Category Archives: Condominiums

Purchaser of $19m Residential Condo Claims Non-Disclosure/Concealment of Doorman’s Hours

Court Determines If There Was Justifiable Reliance and Entitlement to Return of $1.9m Deposit

Kora Dille entered into a contract of sale to purchase a condominium unit for $19,000,000 from Zoelle LLC,  allegedly in reliance upon extra-contractual representations made by Zoelle that the building had a doorman. In fact, the building had a doorman physically present during the daytime hours of each day, and a virtual doorman for the remaining hours that a doorman was not physically present on site. Dille, alleging that a full-time doorman was material to her decision to enter into a contract to purchase the unit, refused to close the transaction, declaring the contract null and void and seeking a return of the $1,900,000 down payment on the basis that Zoelle had misrepresented the presence of a full-time doorman.

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Option to Buy Second Resi Condo in Purchase Agreement

Was “Right” Barred by New York  EPTL Rule Against Perpetuities?

In a declaratory judgment action, pursuant to Real Property Actions and Proceedings Law Article 15, Max Protetch sought to compel JOCAR Realty Co., Inc. to complete the sale of real property pursuant to an option provision of a purchase agreement. Realty moved to dismiss Protetch’s complaint, asserting that documentary evidence clearly established a defense as a matter of law; the claims were time-barred; and failure to state a cause of action.

On February 19, 1993,  Protetch and Realty entered into a purchase agreement for two residential condominium units, Unit 5SF and Unit 5SR, at 262 Mott Street, New York, NY. On June 4, 1993, the purchase agreement was modified because Unit 5SR  was occupied by a residential tenant (Richard Keene), pursuant to Article 7C of the Multiple Dwelling Law. Since Realty could not deliver the unit vacant, the purchase agreement was modified to state in relevant part:

Paragraph 26 of the Purchase Agreement states: This Purchase Agreement, together with the Plan, as the Plan may be amended from time to time, constitutes the entire agreement between the parties as to the subject matter hereof and supersedes all prior understandings and agreements.

Paragraph 7 of the Rider to the Purchase Agreement states: Upon the Closing, the Seller shall deliver the Units to the Purchaser vacant, free of all occupants or tenants, and the rights of any tenants or other persons in and to the Units.

Paragraph 8A of the Rider to the Purchase Agreement states: As Seller is unable to deliver vacant possession of Unit 5SR at the closing hereof, the Purchaser shall only purchase Unit 5SF and the purchase price hereunder shall be reduced to $153,123.15; the percentage interest in the common elements shall be reduced to .012429%; the amount of the purchase price to be financed shall be $141,500.00; and the Purchaser shall have the option to purchase Unit 5SR at the time the seller shall be able to deliver vacant possession thereof on all of the same terms and conditions as contained herein, except for the following terms and conditions:

a. The purchase price for Unit 5SR shall be $176,876.85; and

b. The amount of the purchase price to be financed shall be $141,500.00; and

c. The percentage interest in the common elements shall be .014357. [emphasis added]

On April 12, 2006, Realty purported to convey fee title to Unit 5SR to one of its principals, Joseph A. Chinnici. No consideration was paid for the conveyance. Upon his death, the unit was conveyed to  STATE5SR, also for no consideration.

During that time, Keene continued to live in the Unit but died in September 2021. On September 16, 2021, Protetch’s attorney notified Realty that Protetch elected to exercise the option and demanded STATE5SR, as the purported fee owner, to close the sale to Protetch pursuant to the terms of the purchase agreement. Realty refused and this lawsuit ensued.

Realty moved to dismiss Protetch’s complaint on the grounds that the purchase agreement option was barred by New York’s rule against perpetuities, pursuant to Estates, Powers and Trusts Law § 9-1.1 and was time barred by CPLR 213.

EPTL 9-1.1(a), commonly referred to as the rule against perpetuities, sets forth the suspension of alienation rule and deems void any estate in which the conveying instrument suspends the absolute power of alienation for longer than lives in being at the creation of the estate, plus 21 years. Under the statutory rule against remote vesting, an interest is invalid ‘unless it must vest, if at all, not later than twenty-one years after one or more lives in being. That is, an interest is void from the outset if it may vest too remotely.

There was no dispute as to the authenticity of the purchase agreement and Protetch and Realty stipulated that the purchase agreement with rider represented the complete agreement between the parties, the contract qualified as “documentary evidence” .

