Broker lied about maintenance. Please help what can we do?

Sue yoru lawyer. Didn't you review the contract????

he reviewed it. the broker lied on the deal sheet

Basic due diligence on the apartment should have clearly revealed this. What does your attorney have to say? And would it really have made any difference to the deal, anyway? Very often maintenance is listed at the "old" amount even though a rate increase has been passed by the board and may or may not be implemented already. The most understandable way this kind of thing happens is: an apartment is listed in November. In late November or December the board votes a 5% increase in maintenance. It kicks in in January. Neither seller nor agent bothers to get listing updated to reflect increased maintenance and a buyer comes along in February and doesn't realize it is really higher than the ads say. Since nothing in the adds can really be relied upon, it is the due diligence of the buyer that should turn up the real cost. Similarly, the contract terms are what guide the sale--not oral representations or advertisements. There are exceptions, but this doesn't sound like one.

Are you sure they lied? You cannot sue your lawyer. Idiotic comment Babsie02. Maintenance is listed on the contract -- which you reviewed and signed. And is not fixed. The building financials also discuss tax and maintenance per share. Maintenance has increased across the city several times in the last few years. Bloomberg announce more tax increases. Your maintenance, set by the coop board, will likely continue to increase. It is likely that an increase went into effect between the initial listing and close.

The maintenance was listed wrong on the contract. It went up 5 months prior to contract signing and prior to apartment being listed.

What does your lawyer say?

THe lawyer says that he has never seen this happen where the broker lies on contract and deal sheet.

What I'd do is deduct from the broker commission the following: $100 times the # of months it would reasonably have taken for the maintenance to have risen by $100 per month. That'll teach them not to lie about maintenance in the future.

"Lie" is a pretty conclusory term here. The broker "lied" because s/he thought they could sell the apartment only if they fibbed about maintenance being $100 less? I'm sorry. But the contract contained the correct number I assume. I mean, you did read the contract, didn't you? It is the largest expenditure you've ever made, isn't it? Did you check on the sales price in the contract you signed? Pretty close by the maintenance was listed, too. If the contract incorrectly listed the maintenance, what do you want? Were you ready to walk away from the deal? I'm not sure what you are asking here. Would you have negotiated differently and expected the seller to lower the offer price because of the $100 difference in maintenance? This is all a little over the top. The broker should have been excoriated at the closing and made to cough up something then and there if you were really in position to walk away and were willing to do so. But the time to deal with this has come and gone. You closed. It's done. Let it go.

oh I didn't read that you closed. I would never have closed without clearing this up. You're SOL.

the number in the contract is wrong. the broker lied from the very first second

I don't know anything about this particular issue, but I know a fair amount about contracts in general. Most I deal with have certain representations. If those representations are false, the contracts generally specify remedies. Is this not the case here?

Again, what do you want? What remedy do you seek? When this was discovered at closing, I have no doubt the contract was amended with consent of the parties. Otherwise, there would be no meeting of the minds and the deal wouldn't have gone through. This is a pretty material term, but whatever the contract said was to be done in case of a faulty clause was likely done. That was the time to address this. Not now. Surely you already sense this is the case.

the contract reps have nothing to do with it. the reps would simply rep that all info in the contract is true and complete, which, presumedly, it is. the contract will also have an integration clause specifically discounting any side oral or written representations. thus the issue is that the buyer and their atty never bothered to confirm the maintenance figure as against what was previously represented to them.

My understanding from help_please is that the final, signed contract, was wrong - i.e. misrepresented. That's why I brought up remedies in my post. If this is not the case, then I am with everyone else who says it's too late.

OP: "No one noticed until closing." This was known to the parties at closing. That was the time to address this problem.

Kylewest, thank you for the input. What could we have done at closing to address this problem? How is it different now?

Pretty tough talk (3X) that the broker (intentionally) lied. It was very likely a mistake, though a mistake that should not have been made, but one that should have been caught. What could / should have been done:

Shortly after accepted offer, you / your buyer broker should have verified with the LISTING AGENT that the maintenance figure was correct AND current.

Shortly after accepted offer, you / your buyer broker should have verified with the MANAGEMENT COMPANY that the maintenance figure was correct AND current.

