2018 Lawsuit

https://casetext.com/case/bd-of-managers-of-184-thompson-st-condo-v-184-thompson-st-owner-llc-1

The Board of Managers, lead by board president and attorney Alex Padres lost the case. It’s unfortunate, the board needlessly renovated the common areas and chased a frivolous lawsuit, promising they would recoup the capital with a favorable judgement. Instead they needlessly waisted their neighbors money.

https://law.justia.com/cases/new-york/other-courts/2020/2020-ny-slip-op-30576-u.html

I was looking for an old thread and saw that this one got caught in the "new poster" quagmire where somebody's comments were not able to post in a timely fashion. I haven't read the opinion, but this is for all those who complain about coop boards; seems like condo boards are not without peril either? On a similar note, our first condo building in Columbus (where in-laws live) just went to a "no rental" policy except for limited period of time upon application to the board explaining financial necessity of renting.

I couldn't help myself; just skimmed it and it looks like yet another case where the Offering Plan disclosed risks that materialized and purchasers tried to sue, notwithstanding the fact that they had been warned.

I'm not sure how many real estate attorneys read through the entire offering plan to assess total risk and explain those risks to their clients. However I do remember when I assisted David Schwimmer with a condo purchase, his team of attorneys spent days reading the entire offering plan (to the annoyance of the listing broker, of course).

Well, they did get a $15K credit for their efforts. I'm sure some lawyers somewhere are happy.

It seems that if you want new development, you've got to accept a lot of risk (unless and until the tide has turned against developers). If the price works for any buyer for any given development after factoring in those risks per their own wants and needs, so much the better. All I know is that the entire new development market is made for pockets deeper than mine so I don't follow it at all.

Keith, I find that to be consistent about clients in the entertainment field; they don't tend to under-lawyer.

ali r.

I bought in new dev and ran into similar issues. Common charges were severely underestimated and were jacked up 30% as soon as the board took control plus multiple special assessments. There was also litigation, and in fact the building still doesn't have a permanent C of O many years later. There is almost no way for buyers to hold sponsors to account. I probably wouldn't buy new dev again.

Sweet spot seems to be 5-10 y.o. buildings where the building is still fairly current but the initial issues are sorted out. I looked at one 5-year-old building about two years ago where the building was very trendy but it quickly became apparent that the place was held together by duct tape and twine. Glad I didn't buy off plans there.

MCR,
How many billable hours do you think it would take to read an entire offering plan? Especially if there was an odd deal structure like Brooklyn Point?

George,
Even if an attorney read an Offering Plan cover to cover, do you think they would figure out that the common charges were underestimated?

No, I just assume the commons are 25% off.

I've read 5+ offer plans cover to cover in the last month, just as a curious shopper. Most are copy/paste of each other, but each building usually has least 1 fascinating nugget of history (or liability!) in there.

But I'm weird like that.

Current hobby: legal & regulatory proceedings from NY public records. Unlike offer plans, which are a private contract, you don't need a broker or friend on the inside to dig up these primary sources! For example --

https://iapps.courts.state.ny.us/webcivil/FCASeFiledDocsDetail?county_code=Hqg3syu8CgZyGh0Lw3C_PLUS_ow%3D%3D&txtIndexNo=Xeplmu4w6nZaXq0o9TjmSg%3D%3D&showMenu=no&isPreRji=N&civilCase=M9R1r_PLUS_FeZuRvse40qwwHkA%3D%3D

http://a810-bisweb.nyc.gov/bisweb/BScanVirtualJobFolderServlet?requestid=2&allisn=0002616449&passjobnumber=122734434&passdocnumber=01&allbin=1001100

@30yrs - Re billable hours, associates’s dream! Wrt to anyone who can afford to pay for such billable hours, I am sure their pockets are deep enough to withstand whatever may come.

And wrt to those who take the time to read the Offering Plans, court cases and permit files themselves, they clearly know what they are doing and, if they find one where the price is right for them after having done that due diligence, more power to them. I think I mentioned this before, but we had friends who ended up doing quite well at The Rushmore at the end of the day (they now live in Summit NJ), and that one strikes me as a new dev where a number of risks materialized but were ultimately worked through? I don’t really know because again, I don’t follow the condo market closely at all.

P.S. @30yrs - However, I don't want to be dismissive of your pain, and I suspect your concern is more of what these things and the bandit developers do to NY than about any particular buyer. You know too much.

@richardberg, brokers like myself will often send digital copies of offering plans if we have them (with, of course, a GIANT disclosure that we may not have the latest amendments, and so you still need to purchase the offering plan if you're doing true due diligence.)
Another good source is TitleVest, which maintains a small library.

ali r.
{upstairs realty}