If your favorite attorney lives outside NYC, don’t even think about asking for help

It seems that almost everyone has a brother-in-law, uncle, cousin, best friend or golf partner who is a lawyer.

How tempting to ask that individual to handle your real estate transaction.  The trust and savings that can be your benefit must be hard to match.

But if that attorney lives outside New York City, you may well be making a big mistake.

We conduct transactions here like no place else, unfortunately, and a lawyer unfamiliar with the process is prone to screw things up by causing delays and even precipitating the death of your transaction.

What brings the issue to mind was an experience a broker friend of mine had recently.  The buyer of one of her listings had a lawyer who sent to the building’s property manager a questionnaire that went on for an unprecedented (to my knowledge) 24 pages.  That’s not a typo: 24.  And, oh, he killed the deal.

Especially in New York City and more so in Manhattan, the co-op board approval process is uncommonly involved, and out-of-town lawyers lacking experience with such purchases should not be retained. And I mean that categorically.

They won’t want to travel to the property manager’s office to read minutes, may not have the grounding to analyze the minutes or other building documents correctly, likely won’t be able to evaluate the one- or two-inch stack of paper making up a co-op board application, and probably never heard of an Aztec recognition agreement.  (The agreement defines the rights of lender, co-operative and borrower in the event of foreclosure of a co-op.)

If you’re either borrower or seller and also a risk taker, go ahead and be penny wise.  But consider yourself warned that there is a strong likelihood you will be pound foolish if you hire an out-of-town attorney.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

Malcolm@ServiceYouCanTrust.com
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2 thoughts on “If your favorite attorney lives outside NYC, don’t even think about asking for help

  1. While it is sometimes easier to work with an attorney in a state, sometimes one should have two attorneys on a case as with a person with two residences in different states, as there may be some legal issues in one state that will affect personal issues such as taxes or estates as an example, which can be different from state to state. While one attorney is great, sometimes you need a consulting attorney from another state, keeping your family attorney to further advise. This is a case of more is sometimes better. Two lawyers instead of one…and the work is divided according to state issues for the client.

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  2. I respectfully disagree with the assertion and with some specifically stated allegations.

    Easiest to address is your opinion regarding the Aztec Agreement, which is not precisely what you stated and which is propounded by the lender’s counsel to secure the shares as collateral for the loan. Even if the buyer’s attorney had never seen an Aztec Agreement (named solely for its font, which is unusual and therefore distinct from “normal” fonts which was used to demonstrate its validity) this document is required to fund a loan.

    Further, contrary to the imaginations of many agents/brokers it is not the role of the attorney to read the minutes of prior board meetings or opine whether the shares of stock in this closely-hold corporation is a “good deal” or read the application. Nor are attorneys properly compensated for these tasks unless they are professionally capable as would be a CPA. Attorneys are not allowed to collect fees for services in which they are professionally incapable. I can not make intelligent comments on the balance sheet of a building corporation nor can I tune a piano. Therefore, I could not perform these tasks. Clients are unaware of these ethical constraints and follow the lead of their friendly agent who says “the attorney does all that”. Not true. Presumably, the buyer can read and if has the sufficient means to complete the purchase, can also determine if this is a saavy decision prior to retaining an attorney or immediately before signing a contract.

    There is no right of the parties to any relief if the opinion of their attorney (who is usually recommended by the agent and with whom no real relationship is shared with the client) is wrong and the unit does not appreciate or the super is really mean or if the board rejects almost all future applicants. The buyer’s attorney is not present during all other phases of the buyer’s life and should not be relied upon to perform these routine tasks such as filling out an application.

    I assert that the area in which the attorney practices is not dispositive to the ability to handle a transaction nor are the amounts of the fees collected to avoid being “penny-wise”. I firmly believe that the professional role of the attorney must be understood, which is specifically to ensure that all a client’s rights are protected and that all contractual counterpart’s obligations are met. Buyers buy. Sellers sell. Parties must assume their own roles in order to realize the “benefit of the bargain” that THEY entered into.

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