What Could Go Wrong, Inc.
A close friend of mine once said to me "you should be president of What Could Go Wrong, Inc." She said this because I have the sometimes annoying quality of taking a close look at a situation and identifying the possible trouble spots. ("The last time we ate at that restaurant, it took a half hour before anyone took our order." "The last time we ordered ice cream from Fresh Direct, it was melted." Etc.)
I may soon have an opportunity to make use of my talent. A colleague called me today - I dare him to post a comment - and asked me if I could do "due diligence" for a client who is interested in buying an IMD building. (IMD means "interim multiple dwelling." An IMD building is a building with residential loft units which are subject to Article 7-C of the Multiple Dwelling Law, otherwise known as "the Loft Law"). I explained what would be involved.
First, I would review all of the Loft Board's files on the building. The files would tell me which units are "covered" (rent regulated by the Loft Law), which units were deregulated because of a buyout (a sale and purchase of rights and improvements), whether the owner has taken any code compliance steps (obtaining a residential certificate of occupancy is a requirement of the Loft Law), whether there are any applications pending (such as a tenant application claiming a huge rent overcharge), whether any fines or registration fees are outstanding and the names of the tenants and maybe I would find out their legal rents. I would even find out the name of the tenants' attorney and offer an opinion about him / her. (I know them all). Code compliance is particularly important. If the landlord hasn't met the code compliance deadlines, then the covered tenants are not obligated to pay their rent! And the Loft Board may impose monetary penalties!
Second, I would write up a thorough report. Third, I would discuss the report with the client.
I would never say "don't buy this building." I would say "this is what you're getting into." Under skillful management, what could go wrong could go right.
I may soon have an opportunity to make use of my talent. A colleague called me today - I dare him to post a comment - and asked me if I could do "due diligence" for a client who is interested in buying an IMD building. (IMD means "interim multiple dwelling." An IMD building is a building with residential loft units which are subject to Article 7-C of the Multiple Dwelling Law, otherwise known as "the Loft Law"). I explained what would be involved.
First, I would review all of the Loft Board's files on the building. The files would tell me which units are "covered" (rent regulated by the Loft Law), which units were deregulated because of a buyout (a sale and purchase of rights and improvements), whether the owner has taken any code compliance steps (obtaining a residential certificate of occupancy is a requirement of the Loft Law), whether there are any applications pending (such as a tenant application claiming a huge rent overcharge), whether any fines or registration fees are outstanding and the names of the tenants and maybe I would find out their legal rents. I would even find out the name of the tenants' attorney and offer an opinion about him / her. (I know them all). Code compliance is particularly important. If the landlord hasn't met the code compliance deadlines, then the covered tenants are not obligated to pay their rent! And the Loft Board may impose monetary penalties!
Second, I would write up a thorough report. Third, I would discuss the report with the client.
I would never say "don't buy this building." I would say "this is what you're getting into." Under skillful management, what could go wrong could go right.
posted by Linda Rzesniowiecki at
4:35 PM
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