minutes and due diligence

It is normal for the attorney to go to the managing agents to read the minutes. Yes you absolutely should have the minutes read. It sounds like your attorney just does not want to come into the city frankly. What if the minutes show major upcoming repairs, major leaks, a cranky neighbor, bedbug issues, etc.... Tell your attorney to read the minutes or find a new attorney.

Get a new attorney. At this point, even if she claims that she will read the minutes, I would be skeptical and question how thorough a job she will do. The minutes do not always reveal everything, but they can clue you in on significant financial expenses, pending litigation, or other issues that may play a role in your decision to buy.

This is very odd--I've actually never heard of an attorney doing or saying this. Nor have I ever seen anyone sign a contract for a coop prior to reviewing the minutes or prospectus. I've also never heard of signing a contract but not putting up 10% deposit. This entire deal doesn't seem right. Perhaps we are missing something. Is there any more information you can give us or do we have the basics? If we have the basics, then I'd say you need a new attorney who actually does coop RE ASAP. You would also be foolish to put up a cent until you have proper representation.

You've been warned...

You have the basics, I think.
I signed the contract because we did that first at our meeting, but then when I found out that she hadn't read them, I refused to put anything down. She said that's totally fine, and that she would hold onto the signed contract until the check came in. I said, let's review the minutes. After she found out what was involved, she said she wasn't going to, and that the offering plan would be fine. And that will come to her on Monday.

Whats the difference between the offering plan and the minutes? What is in the minutes that is definitely NOT in the offering plan?

Is it a new building?

Not that strange that lawyer won't go and read. It depends on whether you are paying them to go and read them. If you say I will pay you for four hours of your time I am sure she will go read. Just go read the minutes yourself - takes an hour. They are not legal documents, they are minutes from meetings. You know: Item 6: talked about who would do the gardening this year: we hired company X. If you see any items like: Item 7: giant hole in the roof, then be concerned. Or just post the unit that you bought and everyone here will be able to offer you lots of opinions ;)

Ottawa, you are off here. Minutes are reviewed not for comments on gardening but for insights into capital conditions, finances, upcoming maintenance issues and increases, impacts on reserve funds, building issues that impact quality of life...Questions raised in minutes can then be pursued for more answers if need be. Minutes can reveal yellow and red flags. Reviewing them is not optional. It is not something a buyer does instead of his attorney. I cannot say strongly enough how fundamentally basic it is that in a coop purchase the buyer's attorney always reviews minutes and financial statements.

The offering prospectus is NOT the minutes. For most coops the prospectus is an ancient document written at the coop's inception decades ago. There are amendments that reveal changes in the coop over the years that should be reviewed for whatever they reveal and illuminate regarding the current financials in particular .

As for payment of an attorney, most will do a fixed fee for a standard coop closing. That fee for a NYC coop should be about $2000-$3000 for a competent real estate attorney. Could be little less (unlikely and would make me concerned about the skill level) or a bit more if things emerge that are unusual and require unexpected hours of work.

How can you "think" your attorney read the minutes before you signed a contract? Didn't you ask, "so what did the minutes reveal? what issues is the building facing lately? does the board seem to keep good minutes as a responsible group of officers might or do things look like a mess or like issues are being covered?" Did you discuss the building's finances with you lawyer asking her to walk you through the financial statements to explain them to you? Did you ask if the reserve fund was adequate in the attorney's opinion? Did you ask what the history of special assessments were in the building and if these extra fees were imposed very often?

You are making what is likely the largest purchase of your life. Start treating it like that. And you begin by asking questions until you feel you have the right information, and by hiring a competent attorney to represent you in this. I now get the feeling you were asking questions about your counsel in earlier threads because you sense she is not serving you. Either discuss your concerns with the attorney to see if they can be resolved or dump her and get another.

I thought this lawyer was a real shark...

Believe it or not, there are real estate attorneys who do not read minutes. (I know at least two....) Instead, they ask the co-op board to fill out a questionnaire with the questions they consider relevant.

