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Realty Law Digest | New York Law Journal

New IdentityTheft Scam

Scott E. Mollen

Condominiums—Reserve Fund—Board of Managers Alleged That Sponsor Miscalculated Reserve Fund, Claimed Reserved Fund Credits to Which It Was Not Entitled and Performed Shoddy Repair Work—Property Was Conveyed “As-Is,” Subject to Certain Exceptions

A sponsor of a condominium conversion had priced the condominium units, established a reserve fund and undertook to make certain improvements on the building. A plaintiff board of managers (board) alleged that the sponsor had “miscalculated the amount of the reserve fund, claimed reserve fund credits to which it was not entitled, and…performed shoddy repair work in the building for which the board is entitled to damages.”

The court had to determine the correct amount of the reserve fund. The options were (a) 3% of the total tenant-offeree price; (b) 3% of the total non-tenant-offeree price; or (c) 3% of (A) plus $71,100, the additional amount paid by a tenant purchaser, “A,” for his apartment. The court also had to determine what reserve fund credit, if any, the sponsor could claim based on an elevator modernization. The options were (a) the full amount of the modernization costs; (b) the amount of the modernization costs minus $15,000, which is the stipulated cost of only curing code violations; or (c) zero. The court also had to determine whether the board could recover costs for repairing the sponsor’s allegedly defective work in the building.

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Source: on 2020-07-28 14:56:15

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