Questions to Ask When Viewing an Apartment to Buy in NYC

Before you wander into the next open house, make sure you know what are the relevant questions to ask when viewing an apartment to buy in NYC.

This way, you’ll save having to come back for a second viewing just to ask the following questions which are an important part of preliminary due diligence.

This is one of the most important questions to ask when viewing an apartment to buy in NYC. That’s because some buildings in New York City are built on land that they do not own.

As a result, they pay ground rent to the actual landowner. These buildings have a lease with a specific term, sometimes with renewal provisions.

Many investors and foreign buyers will simply not be comfortable with the idea of buying a home on land that is owned by someone else. That’s because any additions or structures built by the tenant on the land becomes the property of the landowner if the land lease expires or is not renewed for some reason. As a result, it’s extremely important to know how many years are left in the ground lease and what the terms for renewal are.

Furthermore, it’s very important to understand who the landowner is. Private landowners may be tougher to negotiate with when a land lease expires. However, non-profit landowners such as the Catholic Church may be easier to deal with.

Many home shoppers give up on finding out the size of an apartment as soon as the listing agent tells them that it’s unknown or that coop apartments typically do not have a listed square footage.

Even condo apartments will often not list the square footage, perhaps to hide the fact that it is over-priced. Fortunately, there are ways for home owners to find out on their own.

One of the really good questions to ask when viewing an apartment to buy in NYC is whether there is a square footage listed in any of the building documents, such as the original offering plan.

Furthermore, if the property is a condo, you can ask what the property’s latest Notice of Property Value from the NYC Department of Finance says the property’s square footage is.

This is super important when it comes to buying a coop in NYC.

That’s because co ops generally prefer full time residents vs subletters and even part time residents.

As a result, a co op’s house rules or bylaws will generally contain information on the sublet policy for the building. While sublet policies will vary depending on the building, it’s common to see that subletting is allowed for only 2 out of 5 years. Most coops will not allow you to sublet right away, and some will only allow subletting for hardship reasons or not at all! This is an important consideration for you to make before buying a coop in NYC.

What if you need to move in a few years?

Coops and condos will often have various fees levied on home owners who wish to sublease or rent out their apartment.

This is one of the most important questions to ask when viewing an apartment to buy in NYC if you are an investor. That’s because hefty sublet fees can really eat into your projected returns. Some buildings will charge a flat fee, typically payable to the managing agent, to rent or sublease your unit. However, some coops are known to charge much more excessive amounts for subleasing.

For example, a coop that wants to discourage subleasing may charge a fee equal to the entire monthly maintenance every month! That would mean you are paying double maintenance just to sublease your apartment!

Even for condos, it’s not uncommon to see a flat fee of $500 payable to the managing agent in order to rent out your apartment.

Maintenance and common charges are like taxes. Once they are increased, they never go down.

As a result, it’s extremely important for you to understand the pattern of maintenance increases over the past several years. If maintenance keeps steadily increasing, it may mean that the building is poorly managed and that the board has no fiscal discipline.

Some boards are simply composed of very inexperienced people who don’t know anything about what a housing service or job should cost. As a result, these boards will consistently be ripped off by everyone from the managing agent demanding consistent pay increases to contractors charging them outrageous prices for repairs.

You should look out for classic “power tripping” individuals or groups voting as a bloc. There are too many New Yorkers unfortunately whose only outlet for their angst is to take it out on their neighbors (perhaps you should simply buy your neighbor’s apartment?).

The last thing you’ll want is to be in a building with a power hungry board that never seems to want to step down.

A good way to find the inside scoop is to make friends with the doorman or superintendent.

Ask them how the board is and what life is like in the building. Since these guys usually have no vested interest in whether you buy or not, you’ll usually get a more honest answer.

This is an important question to ask when viewing an apartment to buy in Manhattan.

That’s because your bank may not agree to lend to a building that has too high a percentage of non owner occupied units.

The theory is that investors will be less likely than owners to make good on their mortgage payments if things go south, particularly because the unit is not where the investor is actually living.

Therefore, your mortgage broker or bank wants to protect against a scenario where a lot of investors default during a major recession.

That’s because even though your bank may not have lent to the investors in your building, their default will negatively affect you because it may cause the building to have a massive operating shortage.

This could result in huge one-off assessments or common charge increases levied on you, which may affect your ability to pay your own mortgage!

Ordinary folks buying a home in NYC will not even know the difference between a condo vs apartment, let alone the difference between a co op vs condo.

However, if you are buying a co op in NYC, it’s very important to ask whether the building charges a flip tax. Even though this flip tax is often paid by the seller and goes into the building’s reserve fund, it’s an additional closing cost that you would have to deal with when it comes time to sell.

The flip tax can be a fixed fee or a percentage of the sale price. It’s common to see flip taxes for co-ops be anywhere from 1% to 3% of the sale price.

It’s important to understand that the monthly maintenance for co-op apartments consists of both “common charges” paid for the common upkeep of the building, as well as property taxes.

This is different from condos where NYC real estate taxes and common charges are separately listed.

Because the portion of maintenance attributable to real estate taxes are tax deductible, you’ll want to ask the listing agent or seller what percent of maintenance is tax deductible.

