Page 5 - CooperatorNews New York August 2021

COOPERATORNEWS.COM COOPERATORNEWS — AUGUST 2021 5 QUESTIONS & ANSWERS Legal Q A& Buyer’s Remorse Q I signed a contract at the end of November 2020. There was an increase in the maintenance in February 2021, so it’s likely they got no- tice of this in December. Unfortunately I wasn’t given notice of this $55 increase per month until three business days be- fore my closing. When I was consider- ing apartments I didn’t want to go over a certain sum in maintenance, and the in- crease takes me past that limit. Do I have any recourse since they did not inform me about this change? —Seeking Redress A “When purchasing a co- operative apartment,” says Cathleen Hung, attorney at the New York office of law firm Anderson Kill, “one of the things you will see listed on the first page of your contract is the amount of monthly maintenance you are expected to pay for the apartment. How- ever, there is a period of time between when you sign the contract and when you actually close on the apartment. Any maintenance amount set forth in the con- tract is based on the current number as of the date you execute the contract, and there is no guarantee that it will be the same amount by the time you get to clos- ing. And there is little to no recourse even if the Seller failed to notify you of the new maintenance increase, especially since the accuracy of the maintenance amount can be verified by pre-contract due diligence. “Since you signed your contract in November 2020 and the maintenance increase was implemented in February 2021, there must have been some indi- cation that a maintenance increase was on the horizon. Before you signed your contract, your attorney would have done his/her due diligence on the cooperative. That would involve reviewing the board minutes and/or having the managing agent answer a questionnaire that in- cludes whether any future maintenance increase was under discussion. Either op- tion would have provided you with notice that a maintenance increase was in the works. “Unless your contract specifically in- cludes a provision that gives you the right to terminate the contract if the mainte- nance is increased above a certain amount prior to closing, there is not much you can do other than back out of the deal and lose your contract deposit. To the contrary, most contracts I have seen in- clude a rider that states that the Seller will notify the Purchaser if the Seller receives notice of a maintenance increase, but this is done only as a courtesy and shall have no effect on the Purchaser’s obligation to close on the apartment.” Dangerous Mitchell-Lama Resident Q I have lived in a Mitchell-Lama co-op since 1992 and never re- ceived a copy of the complete house rules. I have been assaulted by a neighbor’s husband; he is not a tenant on record yet lives here and is a very dan- gerous person. Does the Department of Housing Preservation and Development (HPD) investigate the background for all family members before granting approv- al? And is the resident required to show his income to HPD? —Looking for Background A Dov Treiman, managing partner in the landlord- tenant division of New York law firm Adam Leitman Bailey, P.C., says, “In a Mitchell-Lama cooperative, HPD does not do background checks on family members at any time. It is entirely up to the cooperative board to determine what kinds of background checks they do and do not want to do before processing purchase applications. Since cooperatives are actually landlord-tenant relationships (appearances to the contrary notwith- standing), the new laws passed in 2019 severely constrict the fees that Mitchell- Lama cooperatives can charge for these checks. While few boards did background checks on family members even before these laws, the $20 limitation on fees the board can charge makes such checks prohibitively expensive, especially in a Mitchell-Lama development, where there are serious restrictions on how expensive the facility can be and how much money the board can gather for its needs. “Annually, each Mitchell-Lama coop- erator must report to the board the to- tal household income for those who are living in the apartment. Failure to do so can result in serious increases to the maintenance fees the board charges for the apartment, sometimes pentuple what the normal maintenance is. Failure to re- port these sums accurately is grounds for evicting a cooperator, although the Hous- ing Court usually allows late filings to correct matters. However, fraudulent fil- ings are generally not forgiven. continued on page 5 “FirstService Residential has been our managing agent for decades. Whether finance, day-to-day problems or getting through a big capital project, the team shows up with great ideas and solutions. Our property manager’s leadership, coupled with the rest of our FirstService Residential team, makes our staff and our board function better. The email I just received from FirstService Energy double assured me that being under the big FirstService Residential umbrella is the only way to go. I sent it out to everyone on the board telling them the same.” >> Stephanie G., Board President 200+ unit cooperative Upper East Side www.fsresidential.com/new-york LetsTalk.NY@fsresidential.com 212.324.9944 New York’s Property Management Leader Making a Difference. Every Day. continued on page 12