The Real.Est List
Inside Story: Our new construction nightmare
My wife and I had been renting for 10 years when, literally the day after we got back from our honeymoon a little over a year ago, we saw the one-bedroom condo we own now. It was the model apartment in a new, four-story Williamsburg building with less than a dozen units and no elevator or doorman.
The apartment had 15-foot ceilings, a mezzanine level, and a backyard patio. Priced in the mid $400,000's including the second bathroom that we asked the contractor to put in upstairs, it was a lot cheaper than other condos we saw of that size, which were in the $600k+ range, though some had more amenities. The building sold out in 6 or 8 weeks at a time when nothing was really selling.
We went into contract in October of 2009 and our closing was scheduled for the end of January 2010.
Part 1: In which the sponsor plays as dumb as our lawyer
There were some issues we saw with the unit.
For instance, not everything matched up to the offering plan as far as the sponsor’s responsibility to replace things that were promised with substitutions of equal or greater value. That was a blatant lie. The offering plan called for a Jacuzzi tub and it was just a tub. The garbage disposal wasn’t there. The kitchen had weird half-assed cabinetry that didn’t really hold anyting or hold together. The fridge was clearly not the correct size for the space—there was a gap between it and the wall--and it protrudes into the kitchen, so you can't actually get past the dishwasher when it's open.
We were constantly told by the sponsor's broker "oh, that's something we'll be able to check off on a punch-list right before closing". When we came to do these walk-throughs a few days before closing, no punch-list ever appeared, and people on the sponsor's side played dumb as to why we'd ever thought there would be one.
So we made a giant list of things we saw wrong and told the sponsor about them during a walkthrough a few days before closing. The day of closing, we went through the unit again, checking off the issues he had fixed (maybe about a third of them) and brought the list to the closing.
At the closing, the sponsor refused to even acknowledge the list, demanding that we bring it down to four or five items and that he wouldn't consider fixing the rest. We brought it down to the ones which were clearly pretty egregious (unfinished backyard, missing shelves in bathroom closets), and fixed the other ones ourselves, or just ignored them.
Our lawyer, who was referred by our broker, didn’t stick up for us for much of anything. He said what you see is what you get. It seemed like he just wanted to get it over and done with without having to really argue about anything. The broker also paid part of the lawyer's fee, which we didn't know was going to happen until after closing when we saw all the checks.
Part 2: Shattered windows, and water, water everywhere
The real trouble started after we closed.
Within a few months, four of our floor-to-ceiling windows shattered across the inside pane after we leaned pillows against them. They’re under a 7 year warranty but the sponsor said it was our fault—that we must have been playing football inside.
Other people who have come in to do waterproofing—more on that in a minute—told us the windows were installed poorly. All the metal pieces were supposed to fit into one another and there are these little rubber gaskets you put in and everything snaps together and it’s done. But in our windows they just caulked over to make it look like it’s sticking together.
We were the first ones to move into the building, and once almost everyone moved in, the first big rainstorm came through. We discovered that pretty much the entire back façade of the building was not waterproofed at all. We’re on the 2nd floor and we got the least water of anybody in our apartment—a little bit dripping in from the corners of the ceiling. But the third and fourth floors had sheets of water pouring in the windows and a huge lake on their floors.
We made the sponsor hire a water proofing company—we said it’s raining in our apartments, you’ve got to fix that. The whole back wall was ripped off and it turned out it was just like chicken wire and stucco.
They replaced it with a few more layers of things that are waterproofing and caulked around the outside of the windows, which had never been done either. He also had to redo the roof, but he did it in a way that won’t really last or work. For example, the flashing on the parapet edge of the roof is just sheets of rubber melted down rather than the metal flashing that the waterproofers told us was necessary to waterproof that part of the roof in the longer term.
Even after the waterproofing of the back of the building was done, water came in through people’s window systems and around the little deck that each unit has. The water proofing company hasn’t finished that. Lots of stalling here by the sponsor and the waterproofing company, combined with issues around the waterproofers' workers damaging interiors of units, made it impossible to schedule the finishing of the work before it got too cold to continue it.
There are major problems in the front too with leaks. The unit on the 4th floor had water coming in through the roof, and the windows in the bathroom there were not installed correctly. There’s rotting drywall around it now and a mold issue.
But the first floor apartment – which occupies some of the first floor but 85% is in the basement—is the worst off in the building. It’s constantly flooded and moldy because it turns the sponsor never waterproofed the foundation of the building. So anytime there is any rain at all it pours through the walls of their apartment. They haven’t been able to move in.
Engineers have told us that eventually the foundation will start to corrode, because it wasn’t waterproofed, and the building could fall down.
Part 3: The fog of war
It has been stressful. I’m the president of the board. I spend about two or three hours a week tracking people down or try to calm down some of the inside building fighting. I really didn’t want to know any of the stuff I now know about.
The sponsor tries to get out of doing anything he can. He pretends to be knowledgeable about all sorts of construction issues and gives what is the cheapest possible solution, which usually involves breaking something else. We’ve learned pretty quickly not to trust him and demand that an actual expert come in.
Oh, and we don’t have the "as built" plans for the building that show where the heating pipes and electricity is. Apparently the city doesn’t have them either. The sponsor says they’re lost. We think he destroyed them because they don’t match what was actually installed.
We’ve considered suing the sponsor but no one has the money. All but one of us are first time buyers and put all our money into our apartments. We don’t feel like we have the money to take on a multiyear lawsuit.
Part 4: If we had to do it over again....
What would we have done differently? Paid for an inspector to come and inspect the building before we bought it. The things we were looking at seemed just fine—we couldn’t see the real issues because they hadn’t happened yet. We didn’t know what to look for as far as what should the roof look like. And things like not waterproofing the foundation, no one would have expected.
Also, we didn’t look into the sponsor’s background. I still wouldn’t even know how to do that. Part of the reason we didn’t think of it was because we had a lot of assurance about the building from a friend of a friend who was a broker, who knew someone involved in the project, and who I think is legitimately shocked at how things turned out. This person’s agency had sold and rented units in another building of the sponsor’s and the other building has been fine.
And besides never trusting anything a broker says, I would advise other people shopping for new condos to watch out for really low prices. Ours is a great apartment on the inside—if it felt dry and we didn’t feel like we were going to have issues with water we would be much happier. The quality of the building is the issue. We do have some concern about selling the apartment, which we will probably try to do in a couple of more years.
Would I buy new construction again? Oh God no. I’d probably buy in the 4-5 year old range with a full inspection of the building. I would also get a better lawyer.
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