I'd advise you to find an attorney who does read minutes, but did your attorney at least have them send out a questionnaire? If not, then you need to run, not walk, away from this one.

lad: that's surprising. Very coop unwise for a board to commit anything to writing outside the ordinary course of their business. No good comes of that--only liability and potential litigation for the board's representations. No up side for the building. Terrible policy. I can't believe these two lawyers actually get any boards to respond. And even then, why on earth would you not want to read the minutes--what is the harm? Only potential good for your client can come of it. Foolish.

Kylewest, think we may have been somewhat is agreement. My reference to the giant hole in the roof was an example of the type of issue that you should look for and why it is important to go look. And, again, it is not necessarily the job of a lawyer to look at minutes of a meeting. Anyone can do it. There is absolutely nothing legal about looking at minutes. What qualifies a lawyer to give you any type of opinion on what a healthy reserve fund is? Not a legal issue, although clearly real estate lawyers who work on this will be able to, although so would lots of people. As you say, if you pay a lawyer $3000 they will - or more likely their summer student or paralegal will, but if you pay an attorney less they won't. In this case, it is pretty clear that the OP is not paying a huge sum for the lawyer and it is therefore normal for the lawyer not to go look. If the lawyer previously agreed to go, then she is in breach of contract and that would be a legal issue.

This is the second time I've heard of an attorney advising a client to sign a contract before an offering plan and financials had been read. I think it's disgraceful.

ali r.
DG Neary Realty

Time for a new lawyer. When I was a first time buyer, I too engaged a lawyer from Long Island on a friend's recommendation. She said the same thing about the minutes. When it comes to NYC real estate lawers from the 'burbs are way out of their element, especially with co-op purchases.

You're paying the lawyer not only for his legal advice but also the expertise that comes with having evaluated hundreds of similar transactions before yours. This is why you don't want a personal injury attorney from Long Island representing you during your purchase -- that person can go through a contract, but they won't have the same level of experience to recognize nuances in minutes, offering plans and house rules as somebody who does NYC real estate for a living.

Furthermore, Ottawanyc's claim that no lawyer will do the work him or herself for less than $3000 is utterly false.

Hi All,

Let me try to add in a little more info....

@Ottawanyc-
No, it is not a new building (1937).
Also, her fee was $2500 (nothing paid yet). About right, IMO.

@kylewest-
Thank you for the insights. By the time she got the contract (which was very quickly after we had agreed on a sale price0, I was under the impression that she had everything, as we went ahead with the meeting/signing very quickly. It was after we went over the contract, that she mentioned that she didn't have the minutes, (and that she wasn't going to get the offering plan until later), and that my broker should contact the Management and get her the minutes. Of course, my broker said that the attorney should do that. When my attorney contacted them, they told her they could not send them to her (ie, that she would have to come in), and then she said that it was unnecessary and going "above and beyond" what is needed.

@w23rd-
Ha, yeah... (well, I think she still does have the potential to be, but apparently is not doing what I thought she should be doing).

@lad-
There has been no mention of any kind of questionnaire.

@Lanzz-
This is what I am thinking more and more every hour.

@flarf-
I agree. Also, her fee is $2500, about right, I think (I have not signed anything with her regarding her services).

Daniel, I think it important that you ask your attorney how many Manhattan co-op closings has he/she done. It is absolutely critical that the attorney be part of the due diligence process by reviewing minutes and also the building financials. True, the accuracy and completeness of the minutes vary from building to building. But reading the minutes is an essential attorney responsibility prior to closing a Manhattan co-op. This is standard practice. If it were me, I'd ask the attorney for a refund; I'm sure members of this board will be happy to suggest an attorney. The fee charged in this situation is within normal range.

