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Thread: How do I get out of a new construction condo contract?

  1. #1

    Default How do I get out of a new construction condo contract?

    Hello all. I am a first time home buyer and I am in a bind. I am open to hearing thoughts from the members of this message board.

    In November of 2006, I signed a contract to purchase a new-construction 2 bedroom, 2 bath condo. I was told at the time of signing that I would be able to close in April. I expected delays and assumed they would be 6 to 10 months late.

    Its now 20 months later and I still have not closed. The developer has not been forthright with me about expected closing dates. Every 3 months, they tell me that it will be in 3 months. For instance, last March, they said June, and then in June, they say September.

    I had a walkthrough on Tuesday. So far, they have completed one bathroom, and all other rooms have sheetrock and subflooring. The wiring and plumbing seems complete. It looks to me like they have at least 5 months of work to go, based on the speed of how fast they have completed things so far. However, my broker insists that the entire apartment can be completed in one month if they work hard on it (install a full kitchen, a full bath, flooring and paint walls, install washer/dryer and appliance). She knows that I want out of my contract, so I think she is just trying to mollify me.

    The worst thing about this situation is that during the walkthrough, I measured some walls and noted that the apartment is smaller than in the floorplan. A 13.6 x 10 room is really 13x9 for instance. And the living room is supposed to be 15.10 x 11.2, but it is actually 14x11. I know its just a foot here and there, but in already small rooms, a foot makes a big difference.

    The apartment has only 2 closets in the plan , one in each bedroom. I discovered that the closet in the masterbedroom has a duct of some sort running through it, it occupies more than half of the 55x22" closet.




    I also found out that the offering plan was ammended. Neither I nor my laywer were notified of the ammendments. The ammendments include increases to our maintenence costs.

    My contract states that if the developer cannot transfer title within 24 months of contract signing (barring unforseen circumstances) then I can cancel the contract. I want to get out of this contract. But I do not know if I should wait until November to start the proceedings. What if they finish quickly?

    So here is my question to the more experienced hands on this board. Based on what you have read above, what would you do? I do not know what it would cost to pay an attorney to get me out of this contract. (My deposit was 5%, around $23k). Do I have grounds to get out of the contract? Is my experience just par for the course when buying new construcion, or is this stuff abnormal?

    Thanks in advance

  2. #2

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    I would get a legal opinion right away. Having lived through delays, and moving into a new construction condo--well I wouldn't do it again. If you read any of the threads on the new construction projects every one at first seems happy--then the construction woes set in, and there are delays, living with constant construction, not getting what was offered, substandard workmanship-- I am not a lawyer, I don't work for these people, but this is the law group I wished I used to get out of my contract when I might have had a chance--- good luck and let us know if you get out of it.
    Braverman & Associates, P.C.

    331 Madison Ave


    New York, NY 10017-5102

    Phone: (212) 682-2900

    Fax: (212) 682-7718

    Contact Us



  3. #3
    Disgruntled Optimist lofter1's Avatar
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    Quote Originally Posted by mrspabs View Post

    I also found out that the offering plan was ammended. Neither I nor my laywer were notified of the ammendments. The ammendments include increases to our maintenence costs.
    Read THIS

    It sounds like some of it pertains to you:


    ... the attorney general’s regulations for newly constructed condominiums grant purchasers a right of rescission if the offering plan is amended with a material change. “Such an amendment must be served upon the purchaser” in writing, Mr. Braverman said. “And if the purchaser exercises her right of rescission, the sponsor must return any deposit or down payment previously received.”
    Contact the New York State Attorney General's Office:

    http://www.oag.state.ny.us/

    A search of "Condominium" at that site turned up a slew of links.

  4. #4
    Disgruntled Optimist lofter1's Avatar
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    Quote Originally Posted by mrspabs View Post

    ... It looks to me like they have at least 5 months of work to go, based on the speed of how fast they have completed things so far. However, my broker insists that the entire apartment can be completed in one month if they work hard on it (install a full kitchen, a full bath, flooring and paint walls, install washer/dryer and appliance). She knows that I want out of my contract, so I think she is just trying to mollify me.
    A broker LIE to a buyer!! Come now ...

    Seriously, even if the "work" is "complete" within a suspiciously quick one month, NO ONE can move in until the Department of Buildings issues a Certificate of Occupancy.

  5. #5

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    Thanks so much for all your posts.

    media, thanks for the contact.

    and lofter, thanks for the link to the new york times. want to know something funny? the blogger is writing in reply to ME!

    i just didn't fully understand him. what constiutes a material change? i have only seen 3 of the 4 ammendments (obtained from attorney general's office). most of the stuff in the ammendments talks about stuff like dishwasher models and condo boards. the only thing that concerned me was the maintence increase. is that material. is the dumb ass thing they did with my closet material? or the fact that the square footage is off?

    how long does it REALLY take to get a TCO? Thats the other thing the brokers are claiming. They are telling me that it takes 30 days to get a tco from filing and that closings can happen 30 days after that. From what I read in the new construction thread on this board, its just not true? It sounded like getting a tco can take months, and that closing doesnt happen immediately after.

