Achieving Success for a Developer Despite the Lack of Repairs Needed
Developers had turned a commercial building into residential condominium units in one of Manhattan’s most expensive areas with prices reaching up to $20 million. With the latest technology, heated floors, high ceilings, private balconies, and elevators the building had been built well. Most of the complaints coming from residents were minor, standard, and quickly fixed by the developer. Other complaints came from a lack of education on how the appliances or advanced technology inside the unit worked, even though they included instructions on how to use each feature. However, it appeared that none of the residents had read the manuals or instructions.
Because not all of the units were sold and because of the developer’s sensitivity in keeping its reputation intact, the developer put up with punishing demands and the building ran more like a hotel or rental building than a condominium. Without any justification, a small group of unit owners demanded that they have control over the board of directors three years before the offering plan permitted the transition.
Adam Leitman Bailey, P.C. hired an architectural and engineering report to do a complete physical of the building. The report found very few defects and the ones mentioned were immediately repaired except for one. One of the problems mentioned in the report that could not be fixed was the noise problems in the hallway and parts of some units due to the fact that this building was a former factory and was constructed using certain materials that propelled noise. Interestingly, only one-unit owner complained of noise due to the soundproofing installed in the building. However, the noise issue was a real issue and was mentioned in the risk section of the offering plan.
The group of owners made a list of demands. Very few of them included repairing the units. The list started with a large check to individual unit owners. However, internal discord must have occurred as the unit owners could not agree on how much each unit owner demanded when they did not match bids from repair items. So the building included a new gym and additional amenities instead of a large check.
These negotiations went on for two years and eventually, the unit owners hired a law firm after first trying to hire Adam Leitman Bailey, P.C. which obviously conflicted with the case.
Because the building was small, Adam Leitman Bailey, P.C.’s attorneys counseled its client to spend whatever time it took educating the residents on how to use the amenities. Any and all repair, even when caused by the owner, was responded to and fixed. Because some of the owners were high profile and had notorious reputations, Adam Leitman Bailey, P.C.’s attorneys expected that eventually the owners would not be able to remain as a working group.
Adam Leitman Bailey, P.C. knew that some of the high-profile owners did not want to file a lawsuit with their names on it especially since most of the claims had been resolved and anything filed would be petty. Adam Leitman Bailey, P.C.’s attorneys counseled correctly. The attorneys asked them to order their own engineer’s report and the report was intelligible as it mentioned almost no repair items and focused on how the building was made, and the materials used. Adam Leitman Bailey, P.C. then demanded a list of items that needed to be resolved so its attorneys could work towards settling the matter.
Instead of a list, they came back asking for extra amenities and an improved gym as well as board control. The benefit for Adam Leitman Bailey, P.C.’s client was the low-price tag to build what they wanted since the staff had many workers on staff that could get the job done.
Secondly, despite the lack of merits of their case, this developer was in negotiations to build one of the largest developments in the entire city and could not let this small building have any press or a lawsuit as it could impede the other project. Adam Leitman Bailey, P.C.’s attorneys also had one until left to sell in the building.
The final issue was that Adam Leitman Bailey, P.C.’s attorneys required every unit owner in the entire building to sign on to the settlement. Adam Leitman Bailey, P.C. knew this would be difficult as some of the owners were no longer getting along and two others had listed their units for sale and did not want to bind a future owner.
It took another nine months to get every unit owner to sign on without using any effort on Adam Leitman Bailey, P.C.’s part and Adam Leitman Bailey, P.C.’s attorneys began construction.
No lawsuit was ever filed or leaked to the press. The final unit sold and the deal was closed for the large development consisting of over 700 units and retail space.
Adam Leitman Bailey and John Desiderio counsel the developer in this matter.