Representing a Potential Buyer, Adam Leitman Bailey, P.C. Saves Its Investor-Client From Losing Millions of Dollars by Relying on Seller (Mis)Representations
Adam Leitman Bailey’s due diligence team was hired to investigate whether it, as a future owner, could demolish an Upper West Side Single Room Occupancy (“SRO”) building. The asking price was remarkably low compared to similar buildings in the area but with that bargain price came certain representations by the seller.
Adam Leitman Bailey, P.C. uncovered the seller’s secrets. Adam Leitman Bailey, P.C. found that the building was operated and managed by a court-appointed 7A Administrator because the seller abandoned the building causing hazardous and life-threatening building conditions. That fact alone is grounds for the Department of Housing Preservation and Development (“HPD”) to deny a Certificate of No Harassment application. Without a Certificate of No Harassment, Adam Leitman Bailey, P.C.’s client cannot effectuate its demolition plans.
After Adam Leitman Bailey, P.C. told the seller it knew about the 7A Administrator, the seller insisted that it had engaged an attorney to remove the 7A Administrator from the building. Adam Leitman Bailey, P.C. contacted HPD and found that the seller had taken no action towards removing the 7A Administrator. Adam Leitman Bailey, P.C. also found an over $1,000,000 lien on the building held by the city for emergency repairs to the building. Hoping to not lose the buyer, the seller insisted that the lien would be removed from the building in 20 years. That was the third lie Adam Leitman Bailey, P.C. caught the seller in. In effect, that lie added over $1,000,000 to the purchase price on a building that will not earn a Certificate of No Harassment given its 7A Administrator history and the over $1,000,000 that the city had to fund to repair the building. Luckily, Adam Leitman Bailey, P.C.’s client walked away from the deal unscathed.
Carolyn Z. Rualo and Dov Treiman of Adam Leitman Bailey, P.C. represented the client in this case.