Legal Question in Real Estate Law in New York
Preconstruction Development Contract Termination
My wife and I have been in contract for a new preconstruction condominium with 10% in excrow for over a year. We were recently notified that the unit was ready to be closed. At the final walkthrough, there were still contracters in the apartment and things weren't completed, so we postponed the closing. Our attorney actually told us it was normal to close with open items for new construction but the developer would work with us to fix everything. However, he couldn't give us any guarantees for giving up our leverage by agreeing to close. We don't feel he is working for us but just looking to collect his fee for the closing. Unfortunately, we do not see and have been told by our attorney that there is no contract expiration date in our contract or in the offering plan. We have heard that real estate contracts can be voided after a year? Is that true? Do we have any other recourse to get out at this point and get back our initial down payment?
1 Answer from Attorneys
Re: Preconstruction Development Contract Termination
There's no law that states the property must be ready in one year. Sometimes, developers have such a provision in their contracts, but I haven't seen such provisions in the past few years (with the RE boom). I have helped several clients negotiate their way out of pre-construction deals for financial and personal reasons. If they are discussing closing dates with you, you need to act quickly. In this market, developers need time to sell units and won't be open to negotiating a last-minute cancellation.
If you would like to arrange a consultation, you may contact me via email. My firm has offices in Manhattan and Westchester.
Happy New Year!
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