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Adam Leitman Bailey, P.C. Halts The Illegal Sale of A Luxury Condominium Penthouse

By Adam Leitman Bailey


After the residents of a luxury condominium in Washington Heights learned that their building was riddled with severe water infiltration issues, mold and substantial structural problems resulting from shoddy construction work performed by the Sponsor, they retained Adam Leitman Bailey, P.C. to bring a lawsuit against the Sponsor. Ultimately, Adam Leitman Bailey, P.C. was successful in the Supreme Court in obtaining a judgment against the Sponsor in the underlying construction defect lawsuit. However, while the condominium’s case against the Sponsor was pending – unbeknownst to the condominium – a nationally based organization (the “Organization”) purported to purchase the penthouse unit of the condominium from the condominium’s former board president, and submitted an application to Community Board 12M’s Housing & Human Services Committee seeking approval for the establishment of a community residential facility for five developmentally disabled individuals.

Due Diligence

Upon review of the Section 41.34 of New York’s Mental Hygiene Law (“MHL”), Adam Leitman Bailey, P.C. found that the Organization was required to provide a list of all Community residential facilities currently operating in the subject municipality in conjunction with its application and at least forty (40) days before the application was to be heard, which it failed to do. Moreover, Adam Leitman, P.C. performed extensive research and was able to locate well-settled case law holding that an application which failed to provide the list of currently operating facilities within the municipality should be rejected as procedurally defective.

The Illegal Contract of Sale

After an extensive review of the condominium’s governing documents, Adam Leitman Bailey, P.C. discovered that the Organization’s application, as well as the underlying purported sale of the penthouse was improper. Pursuant to the Condominium’s by-laws, a unit in the building was to be used only as a residence, and not more than one family could occupy at any one time. Additionally, the by-laws provided that the sale of any unit was voidable by the board where the selling unit owner failed to promptly notify the board that a contract of sale had been executed, and that the board had a right of first refusal for a period of fifteen (15) days after such notification. Here, the contract of sale for the penthouse was never provided to the Condominium in accordance with its by-laws, thereby rendering the sale of the penthouse voidable at the election of the Condominium.

The Seller’s Misrepresentations

In addition, Adam Leitman Bailey, P.C. which was handling the companion litigation against the Sponsor, noted that the prior board president who surreptitiously attempted to sell the penthouse to the Organization had specifically asserted that the penthouse sustained and continues to sustain significant damage from water infiltration.  Despite this, in the Contract of Sale for the Premises, the former board president explicitly represented that there had been no water leaks either into or from the Unit during the past twelve (12) months and was unaware of any prior toxic mold or water penetration.  This representation was a clear misrepresentation.  Moreover, the fact that the penthouse suffered from water leakages presented another additional safety concern for the livelihood and well-being of the disabled individuals who desired to live in the penthouse.

The Hearing Before The Housing & Human Services Committee of The Community Board

In order to prepare for the hearing before the Housing & Human Services Committee of the Community Board, Adam Leitman Bailey, P.C. performed extensive due diligence in investigating the condominium’s governing documents, the illegal contract of sale, seller misrepresentations, along with the MHL and controlling case law concerning the placement of residential facilities.  In particular, Adam Leitman Bailey, P.C. vigorously argued to the Committee that under the MHL, the developmentally disabled had the right to live in a safe and sanitary environment, a right that this condominium, in its current state, could simply not warrant.  Adam Leitman Bailey P.C., showed the Committee members photographs depicting the myriad of safety and sanitary concerns in the condominium.  Furthermore, Adam Leitman Bailey, P.C. cited to the comprehensive engineering report that the condominium had commissioned in connection with the lawsuit against the Sponsor evidencing the construction defects that rendered the penthouse uninhabitable. Consequently, the Committee agreed with all of Adam Leitman Bailey, P.C. arguments in unanimously rejecting the Organization’s application.

The Hearing Before the Full Community Board

Armed with all of the information obtained through its vigorous due diligence, exhaustive research, and extensive documentary evidence, and consistent with the arguments that were advanced before the Committee, Adam Leitman Bailey, P.C., argued, among other things, that the Organization failed to provide the requisite information for the board to properly evaluate the underlying  application and the condominium’s overall defective conditions rendered the penthouse unlivable for the developmentally disabled individuals.The full board adopted the Committee’s resolution denying the Organization’s application on both substantive and procedural grounds, together with an additional proviso that the Organization failed to supply the necessary information for the board to make an informed decision.

Adam Leitman Bailey of Adam Leitman Bailey, P.C., represented the condominium before the Housing & Human Services Committee of The Community Board and the Full Community Board.

Adam Leitman Bailey, P.C.

NEW YORK REAL ESTATE ATTORNEYS