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Avoiding Litigation, Adam Leitman Bailey, P.C. Attorneys Persuade Seller-Sponsor to Make Corrections and Repairs to Recently Purchased Manhattan Penthouse

By Adam Leitman Bailey


In the fall of 2016, a well-known celebrity purchased a remodeled penthouse apartment in a building recently converted to condominium ownership. The offering plan and contract under which the celebrity purchased the penthouse from the Sponsor specified (a) that the apartment was being sold “as is” in the condition in which it was at the time the purchase agreement was signed, subject to ordinary wear and tear, and (b) that the Sponsor made “no representations or warranties other than as specified in the offering plan.” Aside from some cosmetic finishing and punch list work the Sponsor agreed to do in the apartment, the Sponsor had no other contractual obligations to the celebrity.

Upon moving into the apartment soon thereafter, the celebrity discovered that water was leaking into the living room from under the glass wall-and-door system, installed around three sides of the room, which opens to an outdoor terrace. As a result, much of the living room flooring and interior walls and finishes of the apartment were significantly impacted by water infiltration. Water infiltration spread along the perimeter of the glass wall and under the sub-floor which caused buckling and cupping of the living room floor.

Professionals hired by the celebrity and the Sponsor disagreed on both the cause and the extent of the water damage, with the Sponsor’s architect attributing the cupping of the flooring, not to any defect in the glass wall, but rather to water spilled within the apartment by the occupant. As a result, even though the Seller-Sponsor had stated in an email that he would take full responsibility for the floor damage, several months passed without any effective remedial action being taken to prevent further water damage in the apartment.

At that point, the celebrity hired the attorneys of Adam Leitman Bailey, P.C. (“ALBPC”). Upon ALBPC’s recommendation, a forensic architect engineering firm was engaged to conduct a thorough inspection of the apartment and to issue a comprehensive report on the causes of the water infiltration and status of the damaged areas.

The forensic architect engineering firm noted the following conditions:

(a) That severe buckling in the dining area “created a hump approximately 1” high;”

(b) That inspection of the sill flashing, upon removal of a portion of the exterior paving, showed that “there was no sealant under the flashing;”

(c) That further inspection showed “that there was no positive seal at the interior or exterior of the area under the sill,” resulting in a gap that allows water to enter under the sill flashing and run into the interior and that also “allows free communication of air between interior and exterior;”

(d) That inspection “could not confirm that there was sealant around the screw penetration [of the sill extrusion] that would prevent water from infiltrating through the assembly;”

(e) That it appeared that the aluminum trim on the metal clad exterior pier (which “normally . . . is installed dry – without any sealant – because it is intended to be purely ornamental, . . . had been sealed in place,” and, therefore, “that the design of the wall may improperly rely on these components as waterproofing components;

(f) That at one location there was an interior dam missing from a lap joint in the aluminum cladding which would allow water to infiltrate the joint;”

(g) That inspection of a small area of the wood subfloor adjacent to the buckling showed that “the plywood subfloor abutting the concrete curb was damp, and the debris on the concrete slab was also damp,” and “there were no signs of any water spills in the area;” and

(h) That there was “water staining at the top corners of some spandrel panels below the skylight portion of the glazed openings.”

The forensic architect engineer report recommended that remedial measures include additional observation and water testing to identify all area of water infiltration, and ALBPC made demand upon the Seller-Sponsor to undertake to implement all of the recommendations and proceed to correct and repair all damaged areas of the penthouse.

ALBPC pointedly reminded the Seller-Sponsor of his written acknowledgement of responsibility for the floor damage and noted as well: (a) that the defects in the glass wall-and-door system could not have been observed in the pre-Closing inspection of the apartment, (b) that it was evident that steps had been taken to actively and fraudulently conceal the damage, and (c) that the Seller-Sponsor (as the prior Unit Owner of the penthouse unit), under the Condo Declaration, was solely responsible for maintenance, repair and restorations, both structural and non-structural of all windows and doors located in or which otherwise service the penthouse unit.

As such, ALBPC contended that its client-purchaser “was entitled to expect and anticipate that the “AS IS” condition of the apartment would be in the maintained, repaired, and restored condition that fully met Seller-Sponsor’s obligations” under the Declaration.

The parties then entered into negotiations which ultimately resulted in the Seller-Sponsor agreeing to repair the glass wall system to eliminate the source of the leaks pursuant to a scope of work reasonably satisfactory to the forensic architect engineer, and subject, upon completion, to reasonable, limited verification testing of all repairs to confirm that the work, as implemented, is effective. Accordingly, pursuant to the parties’ agreement, waterproofing work on one portion of the glass wall and door system was performed in winter 2017-2018. That work was certified effective by the forensic architect engineer, and Seller-Sponsor has completed waterproofing of the remaining section of the glass wall system subject to the same verification process. In addition, the Seller-Sponsor agreed to make a monetary payment to the client, based on contractor estimates ALBPC obtained for the client, in full and final settlement of any and all claims related to the flooring issues.

This case demonstrates the ability of ALBPC attorneys to achieve positive results for ALBPC clients without having to start a lawsuit. Under the circumstances, ALBPC attorneys were able to implement a strategy aimed at persuading the Seller-Sponsor that cooperation and compromise, instead of costly and lengthy litigation, were in the interests of both parties. The ALBPC attorneys who handled the matter were Adam Leitman Bailey, John M. Desiderio, and Joanna Peck.

Adam Leitman Bailey, P.C.

NEW YORK REAL ESTATE ATTORNEYS