As part of due diligence, your attorney should have verified the maintenance $$$ as referenced in the Co-op documents

Example: my buyer had an accepted offer yesterday on a Murray Hill studio. Today, I asked the listing agent, via email, to verify the stated maintenance as correct, AND to also verify that there were NO special assessments in place (there were none stated on the listing). Monday, when the management company rep is back from vacation, I'll ask the same thing of her.

Re what you could have done at closing, though not a very practical approach - threaten not to close - and see who blinks first. It's possible that the broker(s) might have accommodated you in some way. What you can do now - not much.

At closing you used "Negotiating 404" level tactics and throw a hissy fit and express disappointment. You express increasing fury as others try to talk you down. You talk about material terms of the contract being fraudulent and begin to question all terms. Then your spouse plays "good cop" and asks you to step into the hallway. You two let everyone stew for 5 minutes. Maybe someone will come out and offer a resolution. If not, your spouse goes back in and explains s/he wants to go forward but you are beside yourself and you don't thing the deal is going to happen. You listen to responses. You wait until someone offers a monetary solution...maybe something like the first month's maintenance gets thrown in by the seller. You laugh and say I'll run it by my spouse in the hall. Spouse is heard screaming in hall about deceit and crooks and taking advantage and a year's worth of maintenance would BEGIN to make this right given that you two were going to live there for 20 years and this mistake will add up to thousands. Back inside, you eventually settle for maybe two months maintenance or 1/4% off each broker's commission with the money going to you, or something of the kind.

This is all theatre because of course you are going to close in the end no matter what the deal is. It is theatre because as outraged as you pretend to be, you guys kind of weren't as diligent as you ought to have been either and no one is coming out of this 100% innocent.

somewhere in banging out the above, i switched the roles of you and your spouse--you can figure out what I mean I hope. sorry. typed too fast.

are you the seller or the buyer? if you were the buyer, then I'm thinking that you may not have had any idea it was not correctly listed and you could ask that the broker/seller pay for the difference for some time. if you were the seller, you are SOL. You should have reviewed the contract which clearly states the maintenance amount. If the maintenance changes between the time you signed the contract and the time you closed, that would be one thing. But if you were the seller, you should have known that the maintenance was wrong, even if it was wrong on the deal sheet. The contract should have reflected the correct amount.

signed: Esq.

babsie, what are you talking about? you are a lawyer? why would a seller be complaining about the maintenance being listing wrong in the contract? this is the buyer. and the buyer should have learned this during due diligence process. if a large building, it should have been apparent from review of comparable sales in same building.

This was clearly an overlook by your attorney. It is his/her job to perform their due dillange for you...that includes reading board minutes about any maint. changes, speaking with the board president about this, and speaking with the management company. Any attorney that would let his client sign a contract on the honor system from the real estate broker is not an attorney that was doing what he was paid to do. This is 100% your attorneys fault!
Sorry if this isn't what you want to hear.

You really haven't responded to my very first post: (1) how did your attorney explain his/her failure to uncover and report this to you through the due diligence you paid the attorney to conduct; and (2) how would the accurate figure, had it been known to you, altered your ultimate purchase of the apartement? Assume you knew the correct amount at the beginning, before signing the contract, how would it have impacted the deal? In lawyer terms, what damage did you experience by not learning the true amount until the last minute?

Something similar happened to me last year. I bought a new development/ conversion small loft building. The Sale sheet was stating RE taxes at $ 610 per month, for a huge space it sounded like a really good deal, but AT CLOSING ( and none of us owners noticed that, 3 of us all closed at the same time) the real RE taxes kicked in, $ 7,500 (1,250 per month) .
The developer's excuse: He listed the RE tax pre conversion, and claimed that he didn't know the final charge (but at closing they all knew but no one said anything...). Funny, none of the owner sued him, but that episode left me a bitter taste. Luckily i'm in contract to sale (after one year)i really learned a lesson, that if something sounds too good to be true it is.

i meant i bought a unit in the loft building

KYLEWEST is 100% correct. Very often there is a re tax increase or slight maint increase that occurs during the course of a listing that the seller does NOT inform the broker of.

