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BUYERS CLAIMS AGAINST SELLING AGENTS DISMISSED WHERE OFFERING PLAN DESCRIBED UNITS ACCURATELY A GANFER & SHORE, LLP CLIENT ADVISORY APRIL 2008

A dispute about rights to exclusive use of a roof setback let the purchasers of two condominium units to sue numerous defendants including the selling agents for fraud, negligence and violation of New Yorks statute governing condominium conversions.The claims were dismissed, however, because the Offering Plan that had been provided to the purchasers provided accurate information about what rights pertained to each unit.Pappas v. New 19 West, LLC, 18 Misc. 3d 1138(A), 2008 WL 509087 (Sup. Ct. N.Y. Co. Feb. 20, 2008).

Plaintiffs asserted that they met with the selling agent and advised her that they wanted to purchase a unit with outdoor space.The agent showed plaintiffs two adjoining units, one of which adjoins a setback in the roof and has a door opening onto the setback.Plaintiffs contended, in substance, that they were misled into believing that by purchasing the two units, they would enjoy exclusive use of the setback area.They also asserted that they were promised that the Sponsor would take steps to legalize the roof setbacks for use as a terrace.

The court rejected these claims on the ground that they were barred by disclosures made in the Offering Plan for the Condominium, which plaintiffs admittedly received before purchasing their units.The Offering Plan stated that the Roof Setbacks are not legal Terraces and that All Roof Setbacks are General Common Elements of the Condominium.The annexed floor plan for plaintiffs units also noted that the Roof setback is not a legal terrace.See Offering Plan for details.Because the Offering Plan accurately described what Buyers were purchasing, all fraud and misrepresentation claims were dismissed.Moreover, any reliance placed by plaintiffs on alleged promises to legalize the setback for their use as a terrace at some point in the future was unjustified because the contract of sale did not contain any such promise, and in fact contained a representation by plaintiffs that they were not relying on any promises except those contained in the Offering Plan or in the contract of sale itself.

The court also dismissed plaintiffs claim seeking to hold the selling agent liable for breach of the New York Real Property Law based upon the agents statement in an opinion letter that the allocation of common interests among the units was proportional to the floor area of the various apartments as adjusted for their other advantages.The court found that this statement would not have led a reasonable purchaser to reach any conclusion regarding roof rights that contradicted the express statements on this subject contained elsewhere in the Offering Plan.

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