Condominiums—Plaintiff Alleged That Sponsor Failed to Sell Unsold Units and the Special Risks Section of the Offering Plan Did Not Disclose the Risk That the Sponsor Would Retain the Units as Rental Units—Breach of Contract and Breach of the Implied Covenant of Good Faith and Fair Dealing Claims—Rental Tenants Allegedly Increased Electric Charges and Wear and Tear in the Building—’511 W. 232nd Owners Corp. v. Jennifer Realty’ Applicable to Sale of New Construction Condominiums—Case Law Does Not Define What Constitutes a Viable Condominium or Cooperative

The plaintiff had purchased a condominium in a newly constructed building in 2002. The sponsor had filed an offering plan (plan) with the NYS Department of Law (AG) pursuant to which it offered for sale 65 residential units. One unit was reserved for the resident manager. The plaintiff alleged that the plan included “an implied promise” that the sponsor would “sell all unsold units within a reasonable time.” The complaint also alleged that the “special risks” section of the plan “did not disclose that there was a risk that [the sponsor] would retain the unconditional right to rent rather than sell units.” The plaintiff further alleged that the sponsor had “not filed any amendments to the [plan] since April 4, 2004, [had] allowed the [plan] to lapse, and [had] not sold any of the units that were unsold on that date but [had] instead leased many, if not all, of the unsold units.”

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