any money on your deal and if something out of the norm comes up, you will regret getting a bargain basement attorney.

Questions to ask before you hire: 1) What else do you do? -- if they answer personal injury stay away, they are the cowboys of the legal profession and are notorious for sloppy work in other areas; 2) Will you work on my file and attend the closing or will my file be handled by your secretary/paralegal/first year associate? -- Make sure you are comfortable with whatever the answer is; 3) Does your fee include due diligence and what exactly will you do for due diligence? -- If you are buying a coop, the attorney should physically go to the managing agent's office and read the minutes for the building for at least the 4 years, if the building is less than 5 years old, he should read the offering plan, he should read the financials for the past 2 years minimum and make sure that the building is solid and that you aren't looking at any big maintenance increases/assessments in the near future (Local Law 11 work is expensive and could be coming up for the building and underlying mortgages and land leases are always things you want to watch out for), he should send a questionnaire to the managing agent inquiring about the status of the building's reserve fund and percentage of owner occupied units which can affect your financing options among other things; and 4) make sure they reply to you in a timely manner.

Also, I wouldn't just take whatever attorney your broker recommends. Brokers and attorneys can have pretty complicated relationships. I have seen attorneys do things that border on malpractice just to get the client to sign the contract/close because the broker is pressuring the attorney and the attorney doesn't want to piss off the broker because then the referrals will stop. One broker can be 25% of an attorney's referral source, that is a huge source that the attorney will be really scared of upsetting. It's probably best to avoid hiring someone who may have mixed allegiances. Your broker brought the deal together, let your attorney independently verify if it is a good deal for you and get you the best deal possible without being pressured to cut corners to appease his revenue source.

Questions I would ask:

1. is the atty comfortable with and experienced in reading coop financials
2. do they have standard contract riders they use in a separate file
3. how many days will it take to review and return a contract with appropriate riders

4. almost every significant issue regarding a Coop can be learned from reading its financials
5. time in returning a contract is crucial: every day of delay increases your misery - and odds of
losing the deal

6. I would avoid attys who read coop board minutes: unless you're into voyeurism, they're
almost always a waste of time and money, and add significant time delays: see point #5 above

7. dont be bufaloed by crap about getting what you pay for
8. expensive lawyers often do a poor job, and cheaper ones often a better one
9. look for someone who seems to personally care about other people
10. and also who answers and returns calls and e-mails promptly: see point #5 above

that's funny, rb, I would demand an atty who reads board minutes. But your #4 does raise:

11. Is this atty going to explain the building financials to you? (it's okay if they don't, if your broker does, but someone on your team should. A careful reading with a bit of teaching you what to look for should take maybe an hour over coffee, but in my experience, it's one of the things first-time buyers find most helpful)

12. Who handles the documents and how? Are rider changes going to be made by a paralegal, or by the atty? If a piece of paper needs to cross to the other side, is it going by PDF? by messenger?

13. If there's, say, a leak discovered which causes an extra point of negotiation, who undertakes that negotiation, the atty or the broker? If the atty, is the atty going to charge extra for it?

14. When will they not be available? Religious observance/holidays/vacations/a personal life are completely acceptable, but first-timers tend to get thrown when they can't get "their person" -- so what are the attys blackout days? If there's something on the level of a death in the family, who steps into the attys shoes?

15. What's the typical level of communication between the atty and the broker on a deal? Good brokers will run a transaction; try not to get an atty who hates that.

ali r.
DG Neary Realty (& an attys kid)

Ali:

1. I have reviewed hundreds of coops and coop plans, never reviewed board
minutes, and never regretted failing to do so. After reading the finan-
cials a competent attorney should know what to ask about and what to
provide for in Riders. All important facts should be represented in
writing by the Seller, if only in contract Riders.

2. most brokers arent knowledgeable enough to extract all important info
from coop financials. And many wont admit what they do know for obvious
reasons, particularly seller's brokers.

3. my purchasing contracts provide for payment of seller's monthly charges
and possibly interest on balance of contract price if closing date is not
met, and a good lawyer should consider and explain to a client why that is
often beneficial to a buyer.

Since most RE lawyers charge a flat fee for this type of work, I don't see the benefit in not having a lawyer read the minutes. While most major issues would be found in a building's financials, some things that may affect the buyer would not - e.g. complaints about pet next door.

I would think someone should be reading minutes. If they are discussing potential house rule changes, capital projects that may require an assessment, etc.

Why get into a situation where you are told nothing is occuring that will cause an assessment, since that is the knowledge the owner has, only to find out later that in the minutes for months is the very discussion that will cause you an extra $100 or $200 a month for a period of time.

These are things that will not be in the financials. Speaking as an accountant, the financials are wonderful for being able to see how well the building is run in terms of setting the maintenance fees and the budget, seeing what a reserve fund is, and potentially seeing what as of the date of the report may be issues that will cause additional money. However if you are buying later in the year and the financials were issued in April-June of the year, they will not tell you what is currently going on.

Folks: This might help: A Lawyer is Not a Toaster: http://www.coopandcondo.com/component/flexicontent/items/item/202-a-lawyer-is-not-a-toaster

Ron Gitter

Be very, very careful with one-man shops. They'll have recommendations from people, including brokers, who used them when they were less busy. They'll talk a good game and be extremely responsive -- until you actually give them the work, that is.

