Sun, Apr 01, 2007 - Page 9 News List

The danger's in the fine print

New Yorkers participating in the city's property boom are buying houses that have not even been built, with the finished article not always meeting up to the buyer's expectations

By Vivian Toy  /  NY TIMES NEWS SERVICE , NEW YORK

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 cannot see them, smell them or touch them. When they finally do, they may be in for very big surprises, some of them infuriating.

Rooms are often smaller than advertised. The Viking stove is not 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 US$200 deposit for the thrill of getting three days to review the plan, sometimes 500 pages or more. It includes floor plans; tables with 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 is a long way of saying 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 be a challenge.

Margery Germain said neither she nor her husband, Mark, noticed the fine print in the offering plan explaining that although their Chelsea apartment had been marketed at 1,500 square feet (140m2), it really would not be that big because the figure measured the space to the unit's exterior walls including space they could neither see nor use.

Germain walked through the building for the first time last September, she said, and was devastated when she stepped into what would be her two-bedroom apartment.

"I was horrified. I ran out and called my husband and said: `It's tiny. What are we going to do?' Compared with the floor plan we had been given, every room had lost some square footage. It wasn't what we expected," she said.

Their lawyer explained that there was nothing to be done because the offering plan had a disclaimer: Total square footage was only approximate. But in the end, the Germains were able to make the fine print work for them.

As soon as they could, they took advantage of an escape clause that allowed them to walk away from the deal and get their deposit back because the building was not ready for occupancy when it was supposed to be, by the end of last year.

The Germains, who are empty nesters looking forward to downsizing from their home in Scarsdale, New York, and moving into the city, decided that buying from a floor plan was not for them. They have since signed a contract for a loft in a converted warehouse that is not yet completed.

"But we've seen the space," she said, "and we know what we're getting this time."

Pitfalls

Their experience illustrates the potential pitfalls that home buyers face when they buy a condo before it is built. Since all they have to go on is a floor plan, artist's renderings and a model kitchen and bathroom, they cannot know for sure how much light the living room gets or how a king-size bed will fit in the bedroom. So much must be left to the imagination that expectations can easily wind up not meeting reality when the building is finished.

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