Thursday, January 26, 2012
Yesterday’s NYLJ reported on a NY trial court decision ordering a condo developer to return a total of $16 million in down payments to 40 condo purchasers.
The offering plan and purchasing agreement for The Rushmore, a luxury Upper West Side condo, contained a September 1, 2008 rescission date. More specifically, the offering plan allowed purchasers to get back their deposits if closings did not occur by September 1, 2008. When the closings did not happen, the purchasers sought return of their down payments. The developer argued that the date should have been September 1, 2009 – an alleged scrivener’s error by the developer’s attorney.
The trial court (Singh, J.) held that the developer did not meet “its heavy burden to show that the alleged ‘scrivener’s error’ was contrary to the intention of the parties and had not provided evidence that the parties intended a September 1, 2009 date.” In particular, the court distinguished previous cases by noting that the date in the offering plan was consistent with other documents and rescission of the contracts did not result in a windfall to the purchasers.
Ouch! Actually, that has to be more than a $16 million mistake given the change in the real estate market since the purchase agreements were signed...
CRP/Extell Parcel I, L.P. v. Cuomo (NY Sup. Ct. 113914/2010 Jan. 19, 2012). (Procedurally, the proceeding was commenced to review an Attorney General determination in favor of the purchasers).
[Meredith R. Miller]