After one harrowing transaction, I feel much more comfortable dealing with lawyers who are part of a larger real estate practice. There's just too much that can (and did) go wrong with a one-man shop, no matter how highly recommended.

Totally agree. Go with a team, where u have more than one person to talk to and that will respond.

rb, noise issues that a prospective buyer might want to know about will show up in board minutes but not in financials.

ali r.
DG Neary Realty

not reading the minutes is malpractice, in my opinion. In reviewing minutes, I have discovered the following on behalf of my clients (this is just in the last year): 1) Local Law 11 work that is imminent and meant a $5,000 assessment against the unit my client was buying in the first year of ownership; 2) the fact that a building was planning on paying off its underlying mortgage instead of refinancing which would have been an assessment of $40,000 3 months after the proposed contract closing date; 3) the fact that the seller in our transaction was complaining about lack of heat to her unit 6 months before the contract negotiations began; 4) insect and rodent problems in a neighboring apartment because the owner was an elderly hoarder who never left the apartment and let her dog take care of its business in the apartment and the health department's subsequent involvement (btw, bedbugs and other insects travel through electrical sockets so you need to know if there are any problems with units that share a wall, floor or ceiling with the unit you are buying); 5) that one building's board was going to convert the building's gym into professional space in order to generate income - the gym was a selling point that meant a lot to my clients; and one of the best 6) that the washer/dryer in the unit that was featured so prominently in the listing was ordered removed by the board 2 months earlier.

None of these would be in the financials. Sure, some of these things could be addressed with representations and warranties in the contract, but most seller's attorneys limit those reps and warranties to seller's knowledge and unless you can prove seller's knowledge, you are going to have a hard time getting out of the deal. It is best to have an attorney who takes a couple of hours and knows exactly what is going on in a particular building, even if it adds a day or two to the contract process.

Our attorney did not read minutes but did have the co-op fill out a questionnaire. Everything that we needed to know (and it was a doozie) was in this questionnaire -- a leak issue in our unit, noise complaints, fireplace smoke complaints, bugs, maintenance arrears, a previously undisclosed assessment, and a costly proposed building repair.

Is this questionnaire standard practice? Based on this thread, I'm wondering if maybe our co-op fills it out while others refuse to do so and provides minutes instead?

Good attorneys read the minutes and get the questionnaire. The questionnaire is good for getting basic facts about the building and it is also one way to help determine if there are problems now or will be in the future. However, there is no way to ask every right question only in a questionnaire. The only way to get a good handle on a building is to read the minutes, talk to the managing agent while you are in the office, read the financials and get the questionnaire filled out. BTW, if the managing lies/makes a mistake on the questionnaire, that does not give you an out of the contract, it only helps to protect the attorney from a malpractice claim. Any attorney who claims it is not necessary to read the minutes is lazy and complacent or beholden to brokers who want a quick contract signing. Hire someone who takes the time to do it right.

I have seen a managing agent accidentally misrepresent the coop's sublet policy on the questionnaire only to find the truth in the minutes, if I hadn't read the minutes, my clients would have had bad info going into the contract with no recourse.

There is no way to excuse an attorney who doesn't read the minutes and if an attorney tells you that they don't have to that should sound an alarm.

SM:

1. one man's minutes is another's eternity
2. time is always of the essence in real estate at every transaction level
3. the points you make are valid but can be covered by contract riders
4. waiting to read minutes can cause deals to be lost, especially if you're buying from me

Sellers don't kill deals because a buyer wants to read minutes in this market. Contract riders are limited by imagination. If a seller objected to me reading minutes, I would be very suspicious.

Why be suspicious. Just walk. Immediatey. Time is of the essence, as rb says.

SMNYC - May be buying a coop within the next few months. How can I get in touch with you?

i have bot and sold many coops

no minutes--no deal--bye bye--period

always provided and was provided minutes

Quick question regarding minutes and possible savings.

Couldn't you read the minutes yourself and write up any possible questions for your attorney to address?

I have done other legal dealings and always found that reading the legal documents myself both made me more familiar with the issues, and that I was in essence a free paralegal to my attorney since I was willing to go over my own documents in detail. Even a good staff might miss a detail if they don't know you or the case as well as you do yourself. An example is the issue with the gym above, even your attorney might not know that this was a key matter in your selection of that apartment.

SM:

1. I allow buyers 72 hours to return an executed contract after pre-qualifying my riders with their atty
2. if they fail to comply I accept other offers and send out other contracts
3. as a seller I want certainty, finality and speed so I can move onto other matters
4. and however well-intended your concerns are, if you're slow you're more likely to be a no-go

rb345....u r right on.
What atty(s) do u use/like?

REFAN:

Try Maureen Tighe. Very practical, knowledgeable and reasonable, with
a firm grasp of business and market realities. Hope that helps

Do you honestly think an attorney is going to take away time from billing clients to take part in your "interview"? Good luck with that! Most likely the attorney wil refer you to his paralegal.

New2RE, you can reach me at bluestellaluna@gmail.com. Once you contact me, I will forward my professional email address - I don't want to give out my professional account on Streeteasy. Good luck