COOP BOARD APPLICATION – 10 DAY RULE
This action was commenced by plaintiff-sellers to recover a downpayment on the sale of a cooperative apartment held in escrow by the defendant-buyer’s attorney. The question of law raised in this case was whether the contract provision requiring the prospective purchasers to submit their application for board approval within 10 days of the contract execution was untenable. This issue was decided in favor of the plaintiff-sellers, the plain terms of the contract required a timely submission of the board package regardless of whether defendants had previously obtained a commitment letter or gain access to the cooperative’s documents. The fact that the contract did not make time of the essence is irrelevant in this instance. The purchasers failure to submit the board package within the allotted 10 days was a breach of contract entitling the sellers to the liquidated damages stipulated in the contract in circumstances where a breach occurred. Also constituting a material breach was the prospective purchasers’ misrepresentation of their bankruptcy status.
Glanzer v. Altman , 267 A.D.2d 79, 699 N.Y.S.2d 386 (1st Dept. 1999)
Note : Many attorneys and prospective purchasers fail to heed the 10-day application requirement to the coop corporation found in the printed form of the contract of sale. The newer version of the Blumberg form includes a provision requiring the prospective purchaser to make application to the coop board within 10 days of receipt of a loan commitment as opposed to 10 days from the date of contract. This case makes clear the position that the failure to abide by the 10-day contract provision could result in the loss of the deposit on the part of the prospective purchaser.
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