When a broker gets a listing, they usually confirm main & re tax with mgmt/seller. They rely on that info for marketing. It is up to the buyer and the buyer atty to due diligence and confirm these #'s.

Many live & learn like seven7 above. When I first bought, my re taxes went up immediately after I closed, for some reason, and was about $200 more than I thought. Something I lived with. Almost always, it ends up costing more on a monthly basis when you actually own the place, then when you calculate the #'s beforehand because likely, something is a bit higher now.

how does one sue the lawyer?

so there are some people who post frequently, very frequently, that renting is always better than buying.

And yes, you can do math, and cite statistics or probabilities, and on

but really the best argument for why renting is better than buying

FOR CERTAIN PEOPLE

is exactly this idiot
who should never have been allowed to purchase

or vote for that matter

and keep this person off the road too, driving is a privilege remember

You don't seem to be listening, and it suggests this may be part of how your problem began. AGAIN, what exactly are you going to sue for? What are your damages? Please answer the questions in my last post.

And FWIW, lawyers are not magic. You sue them just like anyone else. Basically you state a legally cognizable claim, you state your damages and the remedy you seek. I don't think you have articulated any damages. Can you state how all this damaged you??? See my last post.

This should have been caught way, way earlier.

When I sold an apartment with a

^^ sorry.

The last time this happened to me (seller did not inform me of a rise in taxes) the seller's attorney caught it as he drew up the contract -- and called me and said, "I'm sending over the contract, but you're wrong on the deal sheet, so contact the buyer."

If that didn't happen, your (buyer's) attorney should have caught it on contract review, as should you.

So given that everybody missed it -- I don't know what recourse you have, post-closing.

Not to mention, $100/month is a pretty negligible sum in NYC.

Those saying the broker "must've made a mistake" discount the fact that many brokers seem to make these sort of "mistakes" more frequently than most other professionals (and, curiously, never in the buyers favor...if they were truly "mistakes", wouldn't we expect to see a normal distribution of errors in both directions?).

I knew one realtor in another city who routinely made "errors" like this, and once showed up DRUNK to a closing. I suspect she is in another line of work now...

Another factor skewing broker errors in favor of their clients is that most often it is the client providing the information to the broker who as an agent of the client simply passes on the information. If the client says the fireplace works, that is what the broker repeats--the broker doesn't go and light a fire to see if the client is truthful. If the client knows of an impending maintenance increase but omits this and lets the broker publish the existing charge which will be changing 2 weeks later, is it really a broker error? Brokers don't do due diligence or bet their clients' representations--that is what lawyers and the person on the other side of the deal are supposed to do. So yes, brokers (many of whom are utterly incompetent in my view) often err in their own favor, but their clients permit it/encourage it/lay the ground work for it very often.

Your damages would be the difference between what the maintenance was represented as being true (ie. $500) and the actual maintenance ($600), ie. $100/month. I would ask my lawyer to pay me the difference each month until the maintenance rises to an amount that is above the difference (in my example $700).

Perhaps you can persuade the responsible party via '38. Its a convincingly cooperative method.

While listing agents DO rely on the seller to provide the basic info required for the listing, it would be unwise for the agent to not verify maintenance and any special assessments with the management company. Since he / she has presumably contacted the management company for the financials, purchase application, house rules - all of which will be required by the purchaser - there's no reason not to verify the maintenance at the same time. And on rare occasions, the stated maintenance is actually MORE than the actual. None of this is to diminish the need for the buyer / buyer broker / buyer attorney to perform their due diligence.

The listing agent should post the maintenance $$$ at the time of listing, and then update it as required. While I'm sure that some agents are less than diligent about posting maintenance increases, I often do see notations as to "maintenance increase" as part of an apartment's listing history.

