Page 10 - CooperatorNews NJ Expo 2022

8 COOPERATORNEWS NEW JERSEY —EXPO 2022 NJ.COOPERATORNEWS.COM NJ.CooperatorNews.comFrom NJ.COOPERATORNEWS.COM Unsolicited Offers So Your Apartment Isn’t for Sale...So What? BY A J SIDRANSKY Night falls on the city; just as she’s about to close up shop for the day, a broker receives an email from an unknown sender. The sender is interested in purchasing a might become willing sellers if the price is right. Contacting unit owners in apartment specific unit in a specific building—so interested, in fact, that they make an offer for buildings is trickier than single-family homeowners, which is why the aggressive buyer immediate, all-cash purchase right in the email. But the broker’s company database in our story above contacted the broker. does not have a listing for that unit. Perplexed, she searches listings offered by other companies; nothing. She replies to the sender of the email. Thanks for contacting me, just make a sale and walk away,” she says. “It’s not a one-off—we have an ongoing rela- she says, but that unit isn’t currently for sale. With all due respect, she asks, why did tionship with the buyer, who often becomes a seller eventually.” That’s what’s known in you send this offer to me? The sender replies that they saw a listing for the unit as a the brokerage world as a ‘book of business.’ “\[When I have\] that relationship with the rental some time ago, with the broker named as the listing agent. “But I’m not interest- ed in renting,” the sender continues. “I want to buy, and that’s the unit I want. I thought the market, I can go through past listings and see what didn’t sell, didn’t trade, didn’t you might be able to make it happen.” This is a slightly simplified version of real events, but it happened—and it’s happen- ing more and more frequently. It’s what’s known as an unsolicited offer. What is an Unsolicited Offer? Simply put, “An unsolicited offer is an offer that comes to a broker or an owner di- rectly from an interested buyer for a property that isn’t currently on the market,” says knowledgeable. They know what they want in terms of location, building type and Cynthia Keskinkaya, an associate broker with Douglas Elliman, a real estate brokerage style, apartment layout, and amenities. By the time they contact a broker, they may firm in New York City. She says she’s seeing an increasing number of such offers, and have narrowed their search down to a few select buildings—even specific units. believes they are the result of the current severe shortage of inventory for sale. Until recently, the unsolicited offer phenomenon was more common outside the “That layout may not be available in the specific building they are interested in, but it city than in it. Suburban homeowners have gotten ‘We-buy-for cash’ letters in the mail may exist in another, similar building. I will contact the owners of the unit directly and for years. A quick look at telephone listings and tax rolls gives investors easy access to ask if they are interested in selling. I also research the sales history of the building and names, addresses, and contact information. It’s classic direct-mail marketing, and even contact agents who’ve sold units there previously to tap into their relationships with with only 1% of direct mail recipients responding, the method can produce opportuni- ties. The direct-mail approach isn’t as useful in locating co-op or condo owners who But, explains Keskinkaya, this isn’t how most brokers conduct business. “We don’t buyer-turned-owner, when I’m looking for a type of property that’s not currently on get rented, or was taken off the market. I’ll contact those owners to see if they might consider a sale—and of course I contact previous buyers \[who are\] current owners and ask if they’re interested in selling.” Why That Unit? Keskinkaya goes on to say that buyers in today’s market are sophisticated and “Sometimes they want a specific layout that really works for them,” says Keskinkaya. continued on page 24 Russian Sanctions, New York Real Estate How the War in Ukraine May Be Felt in the City’s Luxury Buildings BY A.J. SIDRANSKY The continuing war in Ukraine and the accompanying sanctions imposed by the US, EU, garchs or their family members\] are placed on a list of prohibited individuals, such as that and their allies reach into our own backyard. Many Russian oligarchs own luxury apartments maintained by the Office of Foreign Assets Control of the US Department of the Treasury, and other real estate in New York and elsewhere in the United States. What is the practical which administers and enforces economic and trade sanctions against targeted foreign coun- reality of those sanctions for co-op and condominium communities? Seizures & Sales Can the government confiscate someone’s real estate because of their connection to or security, foreign policy or economy of the United States.” involvement with a sanctioned foreign power? “The short answer is, ultimately, yes,” says Mark Hakim, an attorney with Schwartz Sladkus Reich Greenberg & Atlas, a law firm based “and would, in either event, perform diligence and reach out to relevant parties, title com- in Manhattan. “However, the process of seizing and taking a property is quite involved—it’s panies and the agency which froze the asset, to better understand the nature of the freeze not as easy as, say, freezing an asset or filing a lien for unpaid taxes. Seizing an apartment is and ascertain whether it affects the subject property. Obviously, regardless of whether it is further complicated by the various corporate structures, LLCs, and levels of ownership—but a cooperative corporation or condominium, to the extent a board has any control over the presuming the government works its way through the corporate structure and ultimately transfer, we would counsel the board to err on the side of caution and perform diligence to seizes an apartment, we advise our boards to comply with the seizure orders.” William McCracken, a partner with Ganfer Shore Leeds Zauderer, also based in New York, adds, “I know that in the UK, there has been a great deal of discussion and activity around seizing property held by Russian oligarchs in London. Nothing like that has happened in New York City for any or no legal reason, condominium boards may have a hard time preventing York—at least, not yet. There have been sanctions issued by OFAC at the Federal level target- ing a select group of Kremlin insiders, and so any transactions in the United States involving their powers in their very own bylaws. Most condominium boards can only issue a waiver of those individuals are now prohibited. That would of course include their buying or selling a right of first refusal, allowing the purchase to proceed. Their other option is to purchase the condo units. But in the context of the New York City real estate market, you’re talking about apartment on the terms in the contract - which most cannot afford to do. a vanishingly small number of deals that might be affected, most of which are done through anonymous LLCs which make it difficult if not impossible to trace the actual individuals continue to emerge, the ripples from across the Atlantic may even be felt here, in some of the involved.” Hakim adds that, “To the extent their assets are frozen, for example, or one or more \[oli- tries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national “We also see instances where the government may ‘freeze’ an asset,” Hakim continues, make certain the actions permitted or taken do not violate any such freeze.” Co-op vs. Condo While generally, cooperative boards can, with few exceptions, reject any applicant in New a purchaser on any OFAC list or who has had his or her assets frozen due to the limitations of As the situation in Ukraine continues to develop, and its consequences and ramifications wealthiest and most exclusive building communities. n