Daniel, youve convinced me the attorney is well out of her area of competence. No coop "mails" minutes to counsel. You make an appointment and inspect em at e management office. This is nyc RE 101 stuff. Ditto whatflarfsays. A skilled RE attorney will know what the reserves should be. They'll know what is common and out of the ordinary for all things in the minutes and the financials. Yhis comes from reviewing dozens or hundreds of these over a career of closings and deals. Yes, anyone could do it, but no one else does. No one else you can hire to dothis in reality. One could do it oneself, butwithoutpoints of reference and a trained eye, i wouldnt trust that method. A good lawyerwill do this themselves. It isntexactly the stuff of a merger between multi national corps. Summer associates? Please. On a simple coop deal? Daniel, listen to those of us on here with real knowledge of nyc RE. The fact that you signed somethingwithout asking questions first = shame on you. But we all make mistakes. Just dont make the same onetwice.

Yeah, don't do that again, Daniel!

Thanks for the recent replies. And yes, I fully accept (and am now aware) that I did not ask the right questions. I will in the future.

Fortunately, I did not pay her anything, I did not put down any escrow deposit, nor did I sign anything pertaining to my lawyer. The only thing I signed was the sale contract, which, as I understand it, is not complete/valid until a (10%) deposit is made.

My next lawyer will be more on the ball, hopefully.

Daniel, a contract is not executed (i.e., valid) until the acceptance of your offer (i.e., the contract you signed and sent) has been communicated to you (i.e., they send you a countersigned copy). Prior to that, your may at any time withdraw / revoked your offer simply by communicating as much. Although it is unlikely anyone would send you a countersigned contract without a deposit, I suggest you explicitly communicate a revocation of your offer.

inonada,
Well, I don't want to revoke the offer, I just want a new lawyer! :)
My broker said this should not be a problem.

My attorney didn't do much "counseling", and I would not hire him again, but he *did* read, comment on, and comprehend the minutes. Attorney came highly recommended by several professionals.

I didn't know much at the time, but I knew he needed to read and assess the minutes, and I was glad that he did so.

We have a great apartment, I'm totally in love with it, but next time I'd do things differently. Moral of story: attorney needs to read minutes, and not at gunpoint.

the reality is that except for NYC attorneys, no one knows what to do in coop transactions. many don't even know what to do in condo transactions. your attorney out of LI charging you $2500 is highway robbery. the deals that she does most change $1200-1500. it's only negotiating the contract and that's all. all of the other important things that make up the additional $1K in costs are not being done.

Daniel:
I think I already suggested the following to you on one of your other threads:

Look the building up on the HPD and DOB websites.

I went to see an apartment in a building that the broker raved about. Great financials, great building -- the Brooklyn D.A. lives there,blah blah.
While I was looking, I was told that there was a recent maint. increase AND there is an assessment of over $200. per month (for how long? She didn't know, said "They are having a meeting next week to tell the shareholders.") What is the assessment for? The waterproofing.
So this building does NOT have great financials.

I looked the address up on the DOB website:
They recently received a penalty for $24,000 (yes, that's 24K), because they had "no special riggers license and had no special rigger on-site. One worker stated he was the rigger but was unable to produce riggers license."

7 days later, another violation for $8,000:
"worker was on fire escape on 3rd fl. removing pipe scaffold and fell. No safety measures were taken to prevent."

32k in recent open violations.

I'm not buying in that building. Don't need to read the minutes to decide.

>lad: that's surprising. Very coop unwise for a board to commit anything to writing outside the ordinary course of their business. No good comes of that--only liability and potential litigation for the board's representations. No up side for the building. Terrible policy. I can't believe these two lawyers actually get any boards to respond. And even then, why on earth would you not want to read the minutes--what is the harm? Only potential good for your client can come of it. Foolish.

Kyle, you do realize that a smart board doesn't put much in the minutes other than formalities, CYA, and conclusions, e.g. the Board convened, the following people were in attendance, the board reviewed 3 proposals for the new garden and decided on XYZ, and dorman A has been with the building for 20 years and we decided on putting up a big congratulatory banner and baking him a cake.

Not, the Board convened, the following people were in attendance, the hole in the roof was discussed, Mrs. Shmidlap's problem dog was discussed, the board considered replacing the sidewalk after two residents tripped this winter but determined we didn't have the money, the land lease is up in 29 years, we agreed to reject all new purchasers who aren't of X or Y ethnicity, and Mr. Z said he would resign unless we picked a new managing agent who isn't related to the board president.

lol, huntersburg.

