Warehouse11 Mechanics Liens

What happened?

Basically the sponsor neglected to attach any information of litigation in the offering plan and was requested by the Attorney General’s office to imminently outline the previous litigation and release the complete 4th amendment. What was disclosed was the bankruptcy the sponsor had faced, which the majority of the public knew about. But what's shocking was, the $1.5 million of Mechanics Liens against the building. Which means buyers are responsible of paying back $1.5 million to these contractors. The sponsor gave the buyers only a few days to resume their closings or rescind their contract.

It seems rather shady that the sponsor withheld this information to strategically put buyers in a situation of extreme pressure to decide days before closing to accept the responsibility of these liens! I doubt that anyone in their right mind would buy any apartment knowing that there are liens against it.

thats brutal w11. hope it works out for you. i think the other questions are: do they plan on assessing all 120 units in the building 12,500$? or do the folks in contract now end up paying the lien for the unsold units as well? also did you get assurances that this is the only lien?

Housing in NYC, becomes more interesting, this is a never ending story. Did brownstoner, curb or any other outlets publish this story?

There was an article in the Real Deal last week, from the developer POV:
http://therealdeal.com/newyork/articles/fisher-designed-warehouse-11-marketed-by-david-maundrell-of-apartmentsandlofts-com-relaunches-sales-as-buyers-granted-right-of-rescission-because-of-lead-developer-isack-rosenberg--2
It's manipulation 101, trickle the bad news, because people tend to stick to their prior decisions even as they learn of facts that would have turned them off if they had known prior to committing.

Rescind, cut your losses and walk away. Bankruptcy, oil leaks, mechanics liens, and an organization like Apartments and Lofts.

What else is going to seep out of woodwork after you move in and the problem becomes yours on a permanent basis?

Somehow not surprising. This has been a development to avoid from the start it seems. If this all checks out, I hope the developer gets his (and not in a good way).

why can't they get their deposits back?
Is it possible to find out if any potential/pending liens on a building?

W11 Please contact your selling agent. The amendment does not say your are responsible for payment of the liens. The amendment states: Item d. The anticipated proceeds of the closings under outstanding Purchase Agreements are in an amount sufficient to satisfy the Sponsor’s obligations to the Bank under the Settlement Agreement, and to satisfy all mechanics’ liens that have been filed against the Property. A list of the outstanding mechanics’ liens filed against the Property is attached to this Amendment as Exhibit C.

Warehouse 11 is now FNMA approved.

i haven't seen the offering but is the mechanics lien discussed above the same one brought by severud associates consulting engineers? apparently, the nys supreme court just entered an order reinstating, amending & extending that lien as of today, june 14th. seems like a lot of continued litigation activity...

bjw2103 - are you going to apologize to me now?

nyc2009, apologize for what exactly? You've made a lot of claims backed by very little (if anything). How does this thread change any of that?

w11 is going to be foreclosed on again and the bottom is going to fall completely out from under the Edge soon.

So the original sponsors are still in possession of this building? Didn't Capital One try to take ownership of the building? If mechanics lien do not get paid back by the sponsors, then it will ultimately become the responsibility of all condo owners. Also, as a condo owner, you will NOT be able to resell your apartment until the mechanics claim has been satisfied.

Hi All! This thread is very disconcerting to me! I have JUST finished (today) asking my agent to place a bid on a unit at W11. Where can I find the most up-to-date info on the above? Thanks all! =)

jcc239 -- the liens are not your responsiblity as an owner. Your broker can get all the info and everything will be laid out in the offering plan.

jcc239 I think there might be other issues you need to consider before buying here, there was a more extensive thread about 6 months ago

http://streeteasy.com/nyc/talk/discussion/17492-warehouse-11-and-implications-for-pricing-in-wburg

The building has an interesting repuation online, to say the least. But I'm willing to bet most of those people posting are not lawyers, engineers, etc. Most importantly:

1. get a good lawyer. s/he can get updated information regarding liens, the loans the developer owes, etc.
2. read the condo offering plan cover to cover and if you do not understand every word of it, have your lawyer explain it to you.
3. get an inspection of not only your unit, but of the common areas, basement, etc.

But you do agree that there is significant risk, above and beyond that seen in most other new developments. Due diligence can't cover every possible bad outcome. For instance- how responsible do you think this sponsor will be to correcting punch-list items?

Yup, there is more risk and you need to factor that into your bid and what that risk is worth to you. Regarding punch list items, thats something any good lawyer can write around. The good thing about W11 is that its complete (individual apartment wise), so you can put specifics into the contract regarding certain items that are of concern to you. if they don't agree to them? walk away.

Go to other buildings the sponsor has built (the other developments they have done should be in the offering plan). Find out the construction team. Go to their buildings. Walk in them. Ring the buzzers and ask to see the apartments -- bribe people with baked goods if you have to. Stand outside for an an entire day and ask residents/owners what they really think.

No risk, no reward. But, factor that risk into your price.

What's the basis for stating that the mechanics lien are the responsibility of the sponsor not the buyers/owners? Liens are usually attached to a property and runs with the property until it is cleared. I like the pricing and location, but the risks seem higher than usual and that seems to be reflected in the pricing.

If the factual claims re non-disclosure are correct, the sponsor is guilty of
serious fraud. There is a First Appellate Department decision dealing with that
exact type of non-disclosure, Horn v. ___ 57th Street. U think the citation is
527 NYS2d 1.

The facts alleged also seem likely to constitute securities fraud under New York's
Marin Act, but only the Attorney General can prosecute Martin Act violations, and
Cuomo has taken millions in RE developer campaign donations.

@joseesq - I would ask your lawyer. I had it explained to me, but forgot the explaination.

Warehuse 11 seems to be putting an awful lot 1 bedroom apts on the market for a building that was supposedly sold out of 1 Bedroom apts. At least the story was that all of the 1BD's were in contract... So many lies.

You need the title clear before closing, so your unit will be free of all mechanic liens, otherwise you cannot close! Really, talk to your attorney, some of the people in this blog really doesn't know what they are talking about.

Anyone still considering this place after all the information about these crooks has come out needs to forget about leins, disclosures,1 bedrooms being sold out and get to a hospital as soon as you can to have your head examined for damage.