The Real.Est List
Scangate! Scanning scheme compromises co-op, condo minutes
New York City property management firms have reportedly uncovered a widespread scheme to surreptitiously scan complete sets of board minutes, potentially for profit-minded purposes.
According to the March issue of Habitat magazine, which hit mailboxes yesterday, a person or persons purportedly conducting due diligence on behalf of buyers has been using a portable scanner to make unauthorized scans of complete sets of minutes. Multiple property management companies have been targeted over the past eight months.
The article (not yet online) is vague about who, exactly, was doing the scanning (a real estate brokerage? a property management firm? law firm? writers for the forthcoming tv series, 666 Park Avenue? )--or why.
"One theory is that it could have been to create a library of minutes from a group of buildings," the magazine writes. "That way a company can advertise itself to prospective buyers as being the only company with the 'inside scoop.'"
At least one major property management firm now requires buyers' representatives to sign an agreement "essentially saying you can read [the minutes], you can take some notes, but you can't remove it--and you certainly can't copy it," according to Habitat.
Scangate has also apparently prompted the Real Estate Board of New York to discuss drafting an affidavit that must be signed before minutes can be reviewed.
"The affidavit essentially says that before anyone can see the board minutes, he or she must read and sign the document, identifying his/her firm, and stipulating the sole purpose for viewing the minutes is for due diligence, that the person will not use any recording, scanning or copying devices, and will not share the information with anyone other than those who need it for the prospective purchase," reports Habitat.