Has anyone had sucess getting back a contract deposit using the AG

ask Rushmore people...

FWIW, i would've used disappearing ink on that contract

Most lawyers will take the case on a contingency basis, so you have nothing to lose.

what is AG?

Attorney General.....

Ahhhhhh... the attorney that'll sue for anything.... mmmmm .... why don't you let your dog take a shit in CP when no-one is looking and not pick up... doesn't cost you anything, unless your kid falls into it later on.......

It's all about me, me, me.... great way to live your life

how many times has this question been asked on SE? I've lost count.

I guess there has not been much sucess with this.

It seems that it is a relatively new phenomenon in NY. There have been a few cases filed but to my knowledge none have yet to proceed to litigation. Cases have been won in florida and arizona. attorneys seem pretty confident that they are on strong legal footing, and as above they are working on contingency. one attorney i conversed with would ask only for filing fees on the order of about $1000 up front and take 1/3 of recovered $ if it needs to be litigated or 25% if developer settles.

I can't believe no one has said "it depends a lot on what is written in the Offering Plan and Purchase Agreement". If your builder is doing everything they said they would do, on the schedule they said they were going to do it, should the AG's office invalidate the plan simply because people will lose money?

right, i assumed ssnyc was referring to ilsa claims, otherwise i'm sure many persons in the history of ny RE have been successful at getting deposits back when the contract is violated. it seems only a handful of developments that were obligated to register with hud did so, although i guess this is not technically a violation of contract provisions rather just noncompliance with a federal law.

a developer who filed amendment(s) addressing schedule, change date of first year budget, is relatively protected on the delay. If there is a material change like financing of project by developer, you have a better chance with the AG. Recently filed one myself but the developer returned all of the down payment prior to AG getting involved.

buy now or be priced out forever?

Initially I didn't comment on this thread, since it's been asked so many times. But, speaking as someone who got a full refund of my deposit, the issue is whether you have good legal grounds to recover it. If so, then usually you don't have to go through the process of filing with the AG - just threaten to file and explain the reasons - if they are good reasons, then you can probably negotiate a refund of some or all of the deposit.

However, if you do not have any good legal grounds for recovery, then your choices may include: (i) walk away and lose the 10% or (ii) threaten to walk away and hope the developer is willing to re-negotiate the price, or (iii) go forward and buy an incredibly overpriced asset.

Kiz, what is an ilsa claim?

30yrs, I agree with you totally.

007 & pjc, you are both inspirational

Finally, does it matter how many times this question has been asked. Everyday we get further down the road the answers change.

ILSA is a Federal law - Interstate Land Sales Act. If your development had 100 units or more, the Sponsor should have registered with HUD and provided you with a property report. Many developers in the NY area failed to comply with this requirement. If they have failed to do so, you must notify them of your intent to rescind the contract within 2 years. You have 3 years from signing to sue for recovery. This is a second option to going through the AG and, I was told, you can do both. I have trying to find out the success rate on ILSA actions, without success. If anyone has any stories, it would be appreciated.

SSNYC - Thanks and good luck to you. By the way, there is a search option on streeteasy, which allows you to pull up relevant discussions that have occurred over the past few weeks. Type in the search term "deposit". Some of these may be helpful, or at least interesting.

SSNYC, to add to what pjc said about the search option, I guess it wasn't clear if you had searched or were already aware of the other threads.
Now it appears that you did know about the other threads with your comment about the changing answers.

divve, I knew of other threads but I was unaware about the serch option as pjc pointed out (thanks, pjc)
Yesterday when I posted this question I started going through the 480 threads on here without much sucess and figured that the more time passes the more sucess stories their may be. This is why I started a new thread.

SSNYC:

The Attorney General represents the people of the state of New York. People do not pay the AG and the AG generally does not retain outside counsel as co-counsel on matters, so there is no point to your comment re: "lawyers [] earn[ing] retainer fees" with respect to cases handled by the AG's office.

Were there signs of systematic fraud in connection with your contract desposit question and the AG feels that this is wrondgoing perpetrated on the people of New York, then the AG may take up the case. Is your situation a new condo development where there are multiple aggrieved buyers? Even if it is, it is unlikely the AG would get involved. If you are talking about a lone situation where you have a gripe with a seller... not a chance in hell. You are bettr off seeking the advise of an individual attorney or law firm.

and if prices were still appreciating, we wouldn't be having this conversation. Just sayin' .......

wkim - how do you know this/reach your conclusion?

Without knowing the facts nor the purported legal basis on which SSNYC is seeking his/her deposit back, my two cents is that the AG will not get involved in this PRIVATE dispute. If you look at the comments above (re: plaintiff's attorneys taking cases on a contingency basis, etc...), you will find they are talking about private attorneys representing buyers against sellers in private transactions.

The AG's office handles cases does handle certain civil cases, but these invariably involves breaches of public trust, fraud or deceptive advertising against the public generally etc... Again, without knowing SSNYC's factual situation, or even who the seller is, the AG will not get involved unless it affects the people of the State of New York.

wkim, Thanks for your input. I have spoken with a few lawyers and they have talked about the AG as an option. I dont know if they are telling me the truth which is why I started this thread. I wanted to see if thier had been any sucess stories with the AG on getting contract deposits back. Their is some wrong doing within my situation so maybe it would work.

"...the people of the State of New York" certainly could be an individual in a dispute with a Sponsor. My understanding (and I've come to this through the advice of attorneys) is that the AG will absolutely advocate for an individual if they determine there is cause to (meaning, if the Sponsor violated regulations and/or the Offering Plan provisions - in fact, most offering plans have a simple 2 or 3 page form for one to file with the AG to do just that - it's called the "determination on the disposition of the downpayment" form. I have heard at least three examples (from another attorney) of these "administrative proceedings" that the AG has ruled in favor of an individual who filed said form and the AG compelled the Sponsor to provide relief to the claimant.

wkim - where did you get this information? Or are you just making it up?

