The Rental Market

Broker alters financial package, puts deposit at risk

By Teri Karush Rogers | August 1, 2011 - 7:07AM

Over on, a co-op buyer is shocked to discover that his broker--accidentally or on purpose--omitted a "large liability" from a revised financial package presented to the board.  Now the co-op board is asking questions--and so is the buyer.

Being turned down is the least of his or her concerns. Worse is the prospect that the seller could argue that the buyer submitted a fraudulent application and keep the deposit if the deal falls through.

The StreetEasy commenters find the situation grave, to say the least, and recommend that the buyer speak to an attorney immediately as well as the management of the brokerage firm.

So did a closing lawyer we checked with. 

"I've never heard of this happening, and I am appalled," said Manhattan attorney Rachel Mulcahy. "Consulting a lawyer and speaking to the brokerage management is the way to go."

Lessons for other buyers? 

"The bottom line is that it is the buyer's responsibility to check the application," says Mulcahy. "Many buyers abdicate responsibility to brokers and attorneys, and many of my clients never read the contract, even though I tell them to repeatedly.  Bottom line is it's the buyer's money AND they're signing legal docs.  They need to check everything they're signing or submitting."

Just in case something goes awry anyhow, make sure you have an electronic trail showing that you submitted all the necessary information and any mistakes happened on the other end.

"Send all items via PDF over e-mail (password protected, of course)," suggests a StreetEasy commenter. "Even if a form has to returned with a wet signature, send a PDF version via e-mail as well. And obviously read what you sign."


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