Under the terms of the purchase agreement, the option vested and must be exercised at the time Realty was able to deliver vacant possession of the unit. Protetch argued that, since the unit was occupied by Keene at the time the option was created and Keene was the apparent holder of the possessory interest to be extinguished in order for Realty to be able to obtain and convey vacant possession, it was indisputable that Keene was a ‘life in being’ for the purpose of applying EPTL 9-1.1 to the option. However, Protetch did not cite to any case law that allowed the Court to simply re-write the contractual terms of the purchase agreement to include Keene as a measuring life. And  the Court could not by construction add or excise terms, nor distort the meaning of those used and thereby ‘make a new contract for the parties under the guise of interpreting the writing’. An option such as the one here, containing no limitation in duration, demonstrated the parties’ intent that it last indefinitely,. And EPTL 9-1.3, the “saving statute”, did not permit an extensive rewriting of the option agreement so as to make it conform to the permissible period.

Where an option agreement contains no limitation on duration nor words suggesting that the parties intended the extent of its life to be anything other than indefinite, the agreement violates the rule against remoteness in vesting. Without a measuring life or any temporal limitation, the option violated the New York state rule against perpetuities. EPTL 9-1.3 (d) provides that where vesting requires “any specified contingency, it shall be presumed that the creator of such estate intended such contingency to occur, if at all, within twenty-one years from the effective date of the instrument creating such estate.” Here, the option was contingent on the vacancy of the unit, an event that was not certain to occur within 21 years of the purchase agreement. And, in fact, vacancy of the unit did not occur within the statutory period of the rule against perpetuities. As such, no option existed or was available to Protetch. raised by defendants.

 Realty’s motion to dismiss Protetch’s complaint was granted.

Damaged Alleged from Water Raining Down from Penthouse Fireplace

This was originally published on the SGR Blog.

Did Condo Unit Owner Have Claim Against Board/Managing Agent?

William Etkin, the owner of a unit at the 500 West 21st Street Condominium, alleged that, beginning in late 2015, not long after purchasing his condominium unit, he noticed a significant smoke condition in his unit and on his floor, which was allegedly emanating from the fireplace in a penthouse unit of the building. Etkin also alleged that, since March 2021, concrete mortar and water had been raining down from the terrace above his unit, causing damage to his terrace. Etkin alleged that he repeatedly notified the Board and Sherwood Residential Management, LLC, the Condo’s Managing Agent, of those issues and that they refused or failed to address them.

Etkin claimed that those matters were the Board’s responsibility under the Condominium By-Laws and Sherwood’s responsibility under the Management Agreement. Etkin further alleged financial improprieties by the Board and Sherwood, who allegedly permitted various expenses to be borne by condo unit owners when they were the responsibility of other parties. The Board and Sherwood moved to dismiss Etkin’s complaint.

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Residential Condo Unit Owner Claims Excessive Noise/Odors from Neighbor’s Tenant

This was originally published on the SGR Blog.

Were Allegations of Complaint Sufficient to State Claim for Nuisance?

In an action seeking permanent injunctive relief upon claims for breach of contract, nuisance, and trespass, Sabrina Santoro and Antonio Micalizzi, owners of a Manhattan condominium unit, alleged that the tenants of a neighboring unit owned by Luigi Rosabianca, had caused excessive noise and odors to emanate from his unit. The board of managers of Cipriani Club Residences at 55 Wall Condominium and First Service Realty, Inc., the building manager, had not sufficiently addressed their complaints.

The board and building manager answered the complaint. Santoro/Micalizzi moved for leave to enter a default judgment against Rosabianca and John Does 1-10, the fictitious name afforded his tenants.

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Condo Unit Owner Defaults On Payment of Common Charges:

This was originally posted on the SGR Blog.

Was Board Entitled to Appointment of a Receiver?

A lien may be placed on a condominium unit if the owner fails to pay common charges. And, as a recent case illustrates, the Board may be entitled to the appointment of a receiver in an action to foreclose the lien.

The Board of Managers of the Residences at Worldwide Plaza Condominium filed an action to foreclose on a lien for unpaid common charges on residential condominium unit 2Y at 393 West 49th Street, owned by Lourdes Villegas.

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Subdivision Declaration Prohibited Daily/ Weekly/ Monthly Sublets: Court Decides if One Year Rental was Covered or Permitted

This was originally posted on the SGR blog.

