Can a COOP Board require a perspective buyer to spend certain amount in renovating the apartment as a condition to purchase?

Asked by Elena Ravich, Esq., New York, NY Fri Feb 24, 2012

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Josh Rubin, Agent, New York, NY
Sat Mar 3, 2012
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Buyer should play poker as it's the seller's responsibility to warrant that there are no leaks to or from the apartment. It seems the board knows of a leak, but isn't sure whether it's coming from this apartment, and wants to make sure there are monies to repair such leak in the event it's found to be emanating from the apartment.
1 vote
Elena Ravich,…, Agent, New York, NY
Sat Mar 3, 2012
Josh, thank you! This is exactly on point :)
1 vote
Elena Ravich,…, Agent, New York, NY
Sat Mar 3, 2012
Thank you for your answers - it does make sense when a Board provides all specific information and explains their requirements.

I wonder what would you do in a situation like that not to ruin the deal and still negotiate in the best interests of buyer: recently a coop board required my client (a buyer) to escrow a significant amount of money to fix "a leakage from the apartment" and neither the seller nor building super know anything about such leakage, and the Board does not provide any factual information or documents to confirm the facts and extend of this problem. In the absense of this information the Buyer has no way of knowing if the problem really exists and if the requested escrow amount fairly represents the costs of necessary repairs, etc. I am just wondering if anyone has been in a similar situation and how it worked out.
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Josh Rubin, Agent, New York, NY
Sat Mar 3, 2012
Yes, a co-op board can mandate an apartment be renovated as part of the condition of the approval of the sale. Furthermore, the board can be specific with regard to scope of work that will be expected of the prospective buyer.

I've represented a co-op board which owned a unit formerly occupied by a rent-stabilized tenant. The apartment was dated to say the least, and the board made required renovations part of the sale. We priced it accordingly and got 25% over its asking price.
Web Reference:  http://www.elliman.com/jbr
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First Last, , 90002
Wed Feb 29, 2012
A co-op board can turn down a prospective purchaser for any legal reason. If the prospective purchaser does not have enough capital to improve the property to the board's specifications, e.g. remove hazards or bring it up to code, etc., then to the best of my knowledge, the board can turn down the purchaser. However, the devil's in the details and this issue really must be brought to an attorney who specializes in real estate law in NYC for an authoritative opinion.

Karla Harby
Lic RE Salesperson
Charles Rutenberg LLC
212 688 1000 x146
kharby@crrnyc.com
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