Development

In an action for specific performance of an agreement to convey air rights, both parties appealed from Supreme Court's denial of both parties' summary judgment motions. The Appellate Division modified to grant summary judgment to purchaser, enforcing the parties' agreement that specific performance would be available as a remedy for seller breach.

Purchaser is a developer of five adjacent lots on Second Avenue in Manhattan. As of Dec. 12, 2020, seller had 35,706 square feet of inclusionary air rights (IARs) awarded as an incentive to build or rehabilitate affordable housing. IARs may be sold through private sale by obtaining a certificate of eligibility for zoning bonus from the Department of Housing Preservation and Development (HPD). In March 2021, seller contracted to sell 21,000 square feet of IARs to purchaser for $155 per square foot. During the negotiations, purchaser's broker had represented that other sellers were willing to sell IARs at $165 to $175 per square foot. Seller made no effort to corroborate those numbers beyond discussing the issue with his lawyer and two brokers who were unaware of any sales during the pandemic. Purchaser obtained the required certificate from HPD. Seller then notified purchaser that it would not transfer the IARs at the previously negotiated price, contending that purchaser had made fraudulent representations about other alleged IRA sellers. Seller offered to return the deposit or to adjust the price to $200 per square foot. Purchaser then brought this action for specific performance. Supreme Court denied both parties' motions for summary judgment.