Cooperatives & Condominiums

ILSFDA Applies to Condominium Units

Indomenico v. 123 Washington, LLC

NYLJ 8/30/11

U.S. Dist Ct., SDNY

(Patterson, J.)

In an action by condominium unit purchasers for rescission of their sale contracts, defendant sponsor moved to dismiss the complaint for failure to state a claim. The court denied the motion, holding that the federal Interstate Land Sales Full Disclosure Act (ILSFDA) applies to condominium units.

The subject building is a luxury high rise housing a W hotel, a restaurant, a bar, and 222 residential condominium units. On July 17, the residential units were offered to the public in an offering Plan filed with the Attorney General. The plaintiff purchasers contracted to buy their respective units in late 2007 and early 2008, all for prices in excess of $1 million. At the time the agreements were signed, the units were not yet built, and the agreements did not require that they be built within two years. In October 2007, sponsor submitted an initial registration application to HUD, as required by ILSFDA. The following month, HUD informed sponsor that the application was materially deficient, and ordered sponsor not to sell any lots until the deficiencies were remedied. In December, HUD notified sponsor that its application had been accepted, but the plaintiff purchasers' agreements were all signed and dated during the period when HUD's order not to sell was in effect. Plaintiff purchasers sought to rescind their sale contracts on that ground, and on the ground that sponsor had failed to provide the property report required by ILSFDA in advance of the signing of their purchaser agreements. Sponsor moved to dismiss, contending that ILSFDA does not apply to condominium units.

Condo Board Not Liable Under Labor Law

Guryev v. Tomchinsky

NYLJ 8/22/11, p. 24, col. 5

AppDiv, Second Dept.

(memorandum opinion)

In an action by a contractor's employee to recover damages for personal injuries from the unit owner, the condominium board, and the condominium's managing agent, the board and managing agent appealed from Supreme Court's denial of their summary judgment motion, while the plaintiff appealed from denial of his summary judgment motion on the issue of liability. The Appellate Division reversed Supreme Court's denial of the board and managing agent's summary judgment motion, holding that they were not liable under Labor Law section 200 and 241(6), and otherwise affirmed.

Unit owners hired a contractor to do work in their condominium unit. An employee of the contractor was injured when, while he was using a nail gun to install moldings, a nail ricocheted and struck his eye. He brought this action against the contractor, the unit owners, the board, and the board's managing agent, alleging both common law negligence and violations of Labor Law section 200 and 241(6). Supreme Court concluded that the employee was not entitled to summary judgment on the issue of liability, because he had based its claim on the failure to provide eye protection equipment, but the employee had failed to demonstrate that he was engaged in work that “may endanger the eyes” so as to require use of eye protection equipment under the Industrial Code. The Appellate Division affirmed that determination.

Supreme Court also denied the summary judgment motion of the board and the managing agent. In reversing the denial of summary judgment to the board and the managing agent, the Appellate Division held that the condominium defendants were not entities that had an interest in the property that made them the equivalent of the “owner.” The court noted that they did not have the right to control the work, or to insist that safety procedures were followed. As a result, they were entitled to summary judgment.

ILSFDA Applies to Condominium Units

Indomenico v. 123 Washington, LLC

NYLJ 8/30/11

U.S. Dist Ct., SDNY

(Patterson, J.)

In an action by condominium unit purchasers for rescission of their sale contracts, defendant sponsor moved to dismiss the complaint for failure to state a claim. The court denied the motion, holding that the federal Interstate Land Sales Full Disclosure Act (ILSFDA) applies to condominium units.

The subject building is a luxury high rise housing a W hotel, a restaurant, a bar, and 222 residential condominium units. On July 17, the residential units were offered to the public in an offering Plan filed with the Attorney General. The plaintiff purchasers contracted to buy their respective units in late 2007 and early 2008, all for prices in excess of $1 million. At the time the agreements were signed, the units were not yet built, and the agreements did not require that they be built within two years. In October 2007, sponsor submitted an initial registration application to HUD, as required by ILSFDA. The following month, HUD informed sponsor that the application was materially deficient, and ordered sponsor not to sell any lots until the deficiencies were remedied. In December, HUD notified sponsor that its application had been accepted, but the plaintiff purchasers' agreements were all signed and dated during the period when HUD's order not to sell was in effect. Plaintiff purchasers sought to rescind their sale contracts on that ground, and on the ground that sponsor had failed to provide the property report required by ILSFDA in advance of the signing of their purchaser agreements. Sponsor moved to dismiss, contending that ILSFDA does not apply to condominium units.

Condo Board Not Liable Under Labor Law

Guryev v. Tomchinsky

NYLJ 8/22/11, p. 24, col. 5

AppDiv, Second Dept.

(memorandum opinion)

In an action by a contractor's employee to recover damages for personal injuries from the unit owner, the condominium board, and the condominium's managing agent, the board and managing agent appealed from Supreme Court's denial of their summary judgment motion, while the plaintiff appealed from denial of his summary judgment motion on the issue of liability. The Appellate Division reversed Supreme Court's denial of the board and managing agent's summary judgment motion, holding that they were not liable under Labor Law section 200 and 241(6), and otherwise affirmed.

Unit owners hired a contractor to do work in their condominium unit. An employee of the contractor was injured when, while he was using a nail gun to install moldings, a nail ricocheted and struck his eye. He brought this action against the contractor, the unit owners, the board, and the board's managing agent, alleging both common law negligence and violations of Labor Law section 200 and 241(6). Supreme Court concluded that the employee was not entitled to summary judgment on the issue of liability, because he had based its claim on the failure to provide eye protection equipment, but the employee had failed to demonstrate that he was engaged in work that “may endanger the eyes” so as to require use of eye protection equipment under the Industrial Code. The Appellate Division affirmed that determination.

Supreme Court also denied the summary judgment motion of the board and the managing agent. In reversing the denial of summary judgment to the board and the managing agent, the Appellate Division held that the condominium defendants were not entities that had an interest in the property that made them the equivalent of the “owner.” The court noted that they did not have the right to control the work, or to insist that safety procedures were followed. As a result, they were entitled to summary judgment.