New, But Far From Perfect

Cautionary tale from the New York Times about buying new construction, New, but Far From Perfect:

It took just three years for balconies to crack and concrete to flake from the facade of one Brooklyn condominium. Another building was prone to flooding, because the storm drainage system was never connected to the sewage system. With buildings rising at a pace not seen in years, some fear that shoddy construction could be making a comeback, too.

Both the condos I bought at the height of the boom in 2007 had issues. One’s were resolved reasonably amicably with a modest settlement between the home owners association and the developer. The other got closer to litigation before a six figure settlement; a settlement that seven years later still hasn’t been spent to fix the issues.

If you’re buying at the new round of condos like Solo Lofts, Salt, Vik, Insignia or Luma you need to understand that even though it comes with a warranty it will come with a few headaches too.

Both my buildings had countless elevator issues. Turns out in the smaller buildings developers just don’t have a lot of options to choose from and the one or two options are pretty shitty and have a long break in period. Both my buildings had HOAs that spent a lot of time hiring inspectors to check the work of the developers then hired lawyers to negotiated settlements. If you’re joining the board of a new building beware that the time commitment is likely larger than joining a slightly older building.

New is great and all, but so is buying in a building just past its warranty period where someone else had to deal with all the bullshit.

And lest we forget, buildings from the last boom like 2200 had a $26 million lawsuit that required the buildings wrapped or Mosler Lofts that settled for $8.5 million.