Category Archives: Vendor/Purchaser Disputes

“On or About” Closing Date Meets “Right of First Refusal” on Kingston Avenue

This was originally posted on the SGR Blog.

Were Brooklyn Property Purchase Rights Abrogated by Passage of Time?

A real estate contract vendee had the right to purchase a parcel in Brooklyn. But that right was subject to a third-party’s right of first refusal to buy the lot. As a recent case illustrates, the Court was required to navigate those concurrent provisions after several years of failure to close on the contract, on the one hand, or exercise of the right of first refusal, on the other.

On January 17, 2017, Parkway Trading Group Corp. commenced an action for specific performance against Yehuda Blesofsky, alleging that, on or about February 20, 2008, Blesofsky, as seller, and Parkway, as purchaser, entered into a contract for the purchase of  328 Kingston Avenue in Brooklyn for $640,000.00 with a closing date of on or about August 15, 2008.

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Does “Active Concealment” Trump “Caveat Emptor”?

This was originally published on the SGR Blog.

Did Seller Hide Defect in House from Buyer/Inspector?

It is a customary practice for a homebuyer to personally—or through a professional—inspect the residence either before a contract is signed or the transfer of title takes place. And New York is a “real property (caveat emptor) buyer beware” jurisdiction when it comes to such inspections. But what is a Court to do when the buyer discovers defects after the sale closed and claims that the conditions were deliberately concealed by the seller?

In a small claims action, Alexandra Daquila-Imbruglia sought to recover $10,000 from Universal Building Solutions Corp., its principal, Christopher Reno, and Our Island Real Estate, Inc., based on the alleged concealment of a defect in a house that she and her husband purchased.

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Real Property Buyer Never Declared Seller in Default:

This was originally posted on the SGR Blog.

Can Purchaser Nevertheless Recover Down Payment?

Contracts for the sale of real property as often as not initially provide for an “on or about” closing date–with time not being of the essence. But what happens when the closing date passes and the buyer subsequently contends that the seller could not deliver clean title as required by the contract? May the buyer recover his deposit without first setting a time of the essence closing date before which the seller can clear the title defect?

In November 2006, Fermin Xelo entered into a contract to purchase residential real property from Ena M. Hamilton for $854,900.  Under the contract, Xelo paid a down payment of $15,000, deposited in the escrow account of Hamilton’s attorney, Michael Singer. The contract provided that the closing was to occur on or about 60 days after the execution of the contract.

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Did De Minimus Plantings Lead to Adverse Possession?

This was originally posted to the SGR Blog.

“Mox Nix” If Old or New Law Controlled.

Both owners of contiguous real property have the right to landscape their side of the boundary. But, as a recent case illustrates, a Court may have to decide if, as and when such plantings and maintenance on or across the line rose to the level of adverse possession.

E. 12th St. Holding LLC sued Mousa Lati, the owner of an adjoining property, for adverse possession, trespass, and damages.

Holding’s predecessors (Bettina and Nathan Avidan) bought the property in 1995 as husband and wife; built a new house which was completed in 1998; and transferred title to an LLC in 2015 of which the Avidans are the managing members.

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Was Offer to Sell Mortgaged Residence at Auction Timely Revoked?

This was originally posted on the SGR Blog.

What Was Remedy If Mortgage Balances Exceeded Winning Bid?

It is not unusual in a hot suburban residential real estate market for an offering to morph into a “bidding war”- a de facto auction. And, on occasion, an auction is the sales method of choice from the start. But, as a recent case illustrates, a real estate auction sale may raise some unique factual disputes and concomitant legal issues.

Theodore Brois and Helene Brois authorized Concierge Auction, LLC, to conduct an auction of their property located at 3 Tallwoods Road in Armonk, New York, by an agreement dated May 21, 2018. The Auction Marketing Agreement provided that the auction “shall be conducted without reserve” and that the Brois, as sellers, “shall be obligated to sell the [property] to the highest bidder.” That agreement included a provision giving the Brois the right to cancel the auction, by written notice of cancellation and certain payments, which right expired at 12:00 p.m. on the day of the auction. The Broises pre-executed a contract of sale for the property on June 26, 2018. They also signed a document entitled an Auction Sale Acknowledgment on June 26, 2018, acknowledging that the highest opening bid was $1,500,000.

