Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Commercial Leasing Law & StrategyFeaturesLandlord Tenant LawLitigation

A Tutorial On Contract Liability for Real Estate Purchasers: 'Huguenot LLC v. Megalith Capital Group Fund I, L.P.'

By William J. Geller and Robert J. Braverman
October 01, 2024

In June 2024, the First Department decided Huguenot LLC v. Megalith Capital Group Fund I, L.P., 228 A.D.3d 404 (1st Dept. 2024), which resolved a question of liability for a group of condominium apartment buyers and in so doing, touched on a wide range of issues about how contracts can obligate purchasers of real property. In ultimately rejecting the plaintiff's claim that the apartment buyers could be responsible for the condominium developer's breach of a contract recorded as part of the condominium's declaration, the court illustrated some important points about how contracts can run with the land, or otherwise impose liability on real estate buyers.

Factual Background

The plaintiff was the original owner of a building in lower Manhattan, and entered into a contract under which the developer would renovate the building and then divide and sell the upper floors as condominium apartments, while the plaintiff would retain ownership of the storefront on the ground floor as a commercial unit. After the plaintiff and the developer recorded a condominium declaration dividing the building up into two condominium units, the ground floor commercial unit and "Unit 2" which would later be subdivided into residential apartments, they entered into a contract amendment (the Recorded Contract) which set forth the requirements for the construction work the developer would do in the commercial unit and provided that it could be recorded as part of the condominium's declaration. In recording the Recorded Contract as part of the declaration, the plaintiff specified that the defined term for the developer in the Recorded Contract "shall mean and refer to" a term that included owners of the apartments that Unit 2 would be subdivided into. Later, the developer recorded a declaration amendment splitting Unit 2 into individual apartments and stating that the construction work had been completed.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It Image

Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?

Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

The DOJ's Corporate Enforcement Policy: One Year Later Image

The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.

A Lawyer's System for Active Reading Image

Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.

Protecting Innovation in the Cyber World from Patent Trolls Image

With trillions of dollars to keep watch over, the last thing we need is the distraction of costly litigation brought on by patent assertion entities (PAEs or "patent trolls"), companies that don't make any products but instead seek royalties by asserting their patents against those who do make products.