Category Archives: Vendor/Purchaser Disputes

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

Posted on April 13, 2020 | Comments Off on 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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Posted in New York Law, Real Estate, Vendor/Purchaser Disputes

DOWN & DIRTY: FIGHTS OVER REAL ESTATE CONTRACT OF SALE “DOWN PAYMENTS”

Posted on August 1, 2016 | Comments Off on DOWN & DIRTY: FIGHTS OVER REAL ESTATE CONTRACT OF SALE “DOWN PAYMENTS”

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 →

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Posted in New York Law, Real Estate, Vendor/Purchaser Disputes

Four Recent Lessons in Vendor/Purchaser Disputes – Waivers, Architects, Reliance, and Porcupines

Posted on January 7, 2011 | Comments Off on Four Recent Lessons in Vendor/Purchaser Disputes – Waivers, Architects, Reliance, and Porcupines

By Victor Metsch

DUE DILIGENCE WAIVERS SURRENDER EVEN THE NOMINAL DEFENSES

In Diplomat Properties L.P. v. Komar Five Associates LLC, 899 N.Y.S.2d 237 (1st Dept. April 29, 2010), the First Department considered the sale of the $620 million Diplomat Hotel and Convention Center and related facilities in Hollywood and Hallandale Beach, Fla.

The defendant purchaser, in connection with an extension of the closing date from Aug. 1, 2007, executed an amendment to the lease acknowledging that its due diligence period had ended on June 4, 2007.

The defendant then failed to close.  It argued that the plaintiff had violated numerous contract provisions, the most notable of which was a failure to disclose an alleged agreement with the city of Hallandale that future development of the property be phased in over a 10-year period.

But the city of Hallandale twice confirmed that, notwithstanding discussions of any restrictions, there was no agreement between it and the seller to limit development on the building in any way.1

Given this position by the city, Komar’s claim that its obligations under the contract never came due because of the plaintiff seller’s nonperformance was little more than a nominal defense, thrown up in the slim hope of recovering $30 million in contract deposits.

But by agreeing, in connection with the extension of the closing date, to waive due diligence objections, Komar effectively offered its nominal defense to the court in one hand while offering $30 million to the plaintiff with the other.

The lesson here?  Before waiving due diligence objections, consider the whole deal and, if the client might want to back out, keep in mind that the waiver will surrender many nominal defenses.

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Posted in Architects, Oral Agreements, Real Estate, Vendor/Purchaser Disputes, Waivers