See, this is where going to boards for advice can get you into trouble. First, babsie02, are you actually an attorney? Your damage formula is so without basis that you would be laughed out of court. Assume the damage is what you suggest: $100 per month. Why would the damages assessed stop at the next maintenance increase? Why not charge the attorney $100 a month for the duration of the buyer's tenancy with the buyer picking up any future increases on top the $100? Under your thinking, the buyer is paying $100 more a month because of attorney error and that fact does not change upon the next increase to maintenance. But more fundamentally wrong is your proposition that the buyer is damaged at all. How would you establish that? The buyer learned the facts PRIOR to signing the closing docs. The buyer did not seek a remedy at the time it was most able to be forged: at the closing. The buyer has not stated that s/he would not have entered into the deal "but for" the errant lower maintenance figure; that is, even if the figure were correctly stated in the contract, the buyer hasn't said it would have made a difference. If the buyer still would have gone through with the deal if the proper amount were known, then how is the buyer damaged now? You assume damage where there appear is a legal sense to be none, and then you invent some formula from thin air for restoring the non-damaged party. If you aren't an attorney, stop giving legal opinions. If you are, you know nothing about the most fundamental law of contracts or RE. Posts like you gave above are reckless and serve no one.

Second, johnrealestate1, what you post basically discusses what a broker can do/might do, but that is quite different than what the broker has a legal obligation to actually do and that for which the broker could be held legally responsible. No broker has an affirmative legal obligation to check anything with the managing company or research what a client tells them to say on the client's behalf. If I'm missing a law or regulation or REBNY rule, let me know. But confusing what would "be unwise" for a broker to do or fail to do with what a broker MUST do doesn't further this discussion. We're talking about a specific error and who is at fault, if anyone; we're not arguing how brokers could/should behave in a utopian society.

I'll respectfully disagree. I'll also leave the legal aspects to others more expert than I.

As far as "furthering the discussion", the intent of Boards like this is to provide points of view that just may be helpful to others that find themselves in similar situations, not so much to provide amateur legal advice to help_please.

Re "can / might do in a utopian society" - No, this is what listing agents should do and generally DO do. Not everything that a broker should do and customarily does will be found in the law or a REBNY regulation. To me, getting updated, correct maintenance info on an exclusive listing - at the same time one gets the other financial info - seems to be a no-brainer.

Do agents screw up sometimes? Sure. And that's most likely what happened here. But reminding buyers that they are responsible for their own due diligence, while at the same time stating that the vast majority of listing agents will already have verified the maintenance - seems to me to pretty well capture the situation.

I assume you refer to babsie when referring to "amateur legal advice," John. My point above is that when seeking some kind of remedy, the OP can only be confused by you telling him/her a broker "should" do x or y. Should is read by most people as "must". I take it what you are saying John, is that attentive and thorough brokers would probably confirm basic financial info but are under no obligation to do so and their failing to do so does not give rise to a negligence claim...it just makes them a lousy broker.

kw-

Point taken. My intent was just to expand the discussion - for those on the outside who could possibly benefit - beyond the legal / liability / "fault" considerations.

Based on input from the majority of the posters, it seems pretty clear that the buyer / buyer attorney were a bit remiss here. My only point was that USUALLY the listing agents do a pretty decent job getting the facts right, as opposed to the contention that since there was no legal / REBNY requirement, listing agents often / usually just take the word of the seller.

Clearly, we have our share of "slugs" in this profession - it's just that I find them to be a distinct minority. The main fault I find with SOME of the Real Estate types is that they fancy themselves more important than they really are.

"The main fault I find with SOME of the Real Estate types is that they fancy themselves more important than they really are."

The main fault I find is that most of them aren't terribly bright.

That sound legal advice was based upon getting some money now from the lawyer without going to court. If you want to get into a big lawsuit, pay legal fees, and drag everyone in for years, be my guest. Your best bet is to get some money from these people without suing anyone if you can. Write a demand letter to your lawyer, the seller, the seller's lawyer and the broker and see what happens. I would send it to the seller and the seller's lawyer b/c it is also their responsibility to make sure that what is in the contract is correct and true and not to mislead you. They also either "missed it" or were in on the scam with the broker. It's not that much money per year and the time spent taking depositions, making motions, etc. is not worth your while for $1,200/year in damages. Hire a lawyer to write a bunch of letters in this regard and save your pennies. Have him/her negotiate a deal for you and move on.