  6. #6
    Disgruntled Optimist lofter1's Avatar
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    I don't get it: You day you have a lawyer. Do you listen to your lawyer? What does your lawyet say about the law and you?

  7. #7

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    the new york times lawyer is not my attorney.

    my lawyer says that the amendments are not material and that litigation would be costly and that i might now win. November isnt that far off so I might as well wait.

    i just dont know if I agree with her. i guess thats why i ask

  8. #8
    Disgruntled Optimist lofter1's Avatar
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    If the changes you describe are not "material" then ask your current attorney what actually would be considered "material" and thus allow you to ge out of the contract.

    Also: Consider taking a consult with another lawyer.

    You might need to fire the one you have now.

    Bottom line: If getting out of the Condo contract based on late delivery / material changes still requires intense litigation then buyers are basically screwed.

  9. #9

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    You're missing 34.12 sq ft + let's say 3 sq ft closet space.

    That's 37.12 sq ft.

    Considering that the cost of property in manhattan is ~ $1000 / sq ft or more, $37000 of missing space seems like a material breach to me.

  10. #10

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    Quote Originally Posted by mrspabs View Post
    The worst thing about this situation is that during the walkthrough, I measured some walls and noted that the apartment is smaller than in the floorplan. A 13.6 x 10 room is really 13x9 for instance. And the living room is supposed to be 15.10 x 11.2, but it is actually 14x11. I know its just a foot here and there, but in already small rooms, a foot makes a big difference.
    How did you measure?

    You do realize that internal measurements -- from sheet rock to sheet rock in the room -- are not correct with most rooms.

    You will usually need to measure from the outside of the building to half the way between adjoining apartments. I'm assuming both rooms mentioned above have windows and are thus on outside walls which needs to be counted.

    It is probably spelled out in the offering plan.

    Considering the minor deviations you have above, I'm guessing the actual dimensions of your rooms, when measured using the correct criteria, are well within 5% of the stated dimensions -- the typical mark of "material".

    You should read your offering plan carefully. It seems like you have not. Do you have your copy?

  11. #11

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    I should get my copy back from the attorney. I was made aware too late that the measurements are not accurate because of the practice of including walls.

  12. #12

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    It isn't that the measurements aren't accurate. It's that you didn't understand how the measurements are made.

    (BTW: Your measurements may not be accurate with half of shared interior walls and exterior walls included...I have no idea...)

    It isn't like this developer is pulling something over on you with some technical language in the offering plan. It's a pretty standard method of measurement -- just as slab to slab is standard for ceiling height even though there could be cork, plywood, and your flooring on top of your floor slab.

    I'm consistently surprised how many people plop down tens or hundreds of thousands of dollars on a down payment for new construction but never bother to spend the three hours (tops) it would take to actually read the offering plan.

    People spend more time reading about cars and test driving and that's for a depreciating asset they probably hold on to for less than four years.

    Your broker is also a good source of information -- I hope. Like all professions, there are great ones, good ones, terrible ones, and liars.

    But between your own reading of the offering plan, your lawyer, and your broker, you should be fairly confident you understand everything you are getting. Especially for all that money and what % of your net worth that a main residence usually is.

    I would:

    1) Get the offering plan from your lawyer (ask for all filed amendments as well)
    2) Read it
    3) Write down questions for your lawyer as you do and go over them with him one by one until you satisfied you understand it all. If he doesn't give you the time and clear answers, get a new lawyer. You are paying for that time, get clear answers -- even if you don't like the answer, it should be clear.

    Buying from a floor plan is difficult. It's hard to imagine layouts, space sizes, views, etc. Of course, you could get all the benefits too like 5 fixture bathrooms, etc.

    BTW: also don't assume a developer is lying when they say 3 more months. Remember, they WANT to finish and close. Every week costs them more interest on the loans. But anyone who has ever done a home renovation knows that time table estimates are just that. Things pop up, things get difficult, things get strange. The recent crane incidents have slowed all NYC developers and the little concrete truck driver strike, etc.

    And are you SURE your lawyer wasn't sent the amendments? Seems like your broker and lawyer could use a little kick in the butt.

    Good luck!

  13. #13

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    The vent taking up half the closet definitely isn't a 'standard' thing.

  14. #14

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    The vent isn't standard.

    And if it isn't in the offering plan in some place, he should certainly make a stink.

    But step 1 is getting offering plan and all amendments, reading and understanding. For all we know, it is noted on the floor plan in the offering plan or in the text. I doubt it but read first would be the right tact.

  15. #15
    http://tinyurl.com/2ag28z Front_Porch's Avatar
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    Anyone who reads this board knows I have a bias AGAINST most new developments, and I hate to be in the position of defending people who are slapping up a new condo --

    but $37K on a $1MM apartment -- 4 percent -- isn't material.

    I'm not dismissing the aggravation factor -- the people selling new devs are selling some glossy airbrushed ideal of perfection, so every single ding is in some way a breach of promise -- but if your lawyer thinks you're not going to win, he/she is probably right.

    ali r.
    {downtown broker}

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