The New York State Legislature passed a law this summer requiring city landlords to disclose any history of bedbug infestation before leasing an apartment. Real estate lawyers and brokers say that even though the law was intended to address rentals, bedbug disclosure has become an issue in the sales market as well.

The law requires landlords to give renters written notice before a lease is signed indicating whether the apartment being considered, or any other apartment in the building, has been infested within the last year. Anyone renting out an apartment in a co-op or condo would also have to comply with the law.

There has been confusion in the real estate industry over the scope of the law, but Nancy Peters, a spokeswoman for the state’s Division of Housing and Community Renewal, said last week that co-ops must also follow the law when there is a sale, because new buyers enter into a proprietary lease.

The division has issued a form (http://www.dhcr.state.ny.us/Forms/Rent/dbbn.pdf) with a checklist that clearly states whether there has been any bedbug infestation in the apartment or in the building within the last year, and also whether any “eradication measures” have been taken. There is no penalty for not complying, although renters who do not receive a disclosure form can file a complaint requiring disclosure.

In recent weeks, some lawyers representing co-op and condo buyers had already made bedbug disclosure a part of contract negotiation.

In early September, about a week after the law went into effect, Daniel Farris, a senior vice president of Brown Harris Stevens, said he came across a bedbug rider while reviewing a client’s proposed contract to buy a two-bedroom co-op on the Upper West Side.

The rider, which was proposed by the buyer’s lawyer, read, “The seller has no knowledge of the existence or presence of bedbugs in the unit either currently or in the past.” The seller signed the rider, and Mr. Farris’s buyer is now in contract for the apartment. Mr. Farris said he routinely counseled buyers to ask whether a unit has had a history of leaks or other problems and to have the building checked for rodents. He said he thought the rider made perfect sense, “for your own level of comfort; a buyer should know what they’re getting into.”

Similarly, in a recent condo sale on the Upper West Side, Louise Phillips Forbes, an executive vice president of Halstead Property, represented a seller and said she spent about six days hunting down bedbug history, or the lack thereof, to help seal the deal. The buyer asked about bedbugs and was not satisfied just knowing that the seller knew of no bedbugs in the building.

The building had recently switched managing agents, so Ms. Forbes had to get statements from both agents, and she also checked with three members of the condo board, none of whom knew of any bedbug problems.

Assemblywoman Linda B. Rosenthal, a Democrat from the Upper West Side who sponsored the legislation, said that it had been written to address rentals in New York City, but that she planned to introduce a separate disclosure law for co-ops and condos next year. “I think it’s great if people are voluntarily disclosing the information already,” she said. “Since this is such an urban epidemic, the more transparency the better.”

Bedbug disclosure has been a major topic of discussion in the real estate industry in recent weeks.

“We’ve been fielding a lot of calls from our members, which is normal whenever a new law comes into effect,” said Angela Sung, the senior vice president for management services and government affairs of the Real Estate Board of New York, which represents 12,000 building owners, managers, builders, brokers and lawyers.

Ben Kirschenbaum, the general counsel for Cooper Square Realty, which manages about 400 buildings in New York City, said, “I’ve been in this business for a long time, and I can’t recall a less well-drafted statute.”

Property managers and landlords said that because the disclosure form used the term “vacancy lease,” which tends to apply only when discussing rent-regulated apartments, it suggested that market-rate rentals and apartment sales in co-ops or condos might not be included.

They also said compliance would be difficult because the disclosure form requires owners or managing agents to state definitively whether there has been any bedbug infestation in any apartment in the building. “What the form should say is that the owner or managing agent is providing information that is to the best of their belief,” Mr. Kirschenbaum said. While managing agents of rental buildings might have a thorough bedbug history for a building, he said, “managing agents won’t necessarily know about an apartment in a co-op or condo, because owners don’t have to report bedbugs, and they might get treatment themselves.”

View the original article here

The New York State Legislature passed a law this summer requiring city landlords to disclose any history of bedbug infestation before leasing an apartment. Real estate lawyers and brokers say that even though the law was intended to address rentals, bedbug disclosure has become an issue in the sales market as well.

The law requires landlords to give renters written notice before a lease is signed indicating whether the apartment being considered, or any other apartment in the building, has been infested within the last year. Anyone renting out an apartment in a co-op or condo would also have to comply with the law.

There has been confusion in the real estate industry over the scope of the law, but Nancy Peters, a spokeswoman for the state’s Division of Housing and Community Renewal, said last week that co-ops must also follow the law when there is a sale, because new buyers enter into a proprietary lease.

The division has issued a form (http://www.dhcr.state.ny.us/Forms/Rent/dbbn.pdf) with a checklist that clearly states whether there has been any bedbug infestation in the apartment or in the building within the last year, and also whether any “eradication measures” have been taken. There is no penalty for not complying, although renters who do not receive a disclosure form can file a complaint requiring disclosure.

In recent weeks, some lawyers representing co-op and condo buyers had already made bedbug disclosure a part of contract negotiation.

In early September, about a week after the law went into effect, Daniel Farris, a senior vice president of Brown Harris Stevens, said he came across a bedbug rider while reviewing a client’s proposed contract to buy a two-bedroom co-op on the Upper West Side.

The rider, which was proposed by the buyer’s lawyer, read, “The seller has no knowledge of the existence or presence of bedbugs in the unit either currently or in the past.” The seller signed the rider, and Mr. Farris’s buyer is now in contract for the apartment. Mr. Farris said he routinely counseled buyers to ask whether a unit has had a history of leaks or other problems and to have the building checked for rodents. He said he thought the rider made perfect sense, “for your own level of comfort; a buyer should know what they’re getting into.”

Similarly, in a recent condo sale on the Upper West Side, Louise Phillips Forbes, an executive vice president of Halstead Property, represented a seller and said she spent about six days hunting down bedbug history, or the lack thereof, to help seal the deal. The buyer asked about bedbugs and was not satisfied just knowing that the seller knew of no bedbugs in the building.

The building had recently switched managing agents, so Ms. Forbes had to get statements from both agents, and she also checked with three members of the condo board, none of whom knew of any bedbug problems.

Assemblywoman Linda B. Rosenthal, a Democrat from the Upper West Side who sponsored the legislation, said that it had been written to address rentals in New York City, but that she planned to introduce a separate disclosure law for co-ops and condos next year. “I think it’s great if people are voluntarily disclosing the information already,” she said. “Since this is such an urban epidemic, the more transparency the better.”

Bedbug disclosure has been a major topic of discussion in the real estate industry in recent weeks.

“We’ve been fielding a lot of calls from our members, which is normal whenever a new law comes into effect,” said Angela Sung, the senior vice president for management services and government affairs of the Real Estate Board of New York, which represents 12,000 building owners, managers, builders, brokers and lawyers.

Ben Kirschenbaum, the general counsel for Cooper Square Realty, which manages about 400 buildings in New York City, said, “I’ve been in this business for a long time, and I can’t recall a less well-drafted statute.”

Property managers and landlords said that because the disclosure form used the term “vacancy lease,” which tends to apply only when discussing rent-regulated apartments, it suggested that market-rate rentals and apartment sales in co-ops or condos might not be included.

They also said compliance would be difficult because the disclosure form requires owners or managing agents to state definitively whether there has been any bedbug infestation in any apartment in the building. “What the form should say is that the owner or managing agent is providing information that is to the best of their belief,” Mr. Kirschenbaum said. While managing agents of rental buildings might have a thorough bedbug history for a building, he said, “managing agents won’t necessarily know about an apartment in a co-op or condo, because owners don’t have to report bedbugs, and they might get treatment themselves.”

View the original article here