http://www.nytimes.com/2010/10/21/nyregion/21condos.html?pagewanted=1&hp The building went up as the real estate market went down, and Mr. Bacolitsas and his wife sought a $600,000 reduction in the purchase price. When they did not get it, they decided they did not want the apartment anymore. Their contract, like virtually all real estate contracts, required that they surrender the $510,000... [more]
http://www.nytimes.com/2010/10/21/nyregion/21condos.html?pagewanted=1&hp
The building went up as the real estate market went down, and Mr. Bacolitsas and his wife sought a $600,000 reduction in the purchase price. When they did not get it, they decided they did not want the apartment anymore. Their contract, like virtually all real estate contracts, required that they surrender the $510,000 deposit.
But last month, a judge ruled that the couple could walk away with their money. It was one of a series of recent rulings in New York and other states that have enraged developers and given an escape hatch to buyers who signed contracts at the worst possible time, before one of the biggest real estate meltdowns in decades.
The buyers — some wealthy, some not — are successfully using a 1968 federal law intended to protect buyers of out-of-state land from unscrupulous developers or brokers. But in many of these cases, the properties have been built as advertised.
Instead, lawyers for the buyers are finding fault in wording that technically violates the law in contracts or other paperwork — language that few developers or lawyers paid much attention to during the long real estate boom. Lawyers have won back deposits for errors as simple as failing to give buyers a legal description of the property or to register the building with the Department of Housing and Urban Development, a basic requirement that many companies nonetheless overlooked.
“The statute was never designed for purchasers of luxury condominiums in urban areas to get out of contracts because of changes in the economy,” said Bruce H. Lederman, a lawyer defending developers in two such cases out of Long Island City, Queens. “It was designed to protect unsophisticated out-of-state purchasers like Jackie Gleason in ‘The Honeymooners’ from Florida swampland schemes.”
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Response by MrSuttonPlace
almost 16 years ago
Posts: 155
Member since: Aug 2009
cry me a river. poor innocent developers.
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Response by Riversider
almost 16 years ago
Posts: 13573
Member since: Apr 2009
I'm Shocked! Shocked to find people using the law to their advantage!
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Response by brickcounty
almost 16 years ago
Posts: 6
Member since: Oct 2010
Aboutready is still trying to get treble damages out of her landlord even though she's a market rate tenant. She just doesn't post that news on streeteasy anymore.
I can't wait until the toilet seat breaks.
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Response by Wbottom
almost 16 years ago
Posts: 2142
Member since: May 2010
developers' sales contracts have for years existed stacked in their favor, loaded with shit that, if tested, had to be unenforceable--the shit failed the test....whatever
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Response by Riversider
almost 16 years ago
Posts: 13573
Member since: Apr 2009
This is very much like the MERS issue. A bunch of laws sit on the books never really being used because the situations haven't occured yet. In the past, the buyer would've taken possession and sold it or the developer would've been happy to work out a deal knowing full well market price had increased. Well, that's not the case anymore, so buyers and attorneys are exploring the legal options and making sure the contract wasn't broken by the developer in some way that allows them back out. The sponosrs themselves have been using the courts with regards to their lenders and contractors for years. What's new is the class action suits by the buyers. How dare the buyers make use of the legal system for their benefit.
Same goes for MERS, and the bad foreclosurees. While the issues were always there, in the past, the borrowers could continue to refinance and take money out, or they could upon not meeting an obligation sell the property pay off the debt an walk waway with a few dollars. What's changed is that home prices stopped going up, and now they are using the law to make sure that the party foreclosing owns the mortgage. How dare the home owners expect the foreclosing party to actually own the mortgage, afer all they stopped paying. Hell shouldn't anyone be able to foreclose on a deadbeat home owner, irrespective of owning the mortgage?
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Response by AvUWS
almost 16 years ago
Posts: 839
Member since: Mar 2008
Let's see, weren't these contracts drawn up by the developers in the first place? I am betting that when they offered these contracts they were very amenable to changes like the additions of mortgage contingencies (and/or any other things the buyers lawyer recommended). Not.
They are simply not going to find much sympathy considering that these contracts are the ones THEY DREW UP! Next time they should get themselves better lawyers. Or fulfill the contract.
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Response by Riversider
almost 16 years ago
Posts: 13573
Member since: Apr 2009
I'm not going to make any case for the developers, but the reality is that for the most part these contracts are copied from the previous transaction and are based on New York State Condo law. I doubt that the developers paid much attention unless there was something very specific they wanted inserted into the document.
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Response by sledgehammer
almost 16 years ago
Posts: 899
Member since: Mar 2009
"They are simply not going to find much sympathy considering that these contracts are the ones THEY DREW UP! Next time they should get themselves better lawyers. Or fulfill the contract."