My lawyers informed me that the AG's office was the proper venue for adjudicating claims regarding escrowed deposits. As did lawyers consulted by SSNYC. As did lawyers consulted by nondescript.

So, unless you can disclose your expertise or experience in this matter, I think you should not be making "guesses" about the AG's role.

July 4, 2008, 3:06 pm
A New Condominium Isn’t Ready on Time
By Jay Romano
We signed a contract on a preconstruction condominium in November 2006. The developers told us that it would be finished in April of this year, with early June being the latest. As these dates have passed, they have not been upfront with us on the progress of construction. Furthermore, I found out that the offering plan has been amended four times, and our attempts to get a copy of those amendments have been fruitless.

I am frustrated and I want to get out of my contract. Is there any remedy for me that does not involve losing my deposit?

The purchase of a condominium unit that is under construction is governed in New York State by the terms of the offering plan and the contract of sale, according to Edward T. Braverman, a Manhattan real estate lawyer.

Those documents, he said, generally provide for a specific closing date — subject to the purchaser’s option to cancel the contract if closing does not occur by that date.

Mr. Braverman said that the option to cancel must usually be exercised within a fixed time after the proposed closing date. “If the purchaser fails to cancel by the date specified, the purchaser’s option to cancel is deemed waived,” Mr. Braverman said. So, he said, the writer may well have waived her option to cancel the contract by failing to exercise her right to do so on time.

Nevertheless, the attorney general’s regulations for newly constructed condominiums grant purchasers a right of rescission if the offering plan is amended with a material change. “Such an amendment must be served upon the purchaser” in writing, Mr. Braverman said. “And if the purchaser exercises her right of rescission, the sponsor must return any deposit or down payment previously received.”

Accordingly, he said, if any of the four amendments (copies can be obtained from the office of the state attorney general) amount to a material change of facts or circumstances affecting the property or the offering, they must be served upon the purchaser. If the letter writer was not served, Mr. Braverman said, she should be able to cancel the contract and secure the return of the deposit.

---- Assume this is a situation involving a new condo development (I don't know that), and there were material changes in facts or circumstances and the offering plans were filed with the AG's office, SSNYC may have a shot at getting his deposit back... but it would have to be in a court of law (likely state supreme court in new york county)

Your statement that the AG's office is the proper venue for adjudicating claims regarding a real estate contract deposit is wrong. Certainly, as in other areas, the AG's office has set forth regulations regarding escrowed deposits. The AG's office may attempt to put pressure by forcing the seller to mediate or arbitrate the dispute. References above to "AG compelling sponsor to provide relief" was likely a product of such pressure, and likely resulted from a violation of some statute or regulation. In all likelihood (again without knowing th efacts) the Sponsor didnt wnat to get indicted or faced with a civil judgment (or whatever the case may be) and decided to provide the relief requested. However, there are no facts indicated above with respect to any violations of any statute or regulation in connection with SSNYC's case. Assuming no violations of statute or regulations, and a complaint is filed with the the AG's office, that office may "pressure" for the return of the deposit.

However, unless there are repeated complaints lodged by mutiple buyers against the same seller/sponsor, do you really think the AG will take LEGAL ACTION and file suit in state supreme court?? I do not think so. Absent some violation of a statute or reg, this case is governed by the purchase agreement and offering plan.

SSNYC: I really do hope your situation gets resolved to your satisfaction.

wkim - You still have not indicated whether you have any expertise or experience in this matter. I do. And yet you tell me I am "wrong". I am sorry to inform you, but you are wrong, and yet persist in giving out mis-information.

I refer you to AG's office Form ETF-1 (link below), entitled "Application to the Attorney General for a Determination on the Disposition of Downpayments", which is a pre-printed form where a purchaser may apply for a return of the downpayment (a.k.a. deposit) and a seller may apply for a determination that the deposit may be forfeited.

There are numerous reasons why a deposit may be recoverable - one of which is mentioned in the article you cite. However, "repeated complaints lodged by multiple buyers against the same seller/sponsor" is NOT necessary for the AG to get involved. Why can't you just admit that you are making stuff up, and have no basis for providing advice on this matter, or calling me (someone who was actually involved in this process) "wrong".

In any case, here is the link to the Application which gets filed with the AG in these matters (unless the parties can settle it beforehand).

http://www.oag.state.ny.us/bureaus/real_estate_finance/pdfs/etf_1_application.pdf

I would appreciate any comments on this topic. I was called recently by the AG telling me that they had a year to year and a half backlog to review my claim. They suggested to my attorney that he make a settlement offer to the developer to try for an earlier settlement.
Has anyone had a successful resolution with the AG and how long did it take to get one.

George, can I ask what the nature of your claim the the AG was

Recovery of deposit on new development that I did not close on.

Ok, but what is your claim, ie how did sponsor violate contract

i guess im asking, what the basis of your claim is? why should you get your money back?

rivas77,

most people here want their deposits back simply because their apt. has lost value from the time they signed the contract. Of course, they have to find a legitimate excuse because a decline in value is not a legal justification for the refund of a deposit.

Right
George, I'm guessing from your other posts you are considering an ILSA suit

They did not fulfill all the requirements of the AG, according to my lawyer. An ILSA lawsuit is also a possibility as they have not registered with HUD.

Unless the contract is not fulfilled in a MATERIAL way , this is pitiful bs.