March 26, 2007
Times on Real Estate Transactions
Yesterday's NY Times has a great article on real estate transactions involving as-yet-unbuilt properties. An excerpt:
IN New York’s construction boom of the last few years, many people have been buying apartments in buildings before they actually rise out of the ground. The buyers can’t see them, smell them or touch them. When they finally do, they are sometimes in for very big surprises, some of them infuriating.
Rooms are often smaller than advertised. The Viking stove isn’t there, but a stove described as being of “similar quality” is. The view is not at all what the buyers imagined.
Were they deceived?
Not necessarily. In many cases, neither they nor their lawyers read the offering plan carefully. Buyers often must hand over a $200 deposit for the thrill of getting three days to review the plan, sometimes 500 pages or more. It includes floor plans; tables that provide square footage, estimated taxes and common charges; and detailed descriptions of construction materials and apartment finishes. But it is also filled with technical and legal language that would be indecipherable to anyone other than a real estate lawyer.
Consider this piece of boilerplate: “The gross square footage of a unit is greater than the approximate square footage of a unit measured by using the legal definition of the unit. ... As is customary in New York City, these gross square footages exceed the usable floor area of each unit.”
That’s a long and strange way of saying that the apartments will probably be smaller than the buyers have been told. Brokers and lawyers say that virtually every new development’s offering plan includes this type of disclaimer, but finding it can often be a challenge.
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