Law and Practices: Since 2005, many new condos were built and sold in the 5 boroughs. In recent years, many condo owners are selling because after 7-10 years, they either need to relocate or move into a house . Second-hand condo buyers have to pay extra attention, because the procedures will be different from buying a brand new condo from a developer.
Story: Mr. and Mrs. Kane bought a 6-year-old two-bedroom condo, close to the subway and with a parking spot in Bay Ridge, Brooklyn. They were very happy that they found their dream home, and most importantly, it is within a good school district. Several months after they moved in, they received a letter from the condo management stating that they have to pay an assessment for water charges, which amounts to over $1,000.
The assessment was to cover a previous unpaid water bill balance, and for the coming water charges. Each condo building should have some sort of capital reserve, just like a regular family is supposed to have some sort of savings in order to be prepared for emergency repairs or some future expenses. This particular condo building had used up the capital reserve on prior repairs, and does not have enough money to pay for the coming water bill, which must be paid, otherwise interest will be accumulating on a daily basis.
The couple is very angry and trying to refuse to pay, however, since they are the unit owners, they have to abide by the By Laws of the condominium. Should they choose not to pay, the condominium Board of Managers has the right to fine them or put a lien against their unit. In addition, they will have to pay all the legal fees, interest and penalties.
Do they have any recourse to go back to the previous owner and sue them? No. In a real estate transaction in NYC, each party retains a lawyer and buyers are presented with the building financial statement. The previous owner did not conceal this information from them. A lot of information can be implied by reviewing the financial statement. A normal purchaser is not in a position to detect implications from the financial statement, but their attorney should. A lot of times the purchaser is happy when his/her bank approves the loan and never question what will happen after the Closing.
Resolution: If you are purchasing a second-hand condo, it is important to do due diligence, such as reading the financial statement and/or questioning whether some major repairs to the building are anticipated down the road.
 |
Jacqueline Huang Huang & Associates, P.C. 6402 8th Avenue, Suite 405 Brooklyn, NY 11220 Telephone: (718) 435-666 Email: jackiehuang@huanglawfirm.com  |
