did your attorney use The Google for due diligence? would help at 150 Nassau Street

Note to Self …
When I see a news article like the one today on DNAinfo in which a city official says there are "imminent safety concerns" over facade work being done at the Manhattan loft building 150 Nassau Street, I wonder about how that might be reflected in the condo board minutes. And I wonder if buyer attorneys routinely use The Google as part of their due diligence review. (I should check with attorney pals….)

In this case, I would bet my standard $0.25 that board minutes reflect that repair work is ongoing on the 150 Nassau Street facade without the use of alarming language like "imminent safety concerns". I’d be willing to double my usual bet that there is nothing (yet) in the standard due diligence materials about the City’s threat that the condo will have to pay for $50,000 in water main repairs if the facade work is not finished on schedule.

facade slowing water
The news is that the city’s water main project along Fulton Street (“seemingly never-ending”, per @JulieShapiro) have already been complicated by scaffolding set up around 150 Nassau Street, with a 3-week hiatus required and a re-ordering of water main work not resulting in a delay in the overall project (so far). Residents have been complaining (of course) about the “seemingly never-ending” water main project along Fulton Street, including at a Community Board 1 meeting last week.

I assume this was not a surprise to the condo board at 150 Nassau Street (or to residents), though it might surprise potential buyers in the building:

The city’s engineers found a way to change the order of water main construction to prevent the overall project from falling behind. But if the work at 150 Nassau St. is not done by the beginning of April, clearing the way for the city’s contractor to get started, the city will apply more pressure, officials said.

"Come April, if [the 150 Nassau St. repairs] aren’t done, we’ll…issue violations to the owner and they’ll have to perform the work themselves," Foley told CB1. "They will be responsible for the cost, [which is] more than $50,000…. Hopefully that will be incentive enough."

Pandora (hearts) Local Law 11
I have no idea how long the facade work has been going on at 150 Nassau Street, nor what their engineer or architect report that prompted the work reflects, but facade work is famously unreliable to predict. Once a parapet or brick work is opened up, the range of possible work required to fix whatever problems are revealed is pretty wide. Projects that “might” take xx weeks can end up taking 5xx weeks (and costing 5 times the low-end budget projection).

With a beautiful building like 150 Nassau Street, there are special concerns. (And special concerns are always expensive; the more so if there are gargoyles and/or winged women involved.)

The repairs at 150 Nassau St., a converted condo building near City Hall that once housed the New York Sun, include removing and restoring decorative pieces of the façade, including gargoyles and sculptures of winged women, according to the Department of Design and Construction and the Landmarks Preservation Commission.

Significant facade repair in a condo almost always involves an assessment, though I don’t see evidence of an assessment in our data-base or in the active building listings. If there is an assessment, that will be reflected in condo board minutes, of course. And experienced counsel should inquire about Local Law 11 compliance in any case, as a risk factor for potential buyers. But I wonder if buyers and counsel who were not following DNAinfo or using The Google will discover the possibility for $50,000 in water main work to be billed by the city.

With a conversion to residential lofts completed in this building only in 2002, I would wonder if the required facade work raises questions about the quality of the sponsor’s work in general. In other words, it might make prefect sense for an informed buyer to purchase a unit in this building but more diligence is due in this situation because of the facade project and (even more so) because some city engineer says there are "imminent safety concerns".

But maybe that’s just me.

Note that one set of (presumably well-informed) current unit owners recently doubled their investment in 150 Nassau Street, as recounted in my December 14, private sale of 150 Nassau Street loft with high-floor premium or neighborly extortion. The numbers work for them. And it is always a question of numbers, isn’t it?

© Sandy Mattingly 2011


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