Sandor Krauss, Esq.

When you buy a co-op or condo, you’re also buying into a building.   Is it financially healthy? Physically fit? Are there any quality of life issues that could diminish the enjoyment of your new home?

A review of the financial statements by your accountant or attorney will only take you so far. An essential place to look for clues to the bigger picture is the board minutes--the recorded notes of the issues discussed at monthly board meetings.

When you sign a contract to buy a NYC apartment, you're typically required to hand over 10% of the purchase price as a contract deposit. While most buyers understand that they may lose it all if they back out of the deal, many are unaware of other circumstances that can put their deposit in jeopardy.

Here are two ways you can lose your deposit permanently--or just temporarily, while you spend time and attorney's fees haggling with the seller to get it back:

1.  The co-op board rejects you

If you’re considering buying a new condo, you may be familiar with some of the risks, such as construction defects, sponsor control of the board, warranty and punch-list issues

But if you’re anything like the clients who walk into my office every day, there are a few more potential time bombs that may take you by surprise:

1.  The developer has the right to convert the building into a rental—and hang onto your deposit for months until the switch is official

Real-estate lawyers in New York tread carefully when a client asks about buying in a land-leased/ground-leased building, where the cooperative (and in rare instances, the condominium) owns the building, but not the land on which it sits. Instead, the co-op typically has a long-term lease on the property—very long term, as in up to 99 years. The pitfalls are many in what is often a buyer-beware scenario.