Cooperatives & Condominiums

Rescission Action Raises Questions of Fact

Alper v. Seavey

NYLJ 7/6/04, p. 26, col. 4

AppDiv, First Dept

(memorandum opinion)

In an action by a co-op purchaser for rescission of the sale contract, both parties appealed from a Supreme Court order granting summary judgment dismissing the purchaser's claim, but denying summary judgment to the seller on its counterclaim for retention of the down payment paid upon execution of the contract. The Appellate Division modified to reinstate the rescission claim, but otherwise affirmed, holding that questions of fact precluded award of summary judgment.

The purchaser contracted to purchase the subject co-operative unit for $3.1 million, putting down $310,000 as a down payment. The sale contract stipulated that the seller had not made any alterations or additions to the unit without the required consent of the co-operative corporation. After the contract was signed, however, the purchaser learned that the seller had made major alterations in 1996. Plans had been submitted tot he Department of Buildings at that time, and the co-op corporation required the seller to post a bond, which was returned in full upon completion of the work. The work actually performed, however, appeared not to be consistent with the plans filed with the Department of Buildings, or with the Building Code. The purchaser then brought this action for rescission of the sale contract.

In holding that neither party was entitled to summary judgment, the court noted that the record did not include architectural drawings of the alterations as actually constructed, and noted as well the statement by the board president that the board would not have approved any alteration that would have caused a violation to be placed on the building. Noting that the co-op board had failed to specify that it approved of the alterations actually made, and had thus failed to relieve the purchaser of the risk that she might be forced to undertake expensive renovations, the court held that the seller had failed to eliminate any material question of fact from the case. As a result, summary judgment was properly denied.

Rescission Action Raises Questions of Fact

Alper v. Seavey

NYLJ 7/6/04, p. 26, col. 4

AppDiv, First Dept

(memorandum opinion)

In an action by a co-op purchaser for rescission of the sale contract, both parties appealed from a Supreme Court order granting summary judgment dismissing the purchaser's claim, but denying summary judgment to the seller on its counterclaim for retention of the down payment paid upon execution of the contract. The Appellate Division modified to reinstate the rescission claim, but otherwise affirmed, holding that questions of fact precluded award of summary judgment.

The purchaser contracted to purchase the subject co-operative unit for $3.1 million, putting down $310,000 as a down payment. The sale contract stipulated that the seller had not made any alterations or additions to the unit without the required consent of the co-operative corporation. After the contract was signed, however, the purchaser learned that the seller had made major alterations in 1996. Plans had been submitted tot he Department of Buildings at that time, and the co-op corporation required the seller to post a bond, which was returned in full upon completion of the work. The work actually performed, however, appeared not to be consistent with the plans filed with the Department of Buildings, or with the Building Code. The purchaser then brought this action for rescission of the sale contract.

In holding that neither party was entitled to summary judgment, the court noted that the record did not include architectural drawings of the alterations as actually constructed, and noted as well the statement by the board president that the board would not have approved any alteration that would have caused a violation to be placed on the building. Noting that the co-op board had failed to specify that it approved of the alterations actually made, and had thus failed to relieve the purchaser of the risk that she might be forced to undertake expensive renovations, the court held that the seller had failed to eliminate any material question of fact from the case. As a result, summary judgment was properly denied.