Cooperatives & Condominiums

Contract for Sale of Co-Op Binds Purchaser's Heirs

Warner v. Kaplan

NYLJ 12/17/09, p. 26, col. 1

AppDiv, First Dept.

(Opinion by Saxe, J.)

In an action by the estate of a co-op purchaser for return of the down payment, the estate appealed from Supreme Court's grant of summary judgment to the co-op seller. The Appellate Division affirmed, holding that the sale contract bound purchaser's heirs as well as purchaser herself.

Purchaser contracted to purchase the subject apartment for $2.3 million, and paid into escrow a deposit of $230,000. As required by the sale contract, she submitted an application to the co-op board for approval. The sale contract expressly made the contract binding on the parties' “heirs, personal and legal representatives and successors in interest.” The co-op board interviewed purchase, and approved the sale on Aug. 18, 2005. Less than two weeks later, purchaser died after suffering a stroke. Purchaser's executors then sought return of the deposit, and sellers refused. Purchaser's executors then brought this action for return of the deposit, and Supreme Court awarded summary judgment to seller. The executors appealed.

In affirming, the Appellate Division noted that a contract of sale is not terminated by the death of the purchaser. The court emphasized that this general principle was reinforced by the language of the sale contract, which expressly provided that successors in interest would be bound. The court went on to hold that the executors essentially repudiated the contract by failing to seek approval of an occupant to be selected by the estate. As a result, seller was entitled to retain the deposit paid by the purchaser.

Contract for Sale of Co-Op Binds Purchaser's Heirs

Warner v. Kaplan

NYLJ 12/17/09, p. 26, col. 1

AppDiv, First Dept.

(Opinion by Saxe, J.)

In an action by the estate of a co-op purchaser for return of the down payment, the estate appealed from Supreme Court's grant of summary judgment to the co-op seller. The Appellate Division affirmed, holding that the sale contract bound purchaser's heirs as well as purchaser herself.

Purchaser contracted to purchase the subject apartment for $2.3 million, and paid into escrow a deposit of $230,000. As required by the sale contract, she submitted an application to the co-op board for approval. The sale contract expressly made the contract binding on the parties' “heirs, personal and legal representatives and successors in interest.” The co-op board interviewed purchase, and approved the sale on Aug. 18, 2005. Less than two weeks later, purchaser died after suffering a stroke. Purchaser's executors then sought return of the deposit, and sellers refused. Purchaser's executors then brought this action for return of the deposit, and Supreme Court awarded summary judgment to seller. The executors appealed.

In affirming, the Appellate Division noted that a contract of sale is not terminated by the death of the purchaser. The court emphasized that this general principle was reinforced by the language of the sale contract, which expressly provided that successors in interest would be bound. The court went on to hold that the executors essentially repudiated the contract by failing to seek approval of an occupant to be selected by the estate. As a result, seller was entitled to retain the deposit paid by the purchaser.