The Blank Slate: It comes up every once in a while- often in the 4-story brownstone type co-op. The handshake is made and the seller’s lawyer sends the contracts. The buyer’s lawyer calls to make an appointment to review the minutes and guess what? There aren’t any minutes or maybe there are just a few from a couple of meetings a few years ago when they bothered to keep the minutes. Even worse, the building is self-managed so there is no manager to get information from. What’s a buyer to do?
The easy answer is run for the hills- find another co-op-just forgetaboutit!!! But what if you simply love the apartment and just have to have it?
One solution is do as much due diligence as is possible and then see how you feel. Start by having a frank face-to-face discussion with the seller about what has been happening at the co-op. Find out if there are any major repairs or renovations planned- try to weed out problems (i.e. thefts, strange neighbors, lawsuits, leaks, when the mortgage is due, what sort of repairs are upcoming, etc.) Definitely have both your apartment and the entire building inspected by a reputable engineer so you can really find out what is going on with the structure of the building and your unit. Take a VERY close look at the financials over several years and have a call with the co-ops accountants. Have your lawyer search for litigation about the building. Check out the Department of Buildings website- see if there are violations, open building permits, etc. Try to make sure that the renovations the seller was so proud of and you are paying a pretty penny for were done legally. Speak to as many other owners as you can (especially those surrounding the unit) –separately- basically you will be interviewing them and not the other way around. If after all this you want to move forward, at least you are doing so with somewhat of an open eye.
A word of advice if you are in one of these smaller somewhat mismanaged co-ops. Do what you can to make all of the apartments more appealing to buyers. I don’t see any reason for anyone to lose a buyer or get less of a price because the Board doesn’t keep minutes. Make sure that the board meets at least once a month and appoint someone the scribe to keep an official set of minutes. That will make it easier on the buyers and increase the marketability of every one’s unit. It is all good-except that it is a bit more work than you may have been doing in the past.