This is a common question on condo questionnaires or co op questionnaires that are requested by both attorneys doing due diligence on behalf of buyers or banks doing due diligence for themselves. This is such an important question because litigation can not only signal upcoming financial issues, but may also be a symptom of a problematic board or neighbor. The last thing you’ll want is to live in a litigious building.

Furthermore, many banks will refuse to lend to a building that has any pending litigation.

As a result, having ongoing litigation may cause the building to turn away many buyers who can only purchase with a mortgage.

An assessment is a temporary levy by the building to fund a special project or repairs that can’t be fully covered by the building’s existing budget.

Sometimes a special assessment is levied simply because the building’s reserve fund is running low. The real difference between assessments and common charges or maintenance is that assessments are meant to be temporary. Assessments can be levied all at once, or the assessment can be spread out over multiple months.

This is one of the questions to ask when viewing an apartment to buy in NYC that people usually forget. While one off assessments are sometimes disclosed near the bottom of listing descriptions, they are often left out altogether. The only way to find out is to ask, or wait until your lawyer hopefully discovers it during due diligence.

Local Law 11 is a façade inspection law that requires buildings six stories and taller in NYC to have their facades inspected and repaired every five years.

This law supposedly came into being when a brick from a crumbing façade fell on and killed a girl many years ago. As a result of the public outrage at the danger of New York’s many crumbling buildings and dilapidated facades, Local Law 11 came into being.

As you can imagine, if a Local Law 11 inspection mandates significant repairs to be made, this will not be cheap. This is why you should ask when the last inspection occurred and if any repairs are currently being made. You can often tell if repair work is ongoing by the scaffolding that will be on the exterior of the building.

Finding out the status of Local Law 11 work will be important so you won’t have to face any unexpected, large assessments for repair work.

If your building has landmark status, then you’ll have to get the permission of the Landmarks Preservation Committee (LPC) to make any changes whatsoever to the exterior.

In fact, even any repairs to the façade will have to be painstakingly approved by the LPC.

As you can imagine, this will add to the hassle and cost of any repair work, including Local Law 11 façade repairs. If you are buying a landmarked building, just be prepared to have a more onerous process should your building need to do any repairs or alterations to the exterior!

This question is rarely asked by apartment hunters in NYC. That’s because most buyers will not know the difference between a legally combined apartment and one that is not. A legally combined unit will only have one property tax bill and will be legally considered one unit by the NYC Department of Finance.

In contrast, a combination that has happened in reality but has not been legally combined will receive separate property tax bills. Even though the combination may still be allowed and is habitable, the city still views the units as separate apartments.

You may encounter more paperwork as a result of owning two separate units that happen to be physically connected.

Exclusions are specified items in the apartment that are not included with the sale. Inclusions are specified items in the apartment that are included in the sale.

Unless otherwise specified, everything that is sturdily attached to the apartment is included with a sale, including appliances.

The classic example is to imagine that the roof of the apartment has been removed and the apartment is turned upside down. Everything that falls out is not included. Everything that does not fall out is included.

However, sometimes the owner has a special attachment to a light fixture, for example, elegant crystal chandeliers which he or she wishes to keep. In this case, the listing agent would need to make sure that the chandeliers are an exclusion, and do not come with the sale.

The last thing you’ll want is to move into a building that has a leaking roof, or a roof that needs to be repaired soon.

Roof repairs can be quite expensive and can lead to a hefty assessment which you may not anticipate.

This will be especially important if you are buying a standalone property like a single family or multifamily house or townhouse. That’s because you will be solely responsible for the roof, and you won’t want to buy a property that has a roof that needs immediate repair.

Or at the very least, you’ll want to buy at a price that reflects the poor condition of the roof. If you are buying a townhouse or a single family home, then it’s important to get a home inspection done so you can gauge the quality and condition of the roof.

For other types of apartments in NYC like co ops, condos, or condops, you’ll at least get the share the burden of repairing the roof with everyone else in your building. However, roof repairs can still be extremely expensive even when the cost is shared. Be wary of large one-off assessments for large repair projects like this!

Boilers can be extremely expensive to replace.

In Manhattan, you can easily see quotes of $10,000 or more to replace your average boiler. Furthermore, because plumbers and other types of contractors are more than happy to rip off your average Manhattanite, you’ll be billed as much as possible for labor as well.

Don’t let contractors into your home without a quote in advance.

Be very careful of ever letting any plumbers or other workmen into your home without a specific quote for services you’ve agreed to.

If you make the fatal mistake of just letting them come into your home or building to see what’s wrong, you will be billed arbitrarily for the cost of their time. Furthermore, a common trick by these blue collar contractors is to send multiple people from their company just to stand around in order to rack up labor cost.

Contractors are experts in small claims court.

And don’t even think about disputing their arbitrary invoices in small claims court.

Most of these plumbers and other contractors are professionals and very experienced when it comes to small claims court.

You’ll likely be outmaneuvered and the arbitrators (less so the judges) are typically unkind when it comes to cases like this. For some reason, the arbitrators typically favor the “poor” contractors over the supposedly rich Manhattan home owner. Even if you very rationally argue that they never even fixed the problem, and how could you be liable for an invoice if you never agreed on a rate, they’d still say you’re wrong just because the plumber showed up and handed you an invoice. How despicable!