Buying Manhattan RealEstate After Super Storm Sandy
I represent a purchaser who is currently in contract to buy a Manhattan property. Is my client obligated to proceed with his/her purchase if the unit was severely damaged as a result of Super Storm Sandy?
It depends. In New York, most residential real estate contracts follow New York General Obligations Law, which puts the “Risk of Loss” on the Seller in real estate transactions. In the event that a material part of the property is destroyed (through no fault of the Purchaser) when neither legal title nor possession of the property has been conveyed to the Purchaser, then the Purchaser will have a right to cancel the contract. If, however, an immaterial part of the Manhattan property is destroyed (through no fault of the purchaser), then the Seller can enforce the contract against the Purchaser, except that the purchase price would be abated to the extent of the destruction.
I suggest getting an inspection. A full inspection of a building may run you about $1500. This will help you ascertain the extent of the damage and the level of repairs for a building that you are buying into.
Tip: Inspections are not normal practice when buying into a co-op or condo unit since the building and management typically is in charge of anything that goes wrong outside of your unit. Sellers: You may want to gather as much documentation to hand to the buyers about what damage ensued and how it was remediated due to the storm. This will make your sale goes much smoother.
Thanks to Neil B. Garfinkel, REBNY real estate counsel.