I agree 100%
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Response by Wbottom
almost 16 years ago
Posts: 2142
Member since: May 2010
youre kidding right?
you dont think developers, with the scale they have to employ smart lawyers to write up their contracts, seek to maximize their interests?--
and most of the stacked crap that goes into these contracts has no basis in the condo laws
have you ever bought new construction? I have, and against the advice of my lawyer, despite that the contract i signed was less onerous than most--
so much in these contracts is unenforceable if put to legal test, but again developer has the scale to fight hard, and if you end up in some mess with a developer, even if you prevail, it will be painful and probably costly
it is nice nonetheless to see some willing to fight in the current environment, and prevailing
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Response by alanhart
almost 16 years ago
Posts: 12397
Member since: Feb 2007
Real estate developers are artists, and artists just don't have a heady for all these bureaucratic, legallish kind of things and stuff, or money or anything like that. They just create art. So it's really outrageous that out-of-control Big Government is messing with private sector businesses and interfering with the invisible hand of The Market, the purest and most perfect of all possible entities. America is going to hell in a handbasket, and we're really really angry about it. The developers should be offered an opportunity to go off to a retreat in the country somewhere so they can just focus on their art. I think there's a cute little artists' colony in Danbury.
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Response by AvUWS
almost 16 years ago
Posts: 839
Member since: Mar 2008
The developers didn't put money into the contracts because they figured they didn't have to. They had the premium product people wanted to buy. The parts of the contract that mattered to them were not the clauses that would allow a person out of it (after all, who would want out of a deal to buy Manhattan real estate?) but to make sure that they could keep the deposit in case someone couldn't come through, or that they could keep as much control over the process.
Their world changed in 2008/9 and now they are stuck with contracts written for the wrong priorities.
cry me a river. poor innocent developers.
I'm Shocked! Shocked to find people using the law to their advantage!
Aboutready is still trying to get treble damages out of her landlord even though she's a market rate tenant. She just doesn't post that news on streeteasy anymore.
I can't wait until the toilet seat breaks.
developers' sales contracts have for years existed stacked in their favor, loaded with shit that, if tested, had to be unenforceable--the shit failed the test....whatever
This is very much like the MERS issue. A bunch of laws sit on the books never really being used because the situations haven't occured yet. In the past, the buyer would've taken possession and sold it or the developer would've been happy to work out a deal knowing full well market price had increased. Well, that's not the case anymore, so buyers and attorneys are exploring the legal options and making sure the contract wasn't broken by the developer in some way that allows them back out. The sponosrs themselves have been using the courts with regards to their lenders and contractors for years. What's new is the class action suits by the buyers. How dare the buyers make use of the legal system for their benefit.
Same goes for MERS, and the bad foreclosurees. While the issues were always there, in the past, the borrowers could continue to refinance and take money out, or they could upon not meeting an obligation sell the property pay off the debt an walk waway with a few dollars. What's changed is that home prices stopped going up, and now they are using the law to make sure that the party foreclosing owns the mortgage. How dare the home owners expect the foreclosing party to actually own the mortgage, afer all they stopped paying. Hell shouldn't anyone be able to foreclose on a deadbeat home owner, irrespective of owning the mortgage?
Let's see, weren't these contracts drawn up by the developers in the first place? I am betting that when they offered these contracts they were very amenable to changes like the additions of mortgage contingencies (and/or any other things the buyers lawyer recommended). Not.
They are simply not going to find much sympathy considering that these contracts are the ones THEY DREW UP! Next time they should get themselves better lawyers. Or fulfill the contract.
I'm not going to make any case for the developers, but the reality is that for the most part these contracts are copied from the previous transaction and are based on New York State Condo law. I doubt that the developers paid much attention unless there was something very specific they wanted inserted into the document.
"They are simply not going to find much sympathy considering that these contracts are the ones THEY DREW UP! Next time they should get themselves better lawyers. Or fulfill the contract."
I agree 100%
youre kidding right?
you dont think developers, with the scale they have to employ smart lawyers to write up their contracts, seek to maximize their interests?--
and most of the stacked crap that goes into these contracts has no basis in the condo laws
have you ever bought new construction? I have, and against the advice of my lawyer, despite that the contract i signed was less onerous than most--
so much in these contracts is unenforceable if put to legal test, but again developer has the scale to fight hard, and if you end up in some mess with a developer, even if you prevail, it will be painful and probably costly
it is nice nonetheless to see some willing to fight in the current environment, and prevailing
Real estate developers are artists, and artists just don't have a heady for all these bureaucratic, legallish kind of things and stuff, or money or anything like that. They just create art. So it's really outrageous that out-of-control Big Government is messing with private sector businesses and interfering with the invisible hand of The Market, the purest and most perfect of all possible entities. America is going to hell in a handbasket, and we're really really angry about it. The developers should be offered an opportunity to go off to a retreat in the country somewhere so they can just focus on their art. I think there's a cute little artists' colony in Danbury.
The developers didn't put money into the contracts because they figured they didn't have to. They had the premium product people wanted to buy. The parts of the contract that mattered to them were not the clauses that would allow a person out of it (after all, who would want out of a deal to buy Manhattan real estate?) but to make sure that they could keep the deposit in case someone couldn't come through, or that they could keep as much control over the process.
Their world changed in 2008/9 and now they are stuck with contracts written for the wrong priorities.