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Scott E. Mollen Scott E. Mollen

Condominium Sponsor Entitled to Keep $2 Million Deposit—Repudiation and Fraudulent Inducement Claims Rejected—If a Purchaser Defaults, Down payments of 10 Percent, 25 Percent or Even 50 Percent May Be Forfeited Absent Disparity of Bargaining Position, Duress, Fraud, Illegality or Mutual Mistake—Time of the Essence Letter Not Necessary Since Contract Specified Time Was Of The Essence—Facts Peculiarly Within The Sponsor’s Knowledge

A plaintiff condominium sponsor (sponsor) moved for a judgment on the pleadings pursuant to Fed. Rule Civ. P. 12(c) and for fees and costs pursuant to a purchase agreement (contract) between the sponsor and the purchaser (purchaser). The sponsor sought release of the deposit, on the grounds that the defendant purchaser failed to close. The purchaser had agreed to buy a new construction condominium apartment and had provided a 20 percent deposit, in the amount of $2,113,000, to be held in escrow.

After the construction was completed in July 2017, the sponsor notified the purchaser of a scheduled closing date. The purchaser did not close within the time specified by the contract. The sponsor thereafter issued a Notice of Default (Notice) on Nov. 9, 2017, giving the purchaser 30 days to cure and close. The purchaser failed to close within the cure period.

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