October 16, 2010
Bedbugs Have Crept into Contracts
Bedbugs and real estate contracts seems to be a topic in regular rotation in the New York Times. (See previous post, Timeless Topics: Insects and Real Estate Contracts). Today's paper reports on the pesky little bedbug problem and the emerging practice of bedbug disclosure riders:
The New York State Legislature passed a law this summer requiring city landlords to disclose any history of bedbug infestation before leasing an apartment. Real estate lawyers and brokers say that even though the law was intended to address rentals, bedbug disclosure has become an issue in the sales market as well.
The law requires landlords to give renters written notice before a lease is signed indicating whether the apartment being considered, or any other apartment in the building, has been infested within the last year. Anyone renting out an apartment in a co-op or condo would also have to comply with the law.
There has been confusion in the real estate industry over the scope of the law, but Nancy Peters, a spokeswoman for the state’s Division of Housing and Community Renewal, said last week that co-ops must also follow the law when there is a sale, because new buyers enter into a proprietary lease.
The division has issued a form (http://www.dhcr.state.ny.us/Forms/Rent/dbbn.pdf) with a checklist that clearly states whether there has been any bedbug infestation in the apartment or in the building within the last year, and also whether any “eradication measures” have been taken. There is no penalty for not complying, although renters who do not receive a disclosure form can file a complaint requiring disclosure.
In recent weeks, some lawyers representing co-op and condo buyers had already made bedbug disclosure a part of contract negotiation.
In early September, about a week after the law went into effect, Daniel Farris, a senior vice president of Brown Harris Stevens, said he came across a bedbug rider while reviewing a client’s proposed contract to buy a two-bedroom co-op on the Upper West Side.
The rider, which was proposed by the buyer’s lawyer, read, “The seller has no knowledge of the existence or presence of bedbugs in the unit either currently or in the past.” The seller signed the rider, and Mr. Farris’s buyer is now in contract for the apartment. Mr. Farris said he routinely counseled buyers to ask whether a unit has had a history of leaks or other problems and to have the building checked for rodents. He said he thought the rider made perfect sense, “for your own level of comfort; a buyer should know what they’re getting into.”
You can read the rest here.
[Meredith R. Miller]
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