Reported decisions abound relating to the violation/enforcement of the prohibition of short-term rentals of coop and condo units. But are those restrictions enforceable where contained in the declaration of a residential subdivision in which each singular property was separately and privately owned?

LG Lakeside Limited Liability Company, owned by Glenn and Laura Kupsch, completed the construction of a home at 6 Mayfair Drive in Bolton Landing, Warren County in early 2018/late 2019. The home is located in the Mayfair Resort subdivision on the shores of Lake George, with all homes in the subdivision subject to a Declaration of Covenants, Restrictions, Easements, and Assessments dated May 15, 2012, and amended on November 13, 2013.

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Condo Unit Owner Inconvenienced by Defective Exhaust Fan: Was the Board Entitled to Foreclose the Common Charge Lien?

This was originally posted on the SGR Blog.

Condo unit owners often feel aggrieved by every day “housekeeping” type problems—and withhold payment of their common charges until the matter is resolved. But the Board may file a common charge lien as a result of the non-payment. Was the “inconvenience” of a broken exhaust fan sufficient to stop foreclosure of the lien?

Bristol Plaza is a 50-story “white glove” condominium at 200/210 East 65th Street. Angus McCallum is the fee owner of apartment 21K in the 308-unit building.

The Board sued McCallum to foreclose on a $10,202.72 lien for unpaid make common charges, assessments and other charges assessed against the apartment. The Board moved for summary judgment alleging that no material issues of fact existed as to whether the Board was entitled to foreclose on the lien.

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Family Cash Pooled to Build $23M Mixed-Use Condominium in Flushing: Court Determines Interests of Parties in Absence of Definitive Paperwork

This was originally posted on the SGR Blog.

New York real property development disputes often require the Court to navigate hundreds of pages of lengthy and dense contracts, agreements, or understandings that are the source of contention despite having been drafted by experienced attorneys and signed by sophisticated investors. But, as a recent case illustrates, matters become even more contentious where family members informally invest large sums of money with little concomitant paperwork.

Chun You Cheng (“Cheng”) and Chiu Ming Yan Cheng (“Chiu-Ming”) brought a derivative action against family members and other entities (“defendants”) seeking a judgment declaring the ownership interests of the investors (or their successors or assigns) in Garden View LTD (“GVL”). The Court held a 10-day “bench” (non-jury) trial over several months.

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Declaration/By-Laws Meet Arbitrary/Unreasonable at Madison Ave Condo:

This was originally posted on the SGR Blog.

Did Prior Practice Trump Governing Language in Facade Signage Dispute?

New York City abounds in mixed-use condominiums where the rights and obligations of the commercial and residential unit owners are often meticulously defined in the declaration and by-laws. But disputes nevertheless often arise where those living in the building take issue with conduct of those doing business there. And, as a recent case illustrates, the scrupulous detail of the governing documents may not be dispositive where a prior course of conduct arguably suggests otherwise.

The Board of Managers of the 80th at Madison Condominium sued 1055 Madison Avenue Owners LLC for violating the condominium’s Declaration and By-Laws by affixing signage to the granite exterior facade of the building located at 45 East 80th Street without their approval. The Board sought to compel Owners to remove the signage.

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Would UWS Hi-Rise Developer be Forced to Demolish Top Floors?: First Department Tackles Complicated/Ambiguous Zoning Rules

This was originally published on the SGR Blog.

Questions presented: Was it proper for Supreme Court to annul the determination by the Board of Standards and Appeals to approve a new 55-story condominium building at 200 Amsterdam Avenue on the Upper West Side of Manhattan? For Supreme Court to direct the demolition of an unspecified number of floors from the building? And were legal proceeding moot because the building was substantially completed and the Committee of Environmentally Sound Development and the Municipal Art Society of New York failed to exercise continued due diligence to halt the project by not seeking injunctive relief at every stage of the protracted litigation?

The building lot was originally part of a single parcel of land, which in the 1960s consisted of five buildings along West End Avenue. In 1987, the DOB approved a subdivision into two separate parcels that included partial tax lots and, subsequently, two mergers with four other tax lots. In 2015, the DOB approved another zoning lot subdivision, creating two new zoning lots, both of which contained partial tax lots, and filed a declaration with the City Register. The pertinent subdivided zoning lot included the improved land at 200 West End Avenue, the unimproved land at 200 Amsterdam Avenue, and portions of four other tax lots.

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