Saturday, March 7, 2009
In What Contract? in the NYT Real Estate section, reporter Michael M. Grynbaum begins:
COULD the days of the iron-clad contract be numbered?
It used to be that once a buyer went to contract on an apartment, the terms of the deal were all but set in stone. Sales prices never budged, and if the buyer balked, the down payment went bye-bye.
But double-digit price declines and the lending drought have started to threaten this once near-inviolable pillar of New York real estate. Buyers are demanding concessions from developers on apartments that they say have lost up to 30 percent in value. Others are hoping to back out of their contracts entirely, while keeping their down payments in the process.
The sudden demand has sent lawyers scurrying to uncover avant-garde legal tactics for ducking out of a deal. Downtown conversions like 75 Wall Street and new developments like One Hunters Point in Long Island City are facing suits from buyers seeking to break contracts on the basis of a once-obscure consumer protection law.
Read more here. The article is adorned with an illustration of a burning contract. Perhaps I should ask my dean if I can teach torts next year.
[Meredith R. Miller]