babsie: did you miss first year of law school? The OP has not stated any way in which she was injured. Once the full price was revealed, she still closed on the deal and sought no remedy at the time. The OP has not stated that but for the incorrect figure she would not have bought this apartment or would have been able to successfully negotiate a different price. Without stating any cognizable damage, it doesn't matter what type of legal theory/claim you drum up. The reason it would be absurd to hire an attorney to sue is that the is nothing to sue for. Even if the buyer's attorney or agent or the seller's agent were negligent, it caused no harm. I asked the buyer repeatedly if s/he would have done anything differently had the true maintenance figure been made known earlier, and the buyer has remained tellingly silent. So how, Babsie, do you figure the buyer is entitled to any damages? On what legal theory? And how would you state the damages? Are you an attorney? Because your legal assessment is wrong.

The OP performed his side of the contract and can now sue for damages. The revelation at the closing will not be enough for the people involved to walk away from liability. The misrepresentation by the broker, the negligence of his lawyer, and the continued misrep. by the seller's attorney and the seller will not absolve them all of the OP's damages.

I've personally been involved in a few disputes over the years. Sometimes I'm right, sometimes I'm wrong.

I like people like babsie02, because they think they can letter write me into submission. It has never worked. I have always ignored the letters, and only once was I actually forced into (small claims) court ... and since I was wrong, my damages were no greater than demanded by letter and my downside to ignoring was zero. But for all those other times, ignoring is the best policy. or rather, ignoring is bliss. :)

Besides, in this particular instance, I haven't seen any evidence of damage as the individual above closed on the apartment knowing full well, in advance, of the actual charges - the amount of time prior to closing has no relevance. Also, since the extra $100 per month goes to the co-op for services for the apartment owner, there can be, by definition, no damage at all. And again, even if you disagree with me, if I were the broker or the lawyer, I'd be glad to receive your letters ... and ignore them.

Thanks for playing.

The buyer says the error was noticed at closing. If this is the case, then the buyer had the option of walking away from the table until the discrepancy could be addressed and amended. He chose not to do that, and instead went forward with the purchase. How, exactly, does this entitle him to any damages?

The buyer is just a whiner.

and babsie is a fool. even she can't state why or how exactly the purchaser is damaged and what position they would be in but for the error.

Isn't it obvious what the damages are? What he has to pay extra in maintenance! I understand the argument that the buyer could have pulled out at the last minute and that is a defense that all of these people can make, but fact is fact that all of these people either lied, misrepresented or breached a duty to the buyer. I get everyone's argument that the buyer may have "waived" his right to complain because he closed, but there is another argument that he was mitigating his damages by closing on the apartment and retained his right to sue for damages in the future. As none of you are lawyers, I respectfully disagree with your analysis, but understand that this is not an open and shut case. There are defenses that will be made by all parties, but the buyer does have a cause of action against these people. Most litigation is not so black and white and there nuances in the facts on all sides, but the buyer does have a case against these people that will likely not be dismissed by the courts before it goes to trial and therefore, it behooves some of these people, if they are smart (and the insurance companies that stand behind the broker and the lawyer!), to settle with this buyer. They can fight to the end..that is their choice, but if the lawyer and the broker are sued, they have to tell their E&O carriers, and then the insurance companies' lawyers are in charge of this case, not the broker or the lawyer and it will make the decision to settle or not.

Babs, you are so wrong. And what makes you think you are the only attorney on here? The damage is not obvious. It doesn't even exist. But for the misrepresentation, the buyer would not be paying $100 less maintenance. The maintenance is what it is. The buyer does not state she was somehow induced to enter a contract s/he would not have entered if the figure had been correct. The buyer has not said that s/he feels too much was paid for the unit in light of the actual maintenance figure. Had the buyer walked away for breach of a material term, the seller/attorneys/agents would have jumped in to save the deal. And had the buyer actually walked away, then a suit for lost transaction costs and fees against the lawyer and agent (let them figure out who owes the buyer what) may have laid. But having gone through with the deal was essentially to ratify the amended contract. There is no reservation of rights. The suit you suggest would be tossed on a motion to dismiss for failure to state a claim. At best, if you were litigating against someone incompetent (not me), you might get all the way through to have the case dismissed on summary judgment. There is no claim. The damage is not obvious. There is no damage.

lol Babs and help_please