Condo converions & purchase agreements (under the table)

You can't have a contract. But you can certainly have an "agreement to agree" on a purchase. One of the best ways to do this (how I started to do it) is by finding the lawyers who write the actual offering plans (certain attorneys specialize is this arcana). I get calls now from the attorneys the minute they here that something is brewing, and this consistently gives me an inside track to the best units in a given new development. Even then, I pass on probably 90% of new builds - I don't like conversions in general, and in the case of new bulds, the sponsor, architect, and builder ALL have to have track records in Manhattan. This in addition to the fact that I'm very specific about what I'll buy for myself/investment. After a while, you will get calls directly from these parties if you've worked with/bought from them previously when they have decided upon a new project.

Yes, and then you expect the attorney that wrote the offering plan for the developer to review it for you and tell you what areas of the plan could be problematic. While you're at it, have the developer's attorney act as your broker! Brilliant!

Mel:

Actually, the answer to your rather snippy response is actually, 'Yes' - in some cases. In the case of a recent purchase, the attorney (who I have know for over a decade) contacted me on an offering plan. When it came to discussing the very point you so snarkily brought up, we discussed the obvious conflicts, and I decided that I was comfortable in that specific case signing a 'conflict-of-interest' waiver (which the sponsor also signed) stating that we were all legally aware of the situation and decided to proceed regardless. Of course, had things gone south, I could have easily gotten different legal representation immediately, but in this case, as I had known the attorney and sponsor/builder for over a decade, the situation went off without a hitch, I got the best penthouse unit in the building for the initial pre-amendment price raising price, and all worked out quite well, thank you very much.

Your assinine commentary shows how unsophisticated you must be when it comes to answering the specific question posited by the OP. I many cases, I would steer clear of the type of arrangement I just described. But as I wrote in my post above, "...in the case of new builds, the sponsor, architect, and builder ALL have to have track records in Manhattan...." and that also means I have to have worked with then before. If you are a serious investor in residential real estate, this is how business is done. There are a finite number of well-known sponsor/builders and top real estate attorneys in Manhattan, and oafter you have spent enough time investing, you eventually work with most of them , and know whom you feel you can work with and whom you cannot. Having said this, there are still times when, yes, I do retain additional legal counsel just to avoid such conflicts. But this is on a case-by-case basis, and is not always required.

malraux--I live in a pre-war rental building that is most likely going to convert to condos very soon. Is it ok if I approach the sponsor about buying my unit, then? Will they be willing to discuss this with me before the condo plan is approved? And is there were we would sign the "agreement to agree" that you mention?

Sorry--my last sentence should read "And is this where we would sign the "agreement to agree" that you mention?"

Does this agreement to agree involve a price at which you'd buy your unit? Thanks.

By 'agreement to agree,' I precisely mean only a verbal discussion, and nothing written. Which, admittedly, includes all the pitfalls of an oral agreement.

I would find out who the sponsor is, and if as you say, the building is going condo soon, they will be working NOW on the offering plan. If so, find out the sponsor's lawyer's contact info, and have YOUR real estate attorney contact their attorney to discuss the possibilities. At the very worst, you'll be on the 'first person to call' list when the offering plan is completed. At the very best, they'll want to get some early committments to get some $'s in the bank, and they'll work out an arrangement with you and your attorney. Furthermore, you'll also get to find out which current residents will buy-in and which won't, and this may allow you to purchase a better unit within the building as your finances may allow.

OP here. In my case, I live in a rental building that is in the red-herring stage. I have a copy of the offering plan. At this stage, how do I approach the sponsor about buying my apartment (or another) and is it binding?

You do nothing.

You first have your lawyer review the offering plan thoroughly with you. After you have both discussed the pros and cons of the particular offering plan, if you still feel you wish to pursue the opportunity, then your lawyer should contact the sponsors lawyer ASAP and see what he/she can do on your behalf to get you in to the unit you desire. Let the lawyers work it out. Discussing anything directly with the sponsor will only weaken your bargaining position by tipping your hand, but will also not produce anything legally binding.