Homebuyers on the hunt for their new apartment in NYC often fall into the same traps. They only think about what sort of color scheme they will go for, how many people they can invite for cocktail parties, and so on. Instead, they should be asking the listing agent more pointed questions about the building’s policies and their legal standing.
Whether you’re relocating to the city for the first time or shopping for an upgrade, before you make an offer on a condo co-op apartment, you’ll want to ask the listing agent some questions. Here are some crucial questions to ask, no matter where you’re trying to buy.
How old is the building, and when was it last renovated?How old is the building, and when was it last renovated?
New York is certainly known for its prewar buildings’ beautiful charm, but there’s a fine line between historic charm and just plain old. It would help if you asked how long it’s been since the utility systems – plumbing, wiring, heating – were upgraded when viewing older properties. Fail to get the facts on this, and your dream home can quickly become a black hole for your wallet. You might also find our article about questions to ask a building management company helpful.
What is the square footage of the apartment?What is the square footage of the apartment?
When asking about square footage, keep in mind that there is no universal method for measuring it. You must know what’s, included when you ask for a number (usually a rough estimate). There’s the walls-out method where all space, even those taken up by walls, is included. Then there’s the walls-in livable space method where the space taken up by walls and non-livable areas (closets and hallways) is excluded. Listing agents will sometimes overestimate the size, so the only way to be sure is to hire a drafter to measure it for you.
How friendly/reasonable is the board?How friendly/reasonable is the board?
If you’re scoping out condos and co-op apartments, the building’s board will have a significant impact on both the purchase and your living quality. As such, it helps to know if whether or not they are reasonable and friendly. Naturally, if you ask the listing agent this, they’ll say very friendly, but you can look for clues in how they said it. It is where having your own buyer’s agent can come in handy. They can ask around and do a little investigating to see if any of the board’s members are capricious or downright bonkers.
Is there any pending litigation in the building?Is there any pending litigation in the building?
Proceed with extreme caution if there is any legal action taken against the building. If it’s between the shareholders and the building, things can get highly expensive and unpleasant for all the owners. While larger buildings can often blunt the impact of delinquencies and litigation on their budget, smaller buildings usually can’t. It can result in everyone’s monthly, common charges going up.
Unit ownership percentage: Primary User vs. Investors?Unit ownership percentage: Primary User vs. Investors?
What percentage of the units are owner-occupied, and what percentage rented out to tenants? Generally, buildings with a higher percentage of owner-occupants are more marketable when reselling the property.
What are the House Rules/ByLaws?What are the House Rules/ByLaws?
Ask for a copy of the house rules and bylaws; if possible, review them with your buyer’s broker and attorney. Be aware of any grandfather clauses that govern the property. You may find that residents who bought the property after a certain date can’t rent out their unit, while those who bought earlier can, for example.
How are the building financials?How are the building financials?
Ask for a copy of the building’s financials. How much money does the association or board keep in reserve, and how is it invested?
Are there any current or future assessments?Are there any current or future assessments?
Are assessments keeping pace with inflation? Is the board raising assessments each year to build reserves to fund future repairs? Compare assessments to other condo developments and co-ops in the area to determine if they are reasonable.
What is the reason for the assessment?What is the reason for the assessment?
What is covered by the assessment? Maintenance of the common areas, recreational facilities, Local Law 11 building repointing, trash collection, and snow removal are common activities paid by condo associations and co-op boards. Be sure to find out what is not covered, as well.
Do you know the historical frequency of assessments?Do you know the historical frequency of assessments?
Were there special assessments mandated in the past five years? How much was each owner’s share? Some assessments are unavoidable, but frequent, costly assessments may be a red flag indicating a building in poor condition or imprudent financial policies with the board itself.
Is there a high turnover of sales in the building?Is there a high turnover of sales in the building?
How many apartments have sold in the building in the past 12 months, and how often do they sell?
Is there any pending litigation on the building?Is there any pending litigation on the building?
Is the board involved in any litigation? Lawsuits involving homeowners or developers can rapidly deplete association reserves.
Are you aware of any structural issues?Are you aware of any structural issues?
Has the building’s developer worked on other projects? If your development was converted to condos or co-ops for another use, ask for an engineer’s report. If the roof, windows, and bricks are in poor repair, they will affect the value of your housing investment and possibly your quality of life.
This information will help you decide if the condo or co-op unit is right for you; it will also give you some insight into the condo board’s cooperation, organization, and helpfulness.
Is the building on a ground lease?Is the building on a ground lease?
Any building on a ground lease does not own the land it is built on. If so, before proceeding further, you should determine when the lease expires and what the renewal terms are. If there are no pre-agreed terms for renewal, it would probably be better to start looking elsewhere. Renewing a ground lease can be very expensive, and if not renewed, the entire building could become forfeit.
What is the sublet policy for the apartment?What is the sublet policy for the apartment?
Even if you plan to remain in place for many years, it’s essential to know the sublet policy. The ability to sublet dramatically increases the marketability of the home. It can also be a good source of income if you ever decide to take an extended vacation. Make sure to ask for a copy of the sublet application. That way, you can see how easy/difficult it would be to sublet should you choose to in the future.