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Representing a Potential Buyer, Adam Leitman Bailey, P.C. saves its Investor-Client from Losing Millions of Dollars by Relying on Seller (Mis)Representations

By Carolyn Z. Rualo


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.

We uncovered the Seller’s secrets.  We 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, our client cannot effectuate its demolition plans.

After we told the Seller we knew about the 7A Administrator, the Seller insisted that it had engaged an attorney to remove the 7A Administrator from the building.  We contacted HPD and found that the Seller had taken no action towards removing the 7A Administrator.  We 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 we 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, our client walked away from the deal unscathed.

Carolyn Z. Rualo & Dov Treiman of Adam Leitman Bailey, P.C. represented the client in this case.

 

Adam Leitman Bailey, P.C.

NEW YORK REAL ESTATE ATTORNEYS