@Truth-
Thank you so much for this info. My next challenge: making heads or tails out of the DOB website!!

@huntersburg-
I do see what you are saying, and I am sure that different buildings take their record-keeping with varying degrees of seriousness. HOWEVER, whether the building does, or does not, keep good minutes, I still feel that the attorney should review them.

@Truth-
Who would be the best person to read/go over the DOB data? I am not savvy enough to understand all of it.

Daniel: you aren't understanding the point about how minutes are kept. It isn't a "bad" board that lacks "seriousness" which omits details and a "good" one that includes a lot of detail. A competent board will in most cases put relatively little in the minutes--similar to what huntersburg describes above. But there are clues to be "divined" from even broadly worded minutes. "Discussion re: electrical upgrade" for example is something worth following up about. Could be adding an outlet to the doorman's station. It could be that ConEd had mandated a new connection to the grid and an updated building transformer for $1.1MM. But the entry signals a lawyer to ask questions about that. Same as an entry about "review lender reply re: coop refi." Says nothing but suggests something is going on with building's mortgage or line of credit and a buyer should ask questions.

Even if minutes are utterly opaque, there is no harm in reviewing them. Zero. It is something that a buyer can only benefit from, so it is absurd and irresponsible not to look and see.

haven't you caught on to the fact that this poster is yet another fake?

think about it.

@kylewest-
Yes, I understood all that, I didn't express myself clearly, I guess.

@columbiacounty-
um, what? based on?

I'm with columbiacounty on this one.
Daniel, new poster, one of the first give-aways is the use of the exclamation point in your initial post. Normal people don't use exclamation points.
The second give-away is that normal people don't need so much attention, but there you are responding pretend-innocent to each and every person here. You've developed your own show and you are at the center of it all. Hell, you even respond to columbiacounty. A normal person doesn't really care about the personalities, only the answer to the initial question. Your continued challenge of responses fits with this - the answers to the initial questions are typically obvious and usually a poster knows the answer (as in your case, the question is absurd to begin with) and can go away satisfied relatively quickly, but yet you continue to challenge in order to keep the circus going.
So yes, fake.

you would know.

Correct, I am professionally trained in many relevant areas here.

oh yes.

of course.

why?

Why what?

why?

Because

why did you make up daniel?

@ columbiacounty
I read about Daniel! I didn't make him up!

Wow, uh, ok, whatever floats yer boat, boys!

!

Daniel: Whatever.
You can use and understand the DOB website. (and the HPD online building information site.)

Type in the building address. On the left side of the page will be a column of things you can look up:
go to open violations. Click on the complaint numbers to get details.
Look for the apt # you are interested in buying and the surrounding apts.
Print the online info pages out. You can then give them to your lawyer to check against the minutes.

In the case I described above, it was very easy to see that the building is not in good financial shape and there may be a lawsuit in its future. Lawsuits due to negligence are usually covered in the building's insurance. The insurance company will then raise their rates and the co-op will increase the maint.
(although the accident happened to a contractor's employee, the worker will also sue the co-op, which may be the only one who has insurance. Contractors doing that kind of work without proper licenses could also be operating without insurance. It is the super's responsibility to check the contractor's onsite employees in order to make sure that the rigger, for example, has a license with him and the person stating he is the rigger is the same as the license-holder. These workers have access to the inside of the building and so need to be supervised by the super while they are working there.)

The managing agent is responsible for making sure the building is hiring qualified contractors.
In this case, the managing agent (Cooper Square, who seem to have detractors on se discussions and now I'm convinced they suck) was alsleep at the switch, along with the co-op board. They received 2 DOB violations within one week. 32k in DOB fines. If those fines are not paid soon the co-op will be hit with additional 5k "civil penalty" fines for non-payment.

