Category Archives: Vendor/Purchaser Disputes

This was originally posted on the SGR Blog.

Real property purchase and sale contracts often have so-called “conditions precedent” to closing– events that must occur before a party is obligated to close. But, as a recent case illustrates, disputes often arise about which party is the beneficiary of the condition and the concomitant right to cancel.

B & A Realty Management, LLC and John Gloria entered into a purchase and sale agreement. Gloria agreed to sell an undeveloped parcel of property in Suffern to B & A Realty for $1 million. The agreement was contingent upon B & A Realty, as the purchaser, obtaining all governmental approvals for the development of the parcel within 24 months from the end of a 90-day due diligence period. The date by which B & A Realty was to obtain the approvals was referred to as the approval date. And the agreement contained a provision allowing B & A Realty to extend the approval date by three months on two occasions. The closing was to occur 30 days after the approval date.

This was originally posted on the SGR Blog.

Wishful thinking and expectations are not a legally cognizable and enforceable plan. The failure to document the adjournment of a time of the essence closing date recently cost the would be purchasers to lose a substantial million down payment.

Suncore Group SA, LLC sought to purchase real property in New York County from 1660 1st LLC. The purchase did not close on the date specified in the purchase agreement. 1660 took the position that the failure to close constituted a default by Suncore, thereby terminating the contract and entitling 1660 to retain Suncore’s down payment.

Suncore sought a declaratory judgment that 1660 was estopped from enforcing the default provision. And that Suncore was entitled to additional time in which to close on the purchase. 1660 counterclaimed, and sought a declaratory judgment that 1660 properly terminated the agreement, and that it was entitled to retain the downpayment (along with attorney fees and costs). 1660 moved for summary judgment on its counterclaims.

The skyrocketing prices for commercial and residential real estate have led to a concomitant increase in enormous – sometimes multi-million dollar-down payments – the right to which often ends in litigation when the transaction ends and the “finger pointing” begins.  Disputes following failures or refusals to close have led to several decisions in the Appellate Division since the year 2016 began, as well as many decisions in the Supreme Court.

Princes Point LLC v. Muss Dev. L.L.C., 2016 NY Slip Op 00783 (1^st Dept. February 4, 2016) Continue reading →