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Town Voided Certificate of Occupancy Before Closing: Was Non-Disclosure Excused by “Caveat Emptor”?

This was originally posted on the SGR Blog.

Caveat emptor”—or “buyer beware”—historically was rule number one of real property purchase and sales. But did the rule still control as to the duty to discover or disclose that a certificate of occupancy had been voided?

David Chapman sought damages for, fraud arising from his purchase of a home from Adam and Jennifer Jacobs. Chapman alleged that the Jacobs represented that there was a certificate of occupancy for a pole barn situated on the property when, in fact, the Town of Farmington voided the certificate of occupancy when it discovered that the barn encroached on the adjoining property.

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Gov’t Approval Meets Condition Precedent in Rockland County: Did Seller Have Right to Cancel Real Estate Contract of Sale?

This was originally posted on the SGR Blog.

Real property purchase and sale contracts often have so-called “conditions precedent” to closing– events that must occur before a party is obligated to close. But, as a recent case illustrates, disputes often arise about which party is the beneficiary of the condition and the concomitant right to cancel.

B & A Realty Management, LLC and John Gloria entered into a purchase and sale agreement. Gloria agreed to sell an undeveloped parcel of property in Suffern to B & A Realty for $1 million. The agreement was contingent upon B & A Realty, as the purchaser, obtaining all governmental approvals for the development of the parcel within 24 months from the end of a 90-day due diligence period. The date by which B & A Realty was to obtain the approvals was referred to as the approval date. And the agreement contained a provision allowing B & A Realty to extend the approval date by three months on two occasions. The closing was to occur 30 days after the approval date.

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Was There Asbestos in A/C Ducts of Resi Condo? Court Adjudicates Buyer’s Right to Intrusive Testing

This was originally posted on the SGR Blog.

Contracts for the sale of residential property often contain both generic and specific provisions with respect to the purchaser’s right to inspect the premises between the time the contract is signed and the actual closing and transfer of title. But, as a recent case illustrates, the scope of that inspection right may nevertheless be the basis of a dispute.

Oren Mor and Hadar Laor (for convenience, the “Mors”) owned a residential condominium unit 3C at 15 Hubert Street in Manhattan. Jessica Fisher signed a contract to buy the unit for $3,875,000, with a $387,500 deposit. She contemplated making extensive alterations to meet her specific requirements. Fisher suffered from various medical ailments, including allergy-induced asthma, which required her to investigate an apartment’s HVAC units and soundproofing. And alleged that she was promised unfettered access to the apartment prior to the closing so that she could perform various inspections. Despite purported oral representations about her access to the apartment, Fisher claimed that her request for an asbestos inspection was denied. She claimed that this was a routine inspection and required in order to submit any alteration plans.

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Trust But Verify: Failure to Memorialize Anticipated Extension of Time of the Essence Closing Date Leads to Loss of $937,500 Downpayment

This was originally posted on the SGR Blog.

Wishful thinking and expectations are not a legally cognizable and enforceable plan. The failure to document the adjournment of a time of the essence closing date recently cost the would be purchasers to lose a substantial million down payment.

Suncore Group SA, LLC sought to purchase real property in New York County from 1660 1st LLC. The purchase did not close on the date specified in the purchase agreement. 1660 took the position that the failure to close constituted a default by Suncore, thereby terminating the contract and entitling 1660 to retain Suncore’s down payment.

Suncore sought a declaratory judgment that 1660 was estopped from enforcing the default provision. And that Suncore was entitled to additional time in which to close on the purchase. 1660 counterclaimed, and sought a declaratory judgment that 1660 properly terminated the agreement, and that it was entitled to retain the downpayment (along with attorney fees and costs). 1660 moved for summary judgment on its counterclaims.

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The skyrocketing prices for commercial and residential real estate have led to a concomitant increase in enormous – sometimes multi-million dollar-down payments – the right to which often ends in litigation when the transaction ends and the “finger pointing” begins.  Disputes following failures or refusals to close have led to several decisions in the Appellate Division since the year 2016 began, as well as many decisions in the Supreme Court.

Princes Point LLC v. Muss Dev. L.L.C., 2016 NY Slip Op 00783 (1st Dept. February 4, 2016) Continue reading