Truth,
Thanks for the instructions/story. :)

I checked out the DoB.
when I click on the building in question, there are 2 links that include "violations." One is "Violations-DOB" and that has 17 total and 5 open. The other category is "Violations-ECB (DOB)" and that has 3 total and 0 open. When I click on the first one, most are "dismissed." The last date listed (something filed) is 2007. what specifically should I look out for here?

Daniel- Seriously, calm down. Other people have bought in the building. You are making yourself nuts on SE

Well it's good for Daniel to be able to check the HPD and DOB websites, ph41.

On that DOB website look at the "open" violations:
no violations on there for your apt is good.
Look for surrounding apts. Nothing about them on there is good.
click on the violation number(s), or enter it in the box for violation #. See if the violations have a monetary penalty, if so and it is a substantial sum as in my story above, that's not good. The owners/shareholders will pay for it through the building's cash reserves. If the building is allowing unsafe work to be done without permits, that sort of thing is the sign of a bad managing agent and super.

Violations are still considered to be "open" until the managing agent files a form with the DOB to close the violation. Even if monetary penalties have been paid, the managing agent needs to submit that form. The DOB sends another inspector to confirm that the violation no longer exists at that address/apt#.

The same for the HPD website/inspectors. Violations still listed there as "open" can cause your lender to ask that the violation(s) be closed completely before they will give you a mortgage.

The violation from 2007 sounds like it may be an elevator violation. If the elevators (or whatever the violation was issued for, elevator violations can be for not displaying the inpection list properly in the elevator))have cleared DOB inspection since then,without accumulating monetary penalties (late payment: usually around $400-$800 each penalty, and/or $5k civil penalty) it's O.K..

The 2007 violation was:
L1198 - LOCAL LAW 11/98
and it was dismissed. The last one before that was in 1994, also dismissed.

I don't see where to specify 1 particular unit... Just view the building as a whole.

The HPD online has a box to type in specific apt.#.
Most of the violation desriptions have the apt.# in them.

No open violations or monetary penalties that are still unpaid on the DOB website is good.

There is a glossary on the HPD and DOB websites that will give you the definitions of the notations, such as: NOV stands for "notice of violation". That's the date when the HPD sent out a notice informing the building managing agent about the complaint that has been reported to them. They are given time to correct the violation (dismissed usually means the violation was repaired) before they send out an inspector.

Usually if tenants are calling 311 to report building problems it's because their building is ignoring the tenant's complaint. Sometimes the HPD notice will cause them to fix the problem, mostly not. That's because the managing agent/super/board are inept and caused the problem due to neglect. Maybe the building just doesn't want to pay. Sometimes it's a Sponsor unit that causes the violation and the Sponsor in that building is treating the elderly RS tenants like crap and refuses to fix things trying to force the elderly tenant out of the building.

If there are no open violations on the apt. you want to buy or the surrounding apts., that's good.

As you have found out, there is a lot to learn and know about buying and owning an apt.
Now that you have a good lawyer and financial advisor you should be O.K.
It is, as kyle pointed out, the biggest purchase you will make. It is good that you are curious and trying to learn as much as possible here.

Don't get hung up on trying to learn everything now. You found out the important things and your lawyer can answer specific questions about what he found in the building's financials and minutes.
Before you start another new discussion here, search the existing discussions and when you find one about the topic/question you are interested in, you can post a comment on that discussion thread. It will bump the discussion up to the top of the discussion home page.

On the one hand, many boards keep scant minutes for fear of lawsuits (the more you put in writing, the more exposed you are from a liability standpoint), so some folks may consider it unnecessary.

On the other hand, i'm w kylewest here - requesting minutes is standard operating procedure for a RE attorney in NYC. and for your lawyer to flat out refuse to even request sounds fishy - esp that it doesn't involve THAT much more effort. Makes me wonder what else he/she will skip over.

uptowngirl: Daniel got a new lawyer. (He's got a few threads rolling here on se. It's a bit confusing to keep track of).

If a co-op or condo keep scant minutes because of fear of litigation they will be in for an unpleasant surprise if they are involved in a lawsuit.