CONTRACT OF SALE FOR CONDOMINIUM UNIT NEAR "GROUND ZERO" DECLARED CANCELED
As a result of the devastation of September 11, 2001, many real estate contracts were challenged by prospective purchasers who took the position that the properties were no longer marketable as a result of the national disaster. In this action, the prospective purchaser (plaintiff) sought a judgment to declare the contract of sale for a condominium unit canceled and to return their $33,500 downpayment under the contract.
On June 27, 2001, plaintiff and defendant sellers entered into a contract of sale in which the plaintiff was to purchase the defendant's condominium apartment at 250 South End Avenue, New York City. Pursuant to the terms of the contract, the purchaser was to receive title to the air-conditioners and certain other personal property in defendant's apartment. The original date of closing of title under the contract was August 30 or 31, 2001 and the closing was adjourned on the consent of both parties to September 12, 2001.
After the devastation of the September 11th attack, the subject building was very near ground zero where the World Trade Center had stood. Access to the business was restricted until September 24, 2001. Dust and debris were in the courtyard of the building and dust and soot one inch thick were inside the subject apartment. The sellers alleged that the apartment was cleaned and ready for occupancy in early October 2001. The plaintiff submitted photographs as of November 12, 2001 that showed large piles of soot on the window sills and alleged contamination on the façade of the building.
Pursuant to paragraph 20(a) of the contract of sale, the seller assumed the risk of loss or damage to the apartment or personal property included in the sale caused by any casualty and had no obligation to make repairs or replace any loss or damage unless she elected to do so. If loss or damage occurred, the seller had to notify plaintiff buyer by the earlier of the date of the closing or the 10th day after the day of the loss or damage of (1) such loss or damage, (2) whether she elected to repair or restore the apartment and (3) what would be the further adjourned date of the closing. Under the contract, all notices had to be in writing and sent by registered or certified mail, return receipt requested or delivered in person or by overnight courier.
It was undisputed that no such timely notice was given by the seller to the buyer. Plaintiff admitted that he knew of the destruction of the World Trade Center but complains that he did not know of the extent of the damage to the subject apartment and had no idea what the defendant intended to do in relation to the apartment. Although the plaintiff's attorney forwarded correspondence to the seller's attorney on September 26, 2001 requesting to have the contract of sale canceled and his downpayment refunded, the seller's attorney rejected this request and in an October 22, 2001 letter to the buyer's attorney demanded that the closing take place. The seller's letter did not give the notice required as to a new closing date and did not directly address the damage to the subject apartment. The contract of sale clearly provided that the seller had an obligation to give notice to the buyer of the seller's intentions regarding restoration of the apartment and its personal property. The buyer was entitled to such notice so that he could make appropriate arrangements. The Court held that even if it was difficult under the circumstances at the time for the seller to give notice to plaintiff, performance by the date of the closing or at least within ten days of the date of damage or loss was not impossible. As a result, due to the seller's failure to comply with the material provision of the contract of sale and the ensuing prejudice to the buyer, the Court awarded summary judgment to the buyer declaring the contract of sale canceled and ordered that the downpayment be returned to the buyer.
Siegel v. Luk, New York County, Supreme Court
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