Another risk to buying a co-op in NYC is that the managing agent for the building is corrupt, incompetent, non-responsive or simply lazy.
The managing agent is corrupt and accepts kickbacks
The scariest situation of all is a rogue managing agent that pushes overpriced contracts for work on the building so that they can secretly pocket a kickback or other illegal referral fee.
Given that managing agents routinely work with contractors on presumably multiple buildings, it’s no surprise that contractors will try to befriend managing agents anyway. However, it’s one thing to try to wine and dine a managing agent, but it’s one step further to essentially bribe managing agents to choose them with illegal, often all cash, kickbacks.
A corrupt managing agent may not bother to solicit multiple competitive quotes for a big job in the building, or may even pretend to have solicited quotes, only to select a very expensive option where they are getting a secret kickback.
The managing agent is utterly inept
A major risk to buying a coop in NYC is the fact that you’ll be buying into a building with a managing agent that you did not choose.
This managing agent could be utterly incompetent, and could have been a legacy choice from years ago, perhaps due to nepotism or some sort of kickback arrangement from a former corrupt board member.
The managing agent doesn’t respond to you
A super infuriating risk you might face is a managing agent who simply doesn’t respond to you, even if you’re on the board.
We’ve seen too many situations where a managing agent decides to only respond to the board president or some other board member, and literally ignore questions and emails from every other board member, let alone a mere shareholder.