Cooperatives & Condominiums

Purchaser's Access to True Facts Before Contract Bars Fraud Claim

Demetriou v. Connexion I Real Estate Services, Inc.

NYLJ 7/8/09, p. 38, col. 6

App Term, 2nd, 11th & 13th Districts

(memorandum opinion)

In an action by condominium purchaser against real estate broker and purchaser's lawyer, the broker and the lawyer appealed from Civil Court's award of damages, after trial, for fraud by the broker and malpractice by the lawyer. The Appellate Term reversed and dismissed the complaint, concluding that purchaser had discovered the true facts about the unit before entering into the sale contract.

After contracting to purchase a condominium unit, purchaser did not appear at closing, allegedly because of a dispute about the cost and availability of parking. As a result, purchaser lost his $10,000 down payment. He then brought this action against, among others, his real estate broker and his lawyer, alleging fraud by the broker and malpractice by the lawyer. Civil Court awarded purchaser $5,000 against each party, and both defendants appealed.

In dismissing the fraud claim against the broker, the court acknowledged that broker's advertisement represented that parking was included with the unit, but noted that a purchaser can only prevail in an action for fraud when the purchaser demonstrates justifiable reliance on a misrepresentation. In this case, purchaser admitted that he spoke to representatives of the owner before entering into the sales contract, and the representative told him that there was a fee for parking and that a spot would become available after closing. In light of conversations with the building's representative, purchaser could not establish justifiable reliance on the broker's representations.

In dismissing the malpractice claim, the Appellate Term emphasized that purchaser had introduced no expert testimony to show that the lawyer's representation fell below the standard of care required of a legal professional. Although purchaser had alleged that the lawyer had failed to apprise him of the condominium rules, and of the terms of the sale contract, the court noted that there was credible evidence that the lawyer had gone over the terms of the contract with purchaser.

Purchaser's Access to True Facts Before Contract Bars Fraud Claim

Demetriou v. Connexion I Real Estate Services, Inc.

NYLJ 7/8/09, p. 38, col. 6

App Term, 2nd, 11th & 13th Districts

(memorandum opinion)

In an action by condominium purchaser against real estate broker and purchaser's lawyer, the broker and the lawyer appealed from Civil Court's award of damages, after trial, for fraud by the broker and malpractice by the lawyer. The Appellate Term reversed and dismissed the complaint, concluding that purchaser had discovered the true facts about the unit before entering into the sale contract.

After contracting to purchase a condominium unit, purchaser did not appear at closing, allegedly because of a dispute about the cost and availability of parking. As a result, purchaser lost his $10,000 down payment. He then brought this action against, among others, his real estate broker and his lawyer, alleging fraud by the broker and malpractice by the lawyer. Civil Court awarded purchaser $5,000 against each party, and both defendants appealed.

In dismissing the fraud claim against the broker, the court acknowledged that broker's advertisement represented that parking was included with the unit, but noted that a purchaser can only prevail in an action for fraud when the purchaser demonstrates justifiable reliance on a misrepresentation. In this case, purchaser admitted that he spoke to representatives of the owner before entering into the sales contract, and the representative told him that there was a fee for parking and that a spot would become available after closing. In light of conversations with the building's representative, purchaser could not establish justifiable reliance on the broker's representations.

In dismissing the malpractice claim, the Appellate Term emphasized that purchaser had introduced no expert testimony to show that the lawyer's representation fell below the standard of care required of a legal professional. Although purchaser had alleged that the lawyer had failed to apprise him of the condominium rules, and of the terms of the sale contract, the court noted that there was credible evidence that the lawyer had gone